The labour scholar Keiichiro Hamaguchi popularised the contrast between two models. In membership-type employment, a company hires people rather than filling jobs, then assigns and reassigns them as it sees fit. Pay follows the person's grade, built up through ability and tenure. In job-type employment, the company defines the role, hires someone to do it and pays according to the role's size and the market. Most of the world works the second way. Large Japanese companies have traditionally worked the first.
Since around 2020 several have moved. Hitachi wrote job descriptions for almost all its employees and set out to complete the shift. Fujitsu introduced job-based grading for around 15,000 managers in April 2020 and then moved to extend it to other staff. KDDI moved to a job-based system from 2020, ending a uniform starting salary for graduates. Shiseido is another widely cited case. The government has backed the trend: the Cabinet Secretariat, the Ministry of Economy, Trade and Industry and the labour ministry jointly published Job-Based HR Guidelines in August 2024, with case studies from 20 companies.
Concede the shift is real, then note its limits. Most Japanese versions are hybrids, often applied to managers first. And the law has not changed: if a job disappears, the employer still has to look for another role before dismissal can be justified.
What it means for a foreign employer
- "Job-based" on a Japanese CV may still be a hybrid. Ask how grades, pay and transfers actually work at the candidate's company.
- Dismissal law is unchanged. Writing a job description does not let you end employment when the role goes. Courts still expect redeployment efforts.
- Candidates from these companies are easier to level. They are used to role scopes and graded pay, which makes mapping to your global grades less contentious.
- Competition for specialists is rising. Japanese companies that pay for the job can now match foreign employers more closely on pay for scarce skills.
- Add skills tests, don't swap them in. Work samples and case exercises are increasingly accepted, especially in technology and mid-career hiring, but Japanese candidates still expect the relational conversation. Use structured assessment alongside it, not instead of it.
Sources
- Cabinet Secretariat, Ministry of Economy, Trade and Industry and Ministry of Health, Labour and Welfare, Job-Based HR Guidelines, 28 August 2024.
- Nikkei reporting on KDDI (July 2020) and on Hitachi and Fujitsu's job-based systems.
- Keiichiro Hamaguchi, writing on membership-type and job-type employment.