Electronics firms breaking away from traditional hiring practices

Leading electronics companies are bucking the long-held corporate practice of recruiting new graduates en masse, opting instead to hire and even poach more mid-career workers from rivals.

The companies say that securing experienced workers is more practical than training rookies from scratch.

But mid-career hiring could put these companies at risk of seeing their own talented resources lured away by the competition, industry insiders say.

EXPERIENCE COUNTS

In August, about 80 mid-career employees who joined Hitachi Ltd. that month attended a training session at an office building in Tokyo’s Ueno district.

They each wrote down what came to their mind when they heard the word “Hitachi” on Post-It notes and pasted them on a white board to exchange opinions.

They included “Shirokuma-kun,” a brand name for its air conditioners, and “Kashiwa Reysol,” a professional soccer team founded by the electronics giant.

The daylong session, introduced this business year, is held every month to help new employees fit in.

Split into groups of six to seven people, they sat at the same table to learn about working at the company and receive explanations about employee benefits and in-house systems.

“There is absolutely no disadvantage in not being a new graduate,” said a senior member of the human resources department.

Rina Naruge, 31, who attended the session, will be assigned to Hitachi’s public relations department based on the high evaluations of her previous work as a publicist.

“I was nervous because it is my first move to a different company, but I feel reassured after getting to know people under the same circumstances,” she said.

Hitachi planned to recruit 930 mid-career hires for the current business year, surpassing for the first time the figure of 815 for new graduates.

The company intends to continue hiring 1,000 mid-career workers a year.

“The increase in mid-career hires was due to our efforts to meet the demands of each workplace seeking work-ready employees,” said Kenichiro Okubo, acting chief of the Talent Acquisition Department who is in charge of mid-career recruiting. “We make plans based on opinions from front-line workers, instead of us determining the number of hires in a one-sided manner.”

BREAK FROM SELF-RELIANCE

NEC Corp. hammered out a plan for a 1:1 ratio of new graduates to mid-career hires in the business year starting in April 2021 as part of efforts to break away from the “self-reliance policy.”

The company released its three-year midterm business plan in 2016 but retracted it only a year later due to poor business performance.

The high percentage of employees who joined the firm as new graduates hampered the transformation of its business model.

NEC had employed about 400 new graduates and fewer than 100 mid-career hires annually until the business year starting in April 2018.

NEC tended to promote to managerial positions those who had been with the company since graduation. Therefore, there were few executive officers from outside the company.

As part of personnel system reform, NEC set up an in-house team in charge of recruiting mid-career hires in 2019 to attract consultants and engineers specializing in digitizing companies.

“It is extremely important in times of labor shortages to open doors equally for mid-career hires,” President Takayuki Morita said.

The company intends to employ 600 mid-career hires in the current business year.

“It is not our goal to hire workers as planned. What is important is whether we can secure human resources suitable for their jobs,” said Yasuko Ohashi, the team leader who works for the department in charge of human resources and organization development at NEC.

HIRING PAID INTERNS

Fujitsu Ltd. abolished its tradition of accepting university and other graduates this business year.

Instead, the company sets the number of positions required for each workplace and hires workers after they finish a paid internship program of up to six months.

It is aimed at preventing post-assignment mismatches between the workers’ career aspirations and the actual jobs available.

Previously, internships positions were limited in availability. But Fujitsu expanded the scope to cover all positions.

Salaries also vary depending on job content and responsibilities.

“We previously focused on the potential of new graduates when we employed them en masse, but we switched to hiring them on an individual basis after the company and students evaluate each other,” said Susumu Amano, head of the Employee Success Unit at Fujitsu.

Mitsubishi Electric Corp. has been recruiting about 1,000 new graduates and an equal number of mid-career hires annually since the business year starting in April 2022.

Mid-career hires accounted for 20 percent of all workers recruited by NEC, Hitachi, Fujitsu and Mitsubishi Electric until the mid-2010s.

The ratio rose to 50 percent in the business year starting in 2022.

HEADHUNTING RISKS

Large electronics companies in recent years have been shifting their focus from traditional manufacturing-oriented businesses to more profitable IT services and other operations.

“Electronics firms are drastically changing their businesses. I think they want to secure human resources appropriate for their businesses in a timely manner,” said Minoru Shimamoto, a professor at Hitotsubashi University’s Graduate School specializing in organizational management.

It has long been a business custom for companies to accept fresh graduates en masse each spring, evaluate their potential and draw out their skills after they are officially employed. Less importance is placed on what kind of work they can excel at when they are hired.

While the electronics companies are reforming the traditional employment practice, they risk having their talented resources poached by competitors.

“If no measures are taken to increase the retention rate, we will just end up seeing so many people come and go,” a mid-level employee of a leading electronics company said.

Keiichiro Hamaguchi, head of research at the Japan Institute for Labor Policy and Training, said universities and students remain largely unchanged on how they see the recruitment practice.

“If companies drastically change their hiring measures, it could cause friction,” he said. “What matters in coming years is to see whether the hiring style of the major electronics firms spreads to other companies or they revert back to the previous practice.”

(This article was written by Kenichiro Shino, Takehiro Tomoda and Makoto Tsuchiya.)