Japan’s Womenomics: Government and Society Foot-dragging Opens Opportunities for Foreign Companies

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Before 1985, you could hardly find a Japanese woman in business doing anything more than “office lady” activities: tea serving, copy making, paper filing, etc. As a foreign manager back in the day, I was told not to give them anything outside of that, since they were not capable. WHAT!?!?!? I needed help, and I knew these women were absolutely capable of handling more. CarterJMRN has been following trends related to “women in the workplace” for over two decades now; a few key facts show what progress has been made, and how much still needs to be done! The good news is that foreign companies in particular stand to benefit from the slow pace of change related to women in Japan, whether viewed through the lens of recruiting good employees or expanding loyal customers. Women in the workplace – a slow process that may finally be picking up I’ve watched over the years as:
  • The Equal Employment Opportunity Law took effect in Japan in 1986, paving the way for women to advance to higher-level positions.
  • Kathy Matsui of Goldman Sachs coined the term “womenomics” in 1999, making a strong case through her research that empowering Japanese women in the workplace will help revive the Japanese economy.
  • Labor market reform in 2007 was enacted to promote a higher percentage of married women aged 25~44 in the workforce (to 70%) by 2017.
More recently, Prime Minister Abe’s government enacted a law in 2015, aimed at achieving gender equality in the workplace, requiring companies with 301+ employees to set targets for increasing women in management (and to publish their results). But there are no consequences for failure to comply. Progress has been made, but honestly, I would’ve hoped that in the past 30+ years, Japan could have done better with its embracing of women in the workplace. The facts are clear:
  • It is still difficult for Japanese women with children to remain in the workforce.
  • Women still make less money than their male counterparts.
  • It is still rare to find women in top positions.
Unfortunately, simply raising the sheer number of women in the workforce is not enough. Finding ways of truly embracing women – including as company leaders – is where the real challenge lies. Lack of job satisfaction beats out lack of childcare as the real reason Japanese women exit the workforce Perhaps the focus should not be solely on the quantity of female workers, but on the quality of their workplaces. In a 2018 Goldman Sachs survey (Womenomics 4.0: Time to Walk the Talk), the main reason for women leaving their jobs is “lack of job satisfaction” (63%), followed by “felt stalled in career” (49%). Other reasons were given at lower levels – “lack of eldercare” (38%) and “lack of childcare” (32%). The challenges of meaningfully improving the situation for women in the workforce in Japan are complicated. Not only is the infrastructure weak, such as with lack of accessible eldercare or childcare, but the working environment in Japan is relentless, requiring long hours and selflessness, including unexpected over-time and after-hours work. Traditional culture does not favor women in this situation. Although some males are starting to pick up the slack, household and child management responsibilities largely fall on their female partners whether working or not. Yet according to the Ministry of Affairs, in 2016 there were 2.74 million unemployed Japanese females between the ages of 15-75 who wanted to work. This shows much potential for growth. Women as employees and as consumers – overlook them at your peril As we pointed out 10 years ago, global studies have shown that companies that do not embrace the concept of the economic importance of women are actually doomed to fail. This is because women are not only an important talent pool for improving business strategies and operations; they also make approximately 80% of consumer purchases worldwide. An empowered female workforce that is paid fairly will not only be reflected in the future success of companies, but also in the future improvement of the consumer economy. This is particularly true in Japan, where the dual pressures of the aging society and the shrinking workforce make creating an inclusive and diverse workforce a critical part of moving forward. More women in top management means better financial performance In her lecture “Womenomics: Myths, Progress, and the Path Forward,” at The Japan Society of Northern California, Matsui pointed out that one of the biggest myths is that diversity in the workforce has no impact on corporate performance. In fact, exactly the opposite is true. Companies with a larger representation of women on their top management teams experienced better financial performance than companies with fewer female managers. Gender balance in the workplace results in rising purchasing power and overall economic growth A McKinsey Global Institute (MGI) report (The power of parity: How advancing women’s equality can add $12 trillion to global growth), focuses on the economic implications of lack of parity between men and women, and projected that $12 trillion could be added to global GDP by 2025 by advancing women’s equality. Foreign companies are in a good position to play leadership roles In a CEPR Policy Portal article from 2016 (Multinationals and female employment: Japanese evidence), researchers found that foreign companies are more gender equal than their Japanese counterparts. The percentage of females working in managerial and board positions is higher, more family friendly policies are in place (i.e., diversity and inclusion programs, flextime, telecommuting, on-sight day care, etc.), and salaries and vacation utilization are higher. Indeed, anecdotal evidence suggests that Japanese women are likely to have greater career opportunities in foreign affiliates operating in Japan than in Japanese firms. Closing gender gaps in work and society so that Japanese women can be properly incorporated into the workforce will require diligence and innovation by public, private, and social sectors. It will take perseverance for businesses to address embedded cultural hurdles that hinder the creation of better working environments where women can thrive. However, as more and more Japanese women achieve balance in the workplace,  they will also see an increase in economic clout and purchasing power. Those companies that successfully promote and empower Japanese females will no doubt have an edge when it comes to female consumer purchase decision-making. Women at work – it just makes good sense Even with the slow pace of change in Japan, I can honestly say that things are MUCH different here than when I arrived in 1985. When I go to client meetings, there are more women sitting across the table – and more of them are “in charge”, too. In our own company, the ratio of females to males is high, and there is no so-called glass ceiling. The variations of work are changing, too, with technology offering more alternatives to traditional work environments. Recently, we had a presentation in which five client-side viewers watched from the US (and we participated from Tokyo) while a Japanese colleague of ours presented the final report from Nagano with her 4-month-old baby hanging from her shoulders in its carrier. Of course, she did a wonderful job, and our client left that meeting with an even better image of our company due to our progressiveness.

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