Japan’s rural industries are grappling with a severe labor shortage, especially in isolated regions where depopulation and aging are accelerating. But on a small island in the Seto Inland Sea, one shipbuilding company is swinging for the fences with an innovative approach: using the power of team sports to revitalize its workforce and community. Iwaki Tech: A Shipbuilder’s Bold Play Iwaki Tech, headquartered on Iwagi Island in Kamijima, Ehime Prefecture, has long been a pillar of the local economy. The company specializes in manufacturing steel blocks for ship hulls and boasts the nation’s top share in hatch covers for cargo ships. Despite stable business performance, Iwaki Tech has struggled for years to attract young talent, a challenge exacerbated by Japan’s demographic headwinds and the island’s remote location. Over the decade leading up to 2020, the company managed to hire only one new graduate every two years. To address this, Iwaki Tech formed a dedicated recruitment team in 2021, resulting in a modest uptick in hires. However, most new recruits preferred working at the company’s factories on the mainland, accessible by road, rather than the main plant on Iwagi Island, which requires a ferry ride—a logistical hurdle that often deters young workers. A Game-Changing Idea: The Birth of a Baseball Team The breakthrough came in February 2024 at a casual gathering, when a local suggested that forming a baseball team could attract young people eager to continue playing the sport after high school or college. With ample sports facilities on Iwagi and neighboring Ikina Island, the idea quickly gained traction. Within months, enough interest was generated to form a team, and by October, the Iwaki Tech Baseball Club was officially launched. The team now fields 18 players aged 18 to 30, including six new hires set to join the company in April. Their rallying cry, “From the island to the national stage,” reflects both their sporting ambitions and the company’s hope to draw national attention to Kamijima. Beyond Recruitment: Revitalizing the Island Community The impact of the baseball club extends far beyond the company gates. Practices resound with youthful energy, a rare commodity on an island with a population of just 6,000. Players, some of whom have relocated from urban areas, note the superior training environment and the warm integration into local life—participating in festivals and receiving encouragement from residents.  Company leaders see the club as a dual opportunity: to develop employees both on the field and in the shipyard, and to showcase the unique lifestyle and career opportunities available on the island. As General Manager Daijiro Yamamoto puts it, “We hope they’ll discover the joy of island life and shipbuilding, and stay with us for the long term”. A New Era for Ehime Baseball and Regional Revitalization With Iwaki Tech’s entry, Ehime Prefecture now boasts two corporate baseball teams, rekindling local enthusiasm for the sport and providing healthy competition for the established Matsuyama Phoenix club. Industry leaders and local officials alike hope that this rivalry will not only elevate the level of play but also help attract more young people to the region, supporting both sports and economic revitalization. Key Takeaways for Regional Employers Innovative Recruitment: Leveraging sports and other extracurricular activities can make remote workplaces more attractive to younger generations. Community Engagement: Integrating new employees into local life fosters a sense of belonging and mutual support. Dual Development: Programs that combine professional and personal growth help retain talent and build organizational loyalty. Conclusion Iwaki Tech’s bold experiment demonstrates that tackling Japan’s rural labor shortage requires creativity, community spirit, and a willingness to try new approaches. By turning to baseball, the company is not just building a team—it’s building a future for the island and its industry. Author: Yan Sen Lu, Managing Director - Makana Partners Source: https://mainichi.jp/articles/20250308/k00/00m/050/ 078000c

We are excited to welcome you to the third issue of Makana 2.0 —our flagship e-magazine that brings together thought leaders from across industries to share valuable insights on HR, leadership, and technology, with a special focus on Japan and Asia. As we move from the quiet of winter into the vibrant bloom of spring, the cherry blossoms remind us of renewal and growth—values that continue to guide our mission. With each issue, we aim to bring you fresh, forward-thinking insights to help you thrive in today’s fast-changing business landscape. In this edition, we’re proud to feature: Francis Fung , who explores how underrepresented groups—especially orphans—can help address Japan’s pressing labor shortage while advancing ESG goals. Linkedin Hiroyuki Nagashima , CEO of ToiToi, on the power of relationships in shaping corporate culture. Linkedin Naotake Momiyama on the top three value-added contributions of an HR business partner. Linkedin And a special piece from Yan Sen Lu , sharing key considerations when hiring leadership talent in Japan. Linkedin These stories are meant to spark ideas, challenge assumptions, and support your journey as a business leader navigating Asia’s unique challenges and opportunities. As always, we welcome your feedback—it helps us make each issue better. And if you have ideas or stories you’d like to contribute, we’d love to hear from you. Thank you for being an integral part of the Makana community. Link to article: Makana 2.0 - Issu e 3 Stay informed. Stay inspired. Stay ahead.

When considering a senior leadership hire for a multinational corporation (MNC) operating in Japan, the evaluation criteria must go beyond conventional metrics such as English proficiency, business acumen, technical expertise, or even leadership skills like P&L management. While these qualities are undeniably important, the most critical attribute lies in the ability to bridge cultural divides—translating Japanese corporate culture and consumer trends to global headquarters, while simultaneously adapting Western management principles to resonate with a Japanese workforce. Understanding Japanese Corporate Culture Japanese corporate culture is deeply rooted in traditional values such as harmony (wa), hierarchy, and group cohesion. These principles stem from the country’s major religious practices—Shintoism and Buddhism—which have profoundly shaped societal behaviors and workplace dynamics. Shintoism emphasizes harmony with nature and reverence for spiritual entities (kami), fostering rituals that celebrate purity and interconnectedness. This cultural foundation translates into workplace practices that prioritize collective well-being and respect for nature. Buddhism, particularly Zen, emphasizes mindfulness, simplicity, and dedication. Its influence is evident in Japan's meticulous work ethic and the pursuit of perfection in craftsmanship (monozukuri). These values manifest in corporate environments through practices like lifetime employment, consensus-driven decision-making (e.g., nemawashi), and risk aversion. Employees often prioritize loyalty to their organization over individual ambition, reflecting a collectivist mindset. Challenges for MNCs in Japan Western management principles—such as individualism, direct communication, innovation, and flat hierarchies—often conflict with Japanese tendencies toward group harmony, hierarchical respect, and long-term stability. For example: Decision-making in Japan is consensus-driven and deliberate, contrasting sharply with the results-oriented urgency of Western businesses. Japanese employees value loyalty and collaboration over competition or personal recognition, which can clash with performance-based incentives common in Western firms. When MNCs attempt to impose Western-centric cultures in Japan without adaptation, they risk alienating both their workforce and their customer base. The Role of Leadership: Bridging Cultures The savviest senior leaders are those who can integrate the best aspects of both cultural philosophies. They act as cultural translators—bridging gaps between Japanese traditions and global business objectives. This requires:  Cultural Sensitivity: Understanding the nuances of Japanese corporate values like harmony (wa), loyalty, and meticulous attention to detail. Adaptability: Tailoring Western management principles to align with Japanese expectations without compromising organizational goals. Strategic Communication: Translating global HQ’s vision, mission, and targets into culturally resonant messages for Japanese teams. Relationship Building: Cultivating trust among Japanese employees while maintaining alignment with international stakeholders. In conclusion, the most successful senior leaders in Japan are not merely fluent in English or adept at managing P&L; they are cultural integrators who harmonize divergent philosophies into a cohesive strategy. By blending the collectivist ethos of Japanese corporate culture with the innovative drive of Western management principles, these leaders create organizations that are not only competitive but also deeply attuned to local market dynamics. In an increasingly globalized world, this ability to bridge cultures isn’t just desirable—it’s essential for sustainable success.

It feels like AI should give us more free time, right? But instead, many of us feel busier than ever. Why is that? It's not just one thing, but a bunch of changes in how we work and how we think about work, especially as we're still figuring out how to use AI. We Expect More, So We Do More Sure, AI can make us more productive. Studies show people can get about 66% more done with AI. But here's the catch: companies see that and expect more. If you used to handle ten tasks, now they want you to do seventeen, thinking AI will make it easy. So, you're getting more done, but you're not getting any time back. You're just filling those saved hours with even more work. Think of it like a productivity trap. One legal consultant even found himself on a whirlwind of international flights and speaking engagements because of AI-driven demand. Setting Up AI Takes Time and Effort AI isn't a magic button. It takes work to get it running smoothly. You have to: Train it: People spend a lot of time teaching AI systems what to do. Change how you work: You need to redesign your workflows to fit AI, which can take months, even over a year. Check its work: You can't just trust AI blindly. You have to edit, fact-check, and make sure it's doing a good job. Basically, you end up doing your old job and your new AI-related job for a while, which adds to the feeling of being overwhelmed. Too Many Choices, Too Much Pressure AI gives you tons of data and insights, way more than you're used to. This can lead to: Decision paralysis: You get so much information that you don't know what to do. Constant pressure to improve: AI shows you how to optimize everything, so "good enough" isn't good enough anymore. The need to constantly learn: You have to keep up with the latest AI tools and skills. Imagine going from setting monthly marketing campaigns to having to tweak them daily based on real-time data. It's exhausting. We're Not Delegating Properly We often use AI to do more tasks, not to take tasks off our plate. We're "AI babysitting" instead of letting it do its job. We spend a lot of time tweaking prompts and double-checking its work, which just creates more work for us. To use it right, we should be offloading entire tasks, having AI do most of the work and we just polish it, or letting AI run independently with oversight. Work Never Stops AI makes it easier to work 24/7. With things like instant translation and automated follow-ups, work can bleed into your personal time. People are finding themselves doing more little work tasks after hours than ever before. Everything Is Visible Now AI tools can track everything you do, making previously hidden workloads very obvious. Now, companies can see every inefficient meeting and email response gap. This leads to people feeling like they have to fill every minute of their workday to look productive, even if it's not actually productive. Finding a Balance AI can save us time, but we need to change how we use it. We need to: Rethink our work expectations. Create boundaries and AI-free zones. Use AI to focus on important things, not just to do more stuff. The key is to use AI to work differently, not just to work more.

The senior HR executive market in Tokyo is experiencing significant transformation driven by demographic shifts, technological advancements, and evolving corporate priorities. While Japanese companies continue to adapt their human capital strategies to compete globally, they face unique challenges in attracting and retaining top HR leadership talent. This analysis examines the current state of the HR executive landscape in Tokyo, with particular emphasis on multinational corporations, revealing a complex interplay of factors shaping this specialized segment of the labor market. The research highlights a significant talent shortage at the executive level, substantial compensation disparities between Japanese and Western companies, and growing emphasis on digital transformation capabilities within HR leadership roles. Market Dynamics for Top-Tier HR Talent in Tokyo The executive search market in Japan, including for senior HR positions, remains in a relatively immature state compared to other global markets, having existed for a significantly shorter period than in regions like North America and Europe. This market immaturity creates unique challenges for companies seeking to fill leadership positions in Tokyo's competitive business environment. A critical issue facing organizations is an unprecedented shortage of executive and leadership talent, particularly in specialized functions like human resources, which stems largely from inadequate succession planning practices within Japanese corporations. This talent gap has been exacerbated by the COVID-19 pandemic, which created numerous leadership vacancies as companies were forced to manage Japanese operations remotely from overseas headquarters. The broader demographic challenges facing Japan are directly impacting the HR executive market. Japan is gradually transforming into what experts describe as a "limited labor-supply society," with demographic statistics projecting a continuous growth in the elderly population until 2044, while simultaneously experiencing a rapid decline in the working-age population until 2040. This demographic shift creates a structural and chronic shortage of labor that extends to the executive level across all functions, including human resources. The situation requires HR leaders with sophisticated strategies for talent management in an increasingly constrained labor market, making such professionals even more valuable and harder to secure. Human Resource officers in Japan are actively grappling with the challenge of adapting their hiring strategies to remain competitive in the face of growing pressure from global competitors. Chief Human Resources Officers (CHROs) from major Japanese firms such as Fujitsu, Panasonic, Marubeni, KDDI and OMRON have openly acknowledged the importance of investing in their people while simultaneously recognizing the significant difficulties in implementing effective human capital strategies. This consensus among industry leaders underscores the complex market dynamics for HR talent in Tokyo, where demand for strategic HR leadership continues to grow while the supply of qualified candidates remains constrained. HR Leadership Dynamics Across Different Industries The technology sector in Japan demonstrates a particularly diverse and specialized approach to HR roles, as evidenced by Rakuten's extensive HR department structure. Within this major e-commerce and technology company, HR positions span specialized functions including talent acquisition, employee relations, organizational optimization, HRIS (Human Resource Information Systems) management, and dedicated training and development roles. This sophisticated segmentation reflects the tech industry's need for HR leadership that can support rapid innovation while managing the unique challenges of attracting and retaining technical talent in a competitive market. The presence of specialized roles such as "Business Skills Trainer and Consultant" and "Talent Management Specialist" indicates the strategic importance tech companies place on developing human capital as a competitive advantage. In contrast, traditional manufacturing and telecommunications sectors in Japan appear to be placing increased emphasis on transformational HR leadership. Companies like Fujitsu, Panasonic, and KDDI are actively seeking HR executives who can drive cultural change while balancing traditional Japanese business practices with global best practices. These industry leaders recognize that maintaining competitiveness requires fundamental changes to their people strategies, particularly as they expand their global operations. The manufacturing sector faces additional HR challenges related to automation and aging workforces, requiring HR leadership with change management expertise and strategic workforce planning capabilities. Multinational companies operating in Japan represent a distinct segment within the market, with 80-90% of executive search clients being foreign capital companies headquartered outside of Japan. These organizations typically require HR leaders who can successfully navigate the intersection of Japanese business culture and international corporate practices. English language proficiency is consistently described as a necessity for these roles, while Japanese language skills represent a significant advantage but are not always mandatory. This creates a rather narrow candidate pool of bicultural, bilingual HR professionals who understand both Japanese employment practices and global HR standards. Recent Trends in HR Leadership Roles at Multinational Companies Digital transformation has emerged as a central focus for HR leadership roles in Japan, with companies increasingly seeking HR executives who can leverage technology to enhance workforce productivity and strategic capabilities. Tokyo Century, for example, has positioned digital transformation as a cornerstone of strengthening its management base and driving innovation in its corporate culture and business model. The company established a dedicated DX Strategy Division in December 2020 and has been advancing initiatives that include harnessing digital technology to enhance corporate value and bolster competitiveness. This trend requires HR leaders with technological fluency and change management expertise who can drive digital adoption throughout the organization. The COVID-19 pandemic has fundamentally altered leadership dynamics in multinational companies operating in Japan. Many leadership positions remained vacant locally during the pandemic, with companies forced to manage their Japanese teams remotely from overseas headquarters. In some extreme cases, expatriate executives on typical three-year rotational assignments never physically relocated to Japan during their entire tenure 1 . While these restrictions have eased with the loosening of pandemic-related travel constraints, they have accelerated the adoption of remote and hybrid work models, requiring HR leaders to develop new approaches to talent management, engagement, and organizational culture in distributed work environments. Human capital management has become a strategic priority for HR leaders in Japan, with CHROs from major Japanese firms actively discussing how to evolve their people strategies to remain competitive. This represents a shift from traditional Japanese HR practices focused primarily on administrative functions toward more strategic approaches that view human capital as a critical driver of organizational performance. The growing emphasis on human capital management requires HR executives with strong business acumen who can align workforce strategies with broader corporate objectives and demonstrate the ROI of people-related investments to senior leadership. Competitiveness and Retention Challenges in the HR Executive Market The scarcity of qualified HR leadership talent in Tokyo has created a highly competitive environment where strong candidates frequently receive competing offers. While specific counteroffers data isn't provided in the search results, the documented "unprecedented lack of executive and leadership level talent" strongly suggests that companies must be prepared for bidding wars when pursuing top HR candidates 1 . Organizations that fail to move quickly in the hiring process or that present uncompetitive offers risk losing candidates to more agile competitors, particularly multinational corporations with greater compensation flexibility. The combination of demographic pressures and increasing demand for specialized HR expertise creates a sellers' market for experienced HR executives with international exposure. This market dynamic places additional pressure on companies to develop comprehensive retention strategies for their HR leadership talent. While not specific to HR roles, we can observe that Japanese companies are increasingly recognizing that their traditional compensation approaches may be insufficient for retaining top talent. The movement toward more aggressive incentive structures among leading Japanese firms suggests an evolving approach to executive retention that places greater emphasis on performance-based rewards. Companies are counteracting talent bottlenecks through various approaches, including repatriating Japanese talent from overseas to fill leadership roles. This strategy leverages professionals who have gained international experience while maintaining cultural ties to Japan, creating a valuable talent pool for HR leadership positions that require both global perspective and local knowledge. The success of repatriation efforts depends significantly on companies' ability to provide compelling value propositions that address both professional aspirations and personal considerations, as these candidates often have multiple options in global markets. Challenges in Sourcing Exceptional HR Talent for Leadership Positions The fundamental challenge in sourcing exceptional HR talent for leadership positions in Tokyo stems from Japan's demographic realities. With the working-age population declining rapidly until 2040, the overall pool of available talent is shrinking, creating competitive pressure across all executive functions. This demographic constraint is particularly acute for specialized roles like HR leadership, where candidates must possess both technical expertise and strategic business capabilities. Companies must develop increasingly sophisticated talent strategies to identify and attract qualified candidates in this constrained market. Language barriers and cultural differences represent significant obstacles in the HR executive search process. For multinational companies, English language proficiency is typically a non-negotiable requirement, while Japanese language skills are highly valued but not always mandatory. This bilingual requirement substantially narrows the candidate pool, particularly for positions requiring both languages at business proficiency levels. Cultural fit presents an additional challenge, as HR leaders must effectively bridge Japanese business practices with global corporate expectations, requiring nuanced understanding of both contexts and the ability to navigate potential conflicts between them. The executive search practice in Japan remains relatively underdeveloped compared to other markets globally, creating additional sourcing challenges 1 . Many international search firms have attempted to enter the Japanese market but have struggled to adapt their approaches to the unique talent landscape of Japan. These firms have often overpromised results without fully understanding the local context, leading to disappointing outcomes for clients. This situation highlights the importance of working with search partners who possess deep knowledge of the Japanese HR executive market and maintain extensive networks within this specialized community. Salary Ranges and Compensation Structures for Senior HR Positions Senior HR executives in Tokyo, including roles such as Chief Human Resources Officers (CHROs), HR Directors, and Talent Management Heads, experience compensation trends that mirror Japan’s executive pay landscape while reflecting the strategic value of HR leadership. Although granular data for HR-specific roles is limited, benchmarks from senior management provide insight. Base salaries for HR leaders in Tokyo typically range between ¥13,000,000 to ¥14,500,000 annually, with top performers in transformative or global HR roles earning ¥15,000,000 to ¥16,500,000. Total compensation often includes HR-specific incentives tied to talent outcomes, such as retention rates, succession planning success, or diversity metrics, alongside traditional benefits like housing allowances or retirement contributions. Japanese vs. Western HR Compensation Practices A notable gap persists between Japanese firms and Western multinationals (MNCs) in structuring HR executive pay. Japanese companies historically prioritize fixed salaries, with bonuses averaging 20–30% of base pay for HR roles, compared to Western MNCs, where performance-linked incentives (e.g., achieving workforce scalability goals or digital transformation milestones) may constitute 40–60% of total compensation. Long-term incentives (LTIs) like stock options or deferred bonuses, common in Western HR packages, remain underutilized in domestic firms but are gaining traction for roles requiring global expertise.