Asking for a Pay Raise in a Japanese Company

Asking for a Pay Raise in a Japanese Company

One reason people like to work for a Japanese company is knowing that your working life and environment are "looked after". If you're someone who craves security and stability, then the paternalism and lock-step nature of your remuneration and benefits are not a bad thing. But if you want something out of the ordinary, then you're in for a rude shock - especially if you want a pay raise.

The first thing to remember about most Japanese companies is that they operate on the principle of predictability. Translated into the job sector, this means that they usually hire people from a trusted source - typically new graduates, from a set of known universities - and they expect their staff to know little or nothing about the business. Thus the expectation is that for the first 3-5 years, people will need training and "conditioning" about the company, its processes, clients, the technology/systems, etc. And that's why starting salaries are low - the investment needed has to be paid for somehow.

Japanese companies almost always have a salary table that applies to all "standard" hires (versus a mid-career hire or foreigner hire), one which applies from the day you start fresh out of school through until the day you retire. The table almost uniformly starts with a salary of JPY 180,000 or so for new graduates, through to about JPY 15-20m for bucho class people and company directors. So uniform is the system, that I can give these generalized figures and be right for about 90% of companies - big or small.

Steps in the table are typically either just on seniority and title, or more recently it also factors in skills and performance. Each anniversary of your joining the company (or at a predetermined date in the year), you will move up a step on the table, gaining an additional 1-3% pay. If you've done well performance wise, then you can jump 1 or more steps on the table and/or get put into a new bracket reserved for managers (which of course pays more). Getting bumped up more than one grade is an exception rather than the rule, and generally isn't negotiable, unless you want a reputation as a troublemaker.

As a mid-career hire or foreigners, your best and sometimes last chance to negotiate for your salary is before you get your job. Although you may really want the position, you should always gauge just how bad the company actually wants you. If you're a foreigner, you must already have a need that they have expressed, else you'd probably be getting an offer even lower than that of a new graduated Japanese hire. The best way to do this negotiation and avoid being seen as trouble, is to use a professional recruiter. Since these people get a share of your first year's salary, they are expected to go in to bat for you, and clients understand that.

But once you're in the firm, negotiating a pay raise is a dangerous exercise. Yes, it can be done, especially if the company is smaller, really needs you, and you are working directly with the CEO. Needless to say, trying to negotiate a pay raise with the HR or General Administration department is basically a waste of time. They have a whole company to worry about and as soon as you make a peep, you will be labeled as a problem employee.

So what's the option if you want more money? The easiest thing is to either start working a lot of overtime, getting tacit approval from your seniors to charge it. It might just be easier to move jobs, and negotiate the salary you want, right from the start. This strategy is quite common in smaller companies and leaves you wondering how many of these firms lose talented people simply because the discussion of salary is seen as being taboo.

While getting more pay is very difficult, Japanese companies are a soft touch if you have a personal emergency - which as I said at the beginning of this article, is a good reason that a lot of people are happy to work for one. In having an emergency, it has to be something of a medical nature concerning any member of your family, or something that involves your being the victim (of a scam, a law suit, a divorce, etc.). At times like these, Japanese companies pride themselves on mobilizing resources and money to help out. You can expect to loan up to 1-2 months salary at a rate of about 3-5% interest.