5 Challenges of Working in Japanese Company
Japan can be an incredible place to work—structured, safe, and deeply respectful. But behind the order and harmony lie deep-rooted workplace challenges that can frustrate even the most patient professionals. Based on my experience as a former HR head and stories from countless employees, here are five major challenges that anyone considering a job in Japan should understand.
Summary
Job-Style vs. Membership-Style Hiring
Seniority-Based System Still Dominates
Low Job Mobility & Little Cross-Pollination
Corporate governance is still underway
Work-Life Balance: Still a Work in Progress
1. Job-based vs. Membership-Style Hiring
Unlike in the U.S. or other Western countries, where employees are hired for clearly defined roles (job-base hiring), Japan still largely relies on the "membership-style" employment model. You're hired to be part of the company, not for a specific position. You may be rotated across departments—sales, HR, operations—with the long-term goal of grooming you into a well-rounded leader.
Companies like Hitachi, Fujitsu, and KDDI have recently started to move toward job-based hiring, but the old structure remains strong. By your 40s, it’s often clear whether you’re on a leadership track—or not, which would impact engagement level.
New graduate hires often see themselves as "proper employees" (生え抜き). If you step off the ladder—switching companies—it’s nearly impossible to return to it. There’s also a lack of job descriptions, which makes it easy for responsibilities to grow unbounded and lead to burnout.
Actual Story: My American HR colleague Bill transitioned into a traditional/large Japanese manufacturing company as a senior recruiter. Membership-Style Hiring was new to him and the hiring process is different from job-based hiring. He struggled with the intense hierarchy and the "nemawashi" (pre-discussion) culture that guided decisions. While he brought international perspective, his ability to effect change was limited. Today, he works in change management at another traditional firm—still fighting the same uphill battle.
2. Seniority-Based System Still Dominates
Seniority continues to dictate pay, promotion, and prestige. It’s not uncommon for less capable senior employees to earn more than younger, high-performing staff. Promotions can take decades, regardless of output or potential.
Merit-based raises are rare, and salary negotiation is still a sensitive topic. This creates frustration for skilled workers—especially foreign hires who are accustomed to “pay for performance” philosophy. As for bonus, many companies already structure semi-annual bonus for 2-3 months of monthly salary, not merit base.
Even bonuses are typically structured as fixed, semi-annual payouts—often equivalent to 2–3 months’ salary—rather than being tied to individual performance.
While Japan’s lifetime employment model is slowly eroding, it still provides a psychological safety net. But that same safety can lead to stagnation and risk-avoidance.
Actual Story: “Windows 2000” — Not the Software
In Japan, “Windows 2000” doesn’t always mean Microsoft. It’s a tongue-in-cheek term used to describe senior employees at trading firms—who sit by the window with little to do, yet earn ¥20 million a year (~$150K) based on seniority, not performance.
This traces back to the 1980s when “madogiwa-zoku” (window-side tribe) emerged—referring to sidelined staff removed from key roles. Due to strict labor laws, companies often can’t dismiss underperformers, so they stay on with full pay.
For young, hardworking employees earning a fraction of that, “Windows 2000” is both satire—and frustration.
3. Low Job Mobility & Little Cross-Pollination
Switching companies in Japan is difficult—culturally and structurally. Skills are not easily transferable, and most firms resist hiring mid-career outsiders for key roles.
At the same time, Japanese labor laws make it nearly impossible to terminate underperformers, so many employees remain in roles they’ve outgrown.
Actual Story: At Netflix in the U.S., the company implemented bold HR strategies like unlimited PTO and expense policies based on trust. These types of disruptive ideas rarely emerge in Japan’s tightly regulated, static organizations.
4. Corporate governance is still underway
Corporate governance reforms (CGX) are underway, but many organizations still treat governance as external pressure—not an internal responsibility. This leads to risk-averse cultures where bold decisions are discouraged.
Power harassment (パワハラ) remains a major issue. Whether it’s public shaming, forced after-hours socializing, or exclusion, abuse of power often hides behind hierarchy. Legal changes are coming, but many junior employees and women still hesitate to speak up.
Actual story: The good news is that younger generations in Japan are increasingly aware of compliance and corporate governance. They’re less afraid to speak up about harassment or misconduct by senior colleagues—marking a cultural shift toward greater accountability.
5. Work-Life Balance: Still Evolving
Despite national campaigns promoting work-life balance, long hours are still common. While laws now cap overtime and require mandatory vacation, many workers feel guilty taking days off.
Presence still equals performance in many offices. While the pandemic pushed some companies toward flexible work, traditional values are still strong, especially in mid-size and older firms.
Final Thoughts
A friend once told me, “Japanese people make great soldiers”—meaning that when goals are clear and rules are in place, we excel. Traditional Japanese work culture has long emphasized stability and structure, often at the cost of risk-taking and innovation. Many employees grow cautious, fearing failure or standing out too much.
And yet, I’ve noticed a growing shift. More and more commercials, ads, and corporate slogans encourage boldness and challenge. Think of Nissan’s “やっちゃえ、NISSAN” (“Go for it, Nissan”), Meiji Yasuda’s “昨日までの自分を超えてゆけ” (“Go beyond who you were yesterday”), or Dentsu’s message:
“『その手があったか』と言われるアイデアがある。
『そこまでやるか』と言われる技術がある。
『そんなことまで』と言われる企業家精神がある。”
(“There are ideas that make people say, ‘I never thought of that.’
There’s technology that makes people say, ‘You’ve gone that far?’
There’s a spirit of entrepreneurship that makes people say, ‘Even that?’”)
Perhaps, deep down, we do admire innovation, creativity, and pushing boundaries—more than we openly admit. Japan may seem risk-averse on the surface, but the spirit of challenge is quietly gaining momentum.
Whether you’re a foreigner looking for opportunity or a local seeking a shift in perspective, knowing these realities is key to thriving—not just surviving—in Japan’s corporate world.