The name comes from professional baseball, where a player who has served enough seasons can declare free agency and negotiate with other teams. In the company version, an employee who qualifies declares FA status and posts a profile of what they can do and what they want. Departments that are interested make an offer, and the employee decides whether to accept. Where internal job posting starts from the vacancy, the free agent system starts from the person.
Eligibility is usually limited. Sony's scheme, which produced its first moves in April 2016, required three years in the same department and high evaluations. When it began, 200 to 300 employees were granted FA rights, and about 30% used them. Hitachi has run a scheme since 2003, and several other large manufacturers, banks and trading companies operate their own versions. Adoption is lower than for internal posting. The Japan Productivity Center found 3% of companies had one in 2001 and 12.5% in 2009; more recent surveys tend to combine the two systems.
The underlying purpose is the same as for internal posting: to let strong performers move without leaving, and to loosen the hold of HR-led rotation. The difference is that the free agent system is targeted at people the company most wants to keep.
What it means for a foreign employer
- FA rights mark a strong performer. A candidate who has been granted FA status has passed an internal performance filter. It is a useful signal when assessing a CV.
- It is a retention tool aimed at your targets. Companies with FA schemes are making it easier for exactly the high performers you want to hire to find a new challenge without resigning.
- Ask why they did not use it. If a qualifying candidate chose an external move instead, the answer usually tells you their real motivation.
Sources
- Japan Productivity Center, Survey on Changes in Japanese Employment and HR Practices (published January 2010).
- J-CAST Kaisha Watch, report on Sony's internal FA system, March 2016; Nikkei, March 2016.
- Hitachi, company disclosures on its internal FA system.