Exchange Rate and Talent Shortage (4)

Director of HR-Services Division of Central Japan Industries Association,
Auditor of RIIM CHU-SAN-REN, Inc.


I would like to consider tips about how to find ways of survival in the circumstances surrounding Japan.
Until two years ago, the export manufacturing industries had been complaining about the negative impact of strong yen. At the end of last year, there was a lot of fuss about a violation of emission control by Volkswagen, Germany. It seemed a company-wide violation, and admiration for the company which has the world’s highest sales turnover completely changed. However, it was considered as a matter of a foreign country in Japan.


How about the present situation? The quality and reliability of Japanese products are considered as suspicious because of problems such as padding of business results by a large multinational  electrical manufacturing company from Japan, falseness of the groundwork of condominiums, and violation of emission control by Japanese automobile companies. Although the weak yen tendency is changing to strong yen, this is a double-edged sword. As mentioned in the last article, there is little advantage from weak yen for small and medium-sized companies that do not export things directly.


The expansion of the entry of foreign care workers and nurses, which has been expected since several years ago, has not been advanced as expected. This is not because they do not read kanji (Chinese characters). The biggest reason could be because their incomes decrease when converted to the currencies of their countries owing to the weak yen, thus there are less advantages to work in Japan. Even though we indicate Japanese reading aids alongside kanji to support them, we cannot conquer money problems. They tend to go to other countries such as the U.S. in order to get a strong dollar. Paying wages in Japanese yen to foreign workers means that the value decreases to around 60 to 70% of the former value in dollars or their countries’ currencies.


Even if visitors to Japan increase, as long as services are provided by people, the shortage of high quality human resources may cause difficulties in getting 20 million visitors a year, which is a national goal. Similar situations could easily occur in the construction industry or the automobile-related industries, which are seen as doing well. It may lead to a reduction in quality or productivity. In short, it is not an issue that weak yen is good and strong yen is not. When they are balanced well, a structure in which both exporting companies and domestic-oriented companies can gain profits can be realized.


Japanese companies established a strong presence in the world in the 1980s with their high quality products. However, at present, they have wrong marketing or differences of product concepts in their product development. Even in manufacturing itself, which is crucial for the country, they cannot catch up with the global trends. There is a pile of problems about company strategy, compliance, and vitalization of employees. All of these aspects depend on people, and can be realized only when high quality human resources are provided. The present situation is, however, that problems such as a human resource shortage, or lack of them in some industries, are emerging.


Our starting point must be reconfirmation of our own status. We should grasp not only one-sided truth, but also truth from multiple aspects in a well-balanced way. We should consider the advantages and disadvantages of strong yen and weak yen at a time. The most critical problem at present can be said that it is necessary to reconsider basic strategy of each company by considering both of the advantages and disadvantages, and balancing them. The conversion of the overall industrial structure is not attributed to each company. However, securing human resources is becoming their biggest and key issue.


At the same time, establishing win-win relationships with the Japanese market and Japanese companies which can find ways of survival only in overseas expansion has become a clear target for people in other countries.


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