Heading en masse to new positions in Japan's major corporations, fresh university graduates in black suits have become as common a sight in Tokyo as April's cherry blossoms. But this year, things are different. According to a closely watched annual survey, the companies that were once synonymous with Japan Inc. Toyota, Sony, Sharp and Canon have lost their luster as potential employers. For those seeking secure jobs-for-life, students are instead looking to relatively low-risk industries such as railroads and public utilities.
The survey, a poll of nearly 6,000 university seniors conducted by Recruit Co., a Tokyo-based research and human resources company, revealed that Japan's flailing, export-driven economy has had a profound impact on the outlook of those on the brink of entering the workforce. Toyota's ranking as a preferred employer plummeted from 6th place last year to 96th place this year. Sony fell from 8th to 29th place; Sharp from 14th to 55th place; Canon from 20th to 77th place. (See pictures of the global financial crisis.)
And which companies are the top five dream employers? Central Japan Railway and East Japan Railway Co. rose to first and second place (up from 4th and 9th place last year). Japan Post formerly the public office that the government began to privatize in 2007 jumped 357 spots to rank 30th. Chubu Electric Power and Kansai Electric Power both gained more than 50 places each to rank in the top 50.
It's not surprising that automakers and electronic companies are no longer as appealing as they once were. Toyota Motor, which has typically ranked in the survey's top 10, will likely post its second straight operating loss in its 2010 fiscal year right when the students polled by Recruit will be entering the workplace. The company is expected to report a loss of $4.9 billion when it announces its 2009 results on May 8. Last week, Sharp Corp., too, slashed its outlook for its fiscal year ending March 31, to a net loss of $1.29 billion. (Read "Sony's Woes: Japan's Iconic Brands Under Fire.")
Recruit collected the data between Jan. 30 and Feb. 16, as a series of dire economic indicators painted a dismal economic outlook for Japan and major companies were laying off workers in waves. "News reports about worsened business and manpower conditions came out one after another," says Recruit spokeswoman Yuri Ito. "This survey is done around the time companies announce their recruitment plan for the following year. So some students might vote for those that plan to hire aggressively." Export-driven companies, out. Instead, "Students consider companies in industries like infrastructure and food, which are robust in a recession... companies that are stable and don't go away," says Ito. "Their parents think the same."
Grad students in engineering fields, of whom 1,860 were polled, still chose Panasonic as their ideal employer (followed by Sony), but automotive-related companies dropped in rank, and household products (including cosmetics) and pharmaceutical companies grew in popularity. The largest gains were seen by cosmetics companies Kao and Kose, food company Meiji, and three pharmaceutical companies: Shionogi & Co., Chugai Pharmaceutical Co., and Astellas.
Kevin Gibson, managing director of headhunting firm Robert Walters Japan, says he, too, is witnessing a flight to risk-free industries. "We see a gravitation away from banking and, oddly enough, manufacturing is perceived as insecure now," Gibson says. Robert Walters is placing a large number of executive and management talent into health care and the pharmaceutical industry. "It's getting fantastic people from I.T. and banking people that [those industries] wouldn't normally be able to employ." But Gibson says the brain drain from old-guard companies may not last. "Media spent so much time beating up on these companies," he says. "They will bounce back."
With reporting by Yuki Oda / Tokyo