VOTING WITH THEIR FEET
- Morgan and Banks comes to Tokyo
by Daniel Scuka

Conventional wisdom has it that Japan's economy is fading fast. Although the government's first-quarter GDP results showed a growth of some 1.2 percent - partly due to massive government spending - pundits point out that as soon as the money well runs dry, the economy will resume its plunge. But is this actually the case? In August, Nikkei reported that the total number of cellular and PHS phone subscribers had exceeded 50 million, and in July, Yahoo! Japan announced an eight-fold increase in annual advertising revenues, to JPY 260 million. Clearly, some players have a lot of confidence in Japan's economy, and Morgan & Banks - the global Hong Kong-based recruiting agency - is one of them.

Why Tokyo; why now?
For any company wanting to break into the Asian market, Japan has always been considered a strategic point. With its population of 124 million and the world's second largest GNP, new businesses are clear about the potential goldmine Japan presents.

Morgan & Banks arrived in Tokyo half a year ago on a recruitment project for one of their clients. When the project was completed, the company decided that they were here to stay. Their aim both then and now has been not only to assist existing clients with HR needs in Japan and help Japanese businesses to develop with the changing global market, but - quite simply - to become the international HR leader in the Asia Pacific region.

The company was initially created in Sydney, Australia, in 1985 by Geoff Morgan and Andrew Banks. Since then, the firm has experienced an annual growth rate of some 40 percent, and now provides a range of human resource solutions to (predominantly) multinational clients across industries, disciplines, and countries. The Morgan & Banks group has over 1200 employees in the Asia Pacific region with offices throughout Australia, New Zealand, Hong Kong, The People's Republic of China, Singapore, and Japan. In early 1995, through their acquisition of The Wright Company - a locally owned recruitment business with expertise in advertising and communications recruitment - Morgan & Banks entered the Asian market. In January 1999, Morgan & Banks was acquired by TMP Worldwide, the largest advertising recruitment agency, offering services through Monster.com. "The Japanese economy is certainly not where it was years back," says Angelena Wang, representative and senior recruiter of the Morgan & Banks Japan Office. "Still, we have the confidence that this is the right moment for us to be in Japan. From a corporate standpoint, Japan offers tremendous growth potential for Morgan & Banks' basic business model of providing a total solution, from recruiting, to outplacing, compensation studies, training and development."

Moving with the times
Many cite Japan's inability to function in international markets - particularly its lagging e-commerce development - as the key reason for its continuing economic doldrums. As the rest of the world took full command of the Internet, Japan continued to focus on sector products, such as textiles, petrochemicals, steel, cars, and electronics, and - in effect - completely overlooked the arrival of Net-based business. Now that large Japanese players are starting to recognize the need for a mobile and globalized work force, the old-style system has made it difficult for them to downsize quickly - adding to their deficit. Wang believes that the failure of Japan's lifetime employment system is deterring Japanese businesses from competing effectively in the global economy. "We studied and marveled at the art of Japanese management in the eighties, [however] in this decade, we are seeing some of these fundamentals breaking down amidst the changes engendered by technology. Hiring the right talent, developing and nurturing the appropriate talent, and lastly, rewarding at the right price - these will be areas of focus for businesses in Japan."

Morgan & Banks believes that it has just what Japanese businesses are looking for: intellectual capital. "As a company, we are continuously working on enhancing this intellectual capital value through our commitment to training, continuous learning, and improvement of our staff," says resourcer Joanne McMahon. "There is very little evidence of such commitment in most recruitment firms in Japan."

The firm puts each of their new hires through a mandatory "Fast Track to Consulting" training series (on top of a corporate induction and orientation program). The program consists of eight modules covering the key methodologies, quality standards, and systems, and it also includes case studies and workshops where the new hires are encouraged to communicate and share their experiences and ideas, challenge and question the modules, as well as brainstorm to find solutions. "One of our core capabilities is our system. This is a key point of differentiation between Morgan & Banks and other firms in Japan. The extent of our systematic processes - from back office support to the training of our people - are geared towards achieving the ISO 9000 certification. Some of the ISO 9002 procedures - like quality candidate reports, letters of acknowledgement to all applicants, standard placement follow-up calls, and reference checks before placements - are already in place. The Japan operation is aiming to be accredited within the next 12 months."

Staffing via the Web
The Internet - though still a largely untapped market in Japan - is also a rapidly increasing one. On August 27, Nikkei reported that summer sales of personal computers in Japan have turned out to be a record this year, with many companies selling twice as many units as in the same period last year. Web-based recruiting could also prove to be a potential catalyst for relighting Japan's stagnant economy. Morgan & Banks offers a highly sophisticated Internet-based recruitment service, working closely with Monster.com to enhance and develop Internet-based recruitment solutions.

With one of the largest talent databases as a source, Morgan & Banks heralds its ability to provide complete recruitment solutions to all its clients. "We are looking at prudential rather than exponential growth in the next 12-18 months," says Wang, and, "Our aim is to build a critical mass of business in Japan in the next 24 to 48 months."

With the computer now becoming more popular than the television set in terms of sales, many Japanese companies - unwilling to globalize or unable to change - may find themselves being swept under by the digital tide. However, as more international companies, like Morgan & Banks, offer their services and setup shop on these shores, Japan could yet find itself swimming side by side with the Big Fish.

Angelena Wang can be contacted at a.wang@morganbanks.co.jp.

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