Thursday, September 16, 2010

Japan: Delayed Retirements and Employer Preparedness

According to Florian Kolbacher, Japanese organizations have not prepared themselves well for the aging of the world's population, even though Japan is by far the most severely affected nation. Japan's "Year 2007 Problem" (referring to the year in which the first Japanese Boomers turn 60, and thus move into mandatory retirement) could potentially crippling Japanese business from the widespread loss of industry-specific knowledge.
A major reason for concern among Japanese businesses is that Japanese corporate culture has a very distinctive management approach, especially within large organizations. Knowledge is primarily tacit, or taken for granted, and frequently absorbed over long periods of time as workers slowly advance through organizations as they age. Subtleties associated with this type of knowledge, though, are difficult to quantify, document, or access for a new hire.
However, Kobacher reports, 2007 labor crisis failed to materialize, because Japanese Baby Boomers did not begin retiring en masse as expected, but continued working. Neverthless, this has only accentuated other business and social issues in Japanese culture.
Now, though, as older workers remain on the job longer, they are finding that their jobs are changing. "Younger employees, previously lower within a company’s hierarchy, now work in higher positions and are even sometimes direct superiors to their elders," Kohlbacher explains. "Older workers, when rehired, are often managed by former colleagues and even subordinates; hence these older workers are often ranked lower in the hierarchy than younger employees - a difficulty in Japan because of the strongly ingrained seniority system."
Kobacher's comments derive from a presentation to American Chamber of Commerce in Japan (ACCJ) on "Management Implications of Demographic Change in Japan: An Innovation Perspective" in August 2010, published in an article Baby Boomer: What happened to the ‘Year 2007 Problem?" in the April 2010 edition of ACCJ Journal.

Sources: Sloan Center on Aging & Work at Boston College News Release (September 13, 2010); News Release (September 15, 2010)

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