Womenomics in Japan – Is it working?

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Womenomics in Japan – Is it working?

Header Photo credits: Photographer: Tomohiro Ohsumi/Bloomberg

With a population set to shrink by 30 percent and elderly ratio to increase to two-fifths by 2060, Japan’s Prime Minister Shinzo Abe announced in 2014 a “Creating a Society in which Women Shine” – or more commonly referred to as Womenomics – government initiative to help boost the workforce and economy. The reason is that more women working would translate to higher potential output and improvement in average household income, and an overall higher spending power as consumers. Closing the gender employment gap might not be an easy feat but it is definitely a mountain worth conquering. According to multinational finance company Goldman Sachs, accomplishing this could essentially boost Japan’s GDP by 13 percent, a carrot that has spurred the Abe administration to roll out new laws and regulations, some of which include: requiring businesses operating in Japan to publish their plans to increase women in their management teams; and accessing the proportion of women in their recruitment process. It also aimed to raise the ratio of women in management positions to 30 percent by the end of 2020, a ten-fold increase from 3.1% in 2015.

On some levels, the initiative has worked. Unemployment for women dropped to 3.5 percent in 2014, and labour participation rate is at the highest that it has ever been in the past 15 years or so.  The Global Summit of Women – an annual business and economic forum that brings together more than 1,300 business and political leaders from more than 60 countries for an exchange of ideas on how to expand economic opportunities for women – arrived on Japanese soil for the very first time in 2017, bringing along with it inspiration and practical knowledge for Japanese women to cultivate essential changes.

But scratch the surface of these promising statistics you will find a different truth. Employment rate for women might have shot up but the numbers are bolstered by irregular part-time and contract jobs; in 2015 part-time jobs and contract roles account for 53 percent of employed women.

The initial bold ambition of placing 30 percent more women in leadership positions has since been yanked back down to earth; it is now reduced to 7 percent for national civil servants and 15 percent for local public officials and private corporations. New regulations reward companies that have exclusive plans for women, offering them preferential treatment when bidding for public tenders. However, those without concrete numerical targets or those who failed to meet these targets are not penalized either. So it is apparent that change is required on a more fundamental level, beyond a mere tweak in company standard operating procedures, and it needs to happen at a quicker pace. While not purporting to be an expert on Japan’s economic and cultural challenges and opportunities, there are some simple initiatives that companies could implement – and clearly there are some more enforced government initiatives that may help the situation…

Revising Spousal Tax Break

Organic cultural changes take many years so sometimes, it takes “engineering” by the government to hasten the process. For example, the government could look at revising the spousal tax break offered to couples if either one of them earns ¥1.03 million or less in a year. This has been seen as a de-motivator for women to excel in their career as it often means incurring a financial penalty.

Better Childcare Services

Up to 2015, less than 40% of women returned to the workforce after having their first child (in the UK it is 75 percent; and in China over 56 percent). Childcare services are scarce and expensive; children often have to go on a waiting list for months. With a lack of available daycare services, many women choose to either settle for part-time work or not work at all. It is well known that affordable childcare has been a barrier for women re-entering the workforce – surely this needs to be at the centre of Womenomics.

Work Environment

With the often brutal working hours expected in Japan (with the caveat of the Government making attempts to change this), the environment is simply not conducive for many working mothers (and not healthy for anyone). Reducing hours may also encourage men to take part more in household and childcare responsibilities and reduce the expectation on women to automatically assume this role. The creation of flexible working arrangements and a focus on output and performance while still seemingly a pipe dream, simply has to happen.

Government – Walking the Talk

Female representation in Parliament in Japan is woeful by world standard, languishing at just 10 percent while many European countries boast over 30 percent, Australia at 29 percent and China and Singapore at 24 percent. If Womenomic is to have any impact, the government will need to lead the way.

Men – Step Up!

Male champions of diversity are essential for success, so there needs to be a concerted effort by prolific public and commercial figures to champion greater representation of women in the workplace. It is deep rooted in Japanese society that a husband whose wife is working may not be able to “provide”; how this ingrained perception can be dismantled is no doubt a challenge.

It is complex and challenging but with an ageing population and shrinking workforce, women clearly have a role to play. And one company has been in the news for just this. The Calbee Group, one of the largest snack & food manufacturers in Japan understood that the vast majority of potential customers were women and that having women involved in planning might be a way to increase revenue.

A mother returning to work, Yumiko Aboshi led the marketing efforts that turned around an ailing division – and Akira Matsumoto, Calbee’s CEO, has probably been the most outspoken Japanese executive advocating for workplace diversity. “If you don’t like diversity… You’re welcome to quit,” he told a forum earlier this year. In addition, the company has shifted from a culture that valued number of hours spent at work to one that rewarded results, efficiency and productivity.

A female senior executive, a male champion and a culture shift… Clearly a triple whammy and a framework for change? Only time will tell.

The original article on Calbee Group’s success story can be found here.

About the Author

Helen Soulsby is the Managing Partner, APAC for SRi, an international management consultancy and executive search company specialising in sports, media and entertainment market.

Leading teams throughout the region, Helen’s role is to drive performance and growth in the Asia business through partnering with clients to deliver executive search assignments, as well as advising executive board structures on how to best executive broad business strategies. In the Japan market, Helen has worked with many international clients on establishing local teams and consulting on overall market tactics.

The SRi Asia team has built a reputation as the leading business in the region in delivering multi-hire projects that enable businesses to launch in the Asia region with maximum impact. Helen can be reached directly at hsoulsby@sriexecutive.com or +65 6536 6634.