Keeping Tech Talent Happy

You could say MagMag in Kyoto (see "Meru Maga Mania") is indulgent with its employees. "We have 30 Internet and 3 beer servers in our office," says CEO Koichi Okawa. "You can drink fresh draft beer anytime you like." As an anonymous source observed in this magazine's July issue, MagMag has a "frat house" atmosphere. And when employees get temporarily burned-out with their email magazine distribution business, they retreat to the company relaxation room, where capsule hotel-style beds await those wanting to completely shutdown.

A Sega Dreamcast and Sony PlayStation complete the scene.

When it comes time to showing appreciation to their customers, the real fun begins. During the holiday season, led by their Santa-dressed CEO, the office brings Christmas cheer directly to the home of a customer. "We pick a customer with small children to visit and make a company excursion out of it. We have a great time with the trip, but sometimes I scare the kids in my costume," says Okawa.

The wa tradition tends to fade into the background at many newer technology companies. For fledgling startups, providing the refreshing opportunity to work in a casual, open-minded, and challenging environment is as much a perk as anything.

For J-Surplus.com, a surplus inventory auction site, the promise of the Japanese market and the lure of Tokyo is all that is needed to attract attention from potential employees. "We definitely go out whenever we can. Everything is so much better at a startup when you have a clubhouse atmosphere," says CEO Patrick Toolis.

Toolis offers permanent employees the usual startup package of flexible hours, casual wear, and an equity position. He observes that while the Japanese are enthusiastically taking to these benefits, old habits prove hard to break. "They still show up sometimes in a suit, ask me for permission to go to lunch, or request a detailed work schedule. I tell them, as long as you get the work done, I don't care."

Recruiters are helping tech companies sell the concept of New Economy benefits to the Japanese workforce. "A faster-moving, less bureaucratic workplace is a big attraction," says Ron Poe, manager at Access Technology, a firm offering executive recruiting for Bit Valley and Japan's tech industry. "Sometimes it's something as simple as being able to wear casual clothes. And it's a huge, new benefit here to be able to lead a project or influence the direction of the company at a much younger age than would be possible in a traditional company. Also, for Japanese women, the chance to have the same opportunities as men and be respected within a company is especially attractive." Springing themselves from the traditional captive environment, from "belonging to" their company to a world where they're recognized by ability, is an exhilarating feeling for those brave enough to do it.

For three thirtysomething Japanese women, escaping the confines of traditional media was the impetus for change. Each had been working at a fashion magazine, and each had grown disenchanted with their publication's conservatism. They launched Cafeglobe.com, a women's news site, after setting out to start their own online magazine and community. "We were fed up with the conservative atmosphere of our magazines and felt the news there was out of tune with women. We wanted to create fresh, new content," says editor in chief Yoko Aoki. It wasn't long before Cafeglobe.com received venture capital and the three women were baptized as entrepreneurs.

Their workplace, located in Tokyo's fashionable Omotesando neighborhood, is as fresh as the content they produce. The patio overhangs the renowned boutiques and cafes of the famous Minamiaoyama Street. And when it comes to startup cuisine, they defy all the sub-nutritional stereotypes of the industry with their healthy fare. "We often sit down at the end of the day and have a meal together in our kitchen. We'll cook all kinds of healthy things," says Aoki.

This blurring of work and pleasure is a key to Japan's tech startup scene, and it contrasts sharply with the traditional salaryman routine, which tends to separate work and pleasure. To see that routine in action, merely wander into Tokyo's Ginza district on any weeknight evening and sit down at an izakaya (small tavern). You'll see drained-looking salarymen, uniformly clad in starchy suits, transform themselves with the slightest hint of alcohol into animated, happy-go-lucky individuals. Some of those blessed with large expense accounts will, to further pursue that all-important feeling of wa, proceed with their coworkers and clients into the sensual world of hostess bars and ryotei (see The J-Files).

Since the economic bubble burst 10 years ago, though, huge expense accounts have become much less common. But perhaps there's a deeper reason this benefit has lost some appeal: Japan's emerging entrepreneurs are simply too busy forging a New Economy to waste time and capital on expensive, albeit grand, traditions.

The izakaya custom seems worlds away, for example, from Digital Garage, a mature startup at five years. "Not many people are into the izakaya scene, even our clients," says Cyrus Shaoul, head of strategic research and development. "There really is no need for that kind of wining and dining in the Net industry."

The company, organized horizontally, has an array of decidedly nontraditional benefits. The attire is tech casual, flexible hours allow workers to avoid the sardine can -- like rush hour of Tokyo's subways, and there's a beer vending machine in the hallway next to the drink machine. And Digital Garage has clued in to the fact that music inspires creativity: there's not only music in the office, but a database-driven Web stereo system that employees can control via their browsers.

Casual attire and beer are cool, but how about getting naked with your coworkers? Can you imagine a more intimate, spirit-building activity? True, it'd be a lawsuit magnet in Western countries, but trips to onsen (hot spring) resorts have long been a job benefit throughout Japan. B.U.G Softhouse in Sapporo chooses to blend such traditional perks with more creative and modern amenities, making for a rather unique work atmosphere.

The isolated city of Sapporo, located on Japan's northernmost island Hokkaido and closer to Russian soil than to Tokyo, does not spring to mind when thinking of geek heavens, and for many Tokyoites relocating there would be akin to exile to Siberia. But at B.U.G. nobody is complaining, and, more important, nobody is leaving. Their office is located in Sapporo Techno Park, a modern complex that houses over 50 other technology companies.

Situated in a beautiful mountainous environment full of rivers and forests, Sapporo is actually Japan's fifth-largest city. And thanks to Hokkaido University, a renowned technical school, B.U.G rarely has to look further than its own backyard for technical talent: 70 percent of its engineers are Hokkaido U. grads.

Adding an eclectic mix of perks makes for retention magic. "We offer employees the opportunity to pursue a number of leisure interests, such as tennis, ikebana (Japanese flower arranging), and aerobics at the office," says Ninako Mori in corporate communications. "They can also use a company lodge, get free ski tickets, enjoy discounts at a French restaurant, join a sports club, and use company holiday vehicles." Understandably, B.U.G enjoys an extremely low turnover rate for the software industry.

Will the more traditional Japanese companies adopt the fresh benefits that only tech ventures seem to be employing at the moment? Many of the benefits described in this article would border on sacrilege if practiced at larger Japanese corporations, where the sanctity of the office and work hours can be almost religious and individual release at work is somewhat akin to belching loudly at a Sunday sermon.

But the old Japan may have no choice but to go with the times. Studies show that established firms are finding it increasingly difficult to attract top talent, which is lured by the kind of benefits -- stock options, beer on tap -- that startups offer. The days of the drab salaryman may be numbered. Unfortunately, startups typically demand more work, not less, and that's where the rigidities of old Japan quickly become cumbersome. When work digs into personal life, personal life makes demands of worklife, which is when the lifestyle benefits described above start to attract key workers.

Japan may be seeing the emergence of a new kind of wa -- harmony between not just the individual and the group, but between life and work as well.