Addressing the gender gap in Japan
Japan, the world’s third-largest economy, faces two challenges: a lack of female participation in the overall workforce, especially in the senior ranks, and an aging population. In the World Economic Forum Global Gender Gap Report 2020, Japan ranked 121st (out of 153), in part due to the lack of women in leadership and management positions. The rapid aging of Japanese society exacerbates the problem. Last year, the country’s population declined for the ninth year in a row – and those over 65 now make up 28.4% of the total population.
Before the pandemic, Japan was taking steps to reconsider its long-standing reluctance to recruit foreign labor. But part of the solution to Japan’s demographic problems is to encourage more women to participate in the workforce – and to participate more fully. Like Bbad Emmott said so in these pages in 2019, Japan must build a âmuch more feminine futureâ.
Kathy Matsui, a former vice president of Goldman Sachs who retired last year, was one of the first people in Japan to recognize that increasing female employment could offset Japan’s demographic challenges. . Matsui was born in California in 1965 to parents who had emigrated from Japan. After attending Harvard University, she first visited Japan in 1986. Eight years later, in 1994, she joined Goldman Sachs Japan. In 1999, while working as a strategist for Goldman Sachs, Matsui wrote an article titled “Womenomics. In 2013, the report was transformed into official Japanese economic policy by then Prime Minister Shinzo Abe.
The main objectives of this policy were to employ more women and to ensure that women occupy at least 30 percent of managerial and managerial positions. In a recent interview, Matsui says she believes Japan has succeeded in shifting gender diversity out of the realm of human rights and equality into the realm of business and economic growth.
Attracting women out of economic necessity, Matsui said, was a stepping stone to discussing gender diversity more openly – in Japanese businesses and among the general population. âThe biggest obstacle or stumbling block from my perspective has always been this mindset obstacle: getting people to care about gender diversity. Changing this context was a very important first step. “
There has been progress. After former Prime Minister Shinzo Abe began more actively promoting gender diversity at the start of his term seven years ago, the female participation rate (the percentage of women aged 15-64 who are employees) increased from 56% to 72%. That’s an increase of about 3 million women. âIt’s higher than where I’m from – the US – as well as the EU,â Matsui says. This growth has been made possible, primarily, by policy changes. For example, Japan has one of the most generous parental leave systems in the world. (Mothers and fathers are entitled to one year of parental leave, during which their pay equals 60 to 80 percent of their salary before the leave.) More surprisingly, parents can take parental leave until their first birthday. their child. âOf course, all women take it and not enough men, but the system itself is extraordinarily generous,â notes Matsui.
However, the government has had much less success in strengthening female leadership in the corporate world. Last year, the government acknowledged that it needed to push back its target of 30% of leadership positions – between corporate leadership positions and CEOs – held by women from 2020 to 2030. âThey should have been. at least explain more clearly Why they didn’t achieve their goal, âsays Matsui, who criticizes vague ambitions. âWhat were the obstacles? What is the roadmap to reach the goal? What concrete steps are they taking? It is not enough to turn off a target or delay it. “
Currently, women make up less than 10% of all business presidents in Japan. A study by the Teikoku 2020 database found that out of 1.2 million Japanese companies, only 8% had female presidents, which is still 3.5 percentage points more than in 1990.
One of the reasons why so few women advance to managerial positions is their overrepresentation in irregular work, known in Japanese as Hiseiki. Almost half of all female workers have such hiseiki contracts, which pay lower wages and generally offer fewer opportunities to advance their careers than full-time positions. In contrast, only a quarter of all working men have this type of contract. According to the Ministry of the Interior and Communications, an astonishing 970,000 irregular jobs have been lost directly or indirectly as a result of the pandemic; 700,000 of these jobs were held by women.
An astonishing 970,000 irregular jobs in Japan have been lost directly or indirectly as a result of the pandemic; 700,000 of these jobs were held by women.
So how can Japan evolve into a society “where women can shine,” as former Prime Minister Abe said? Matsui argues that it is vital to reconsider the current rating system in Japanese companies. âThe key measure for evaluating performance is time. I like to call it âface timeâ. Men, who are the primary breadwinners in many Japanese families, often work for organizations that have time or seniority as a key metric to assess performance, âsays Matsui. This encourages men to spend as much time as possible at work, leaving women to take care of the family. “The main reason women leave work is childbirth combined with a lack of child care.”
Matsui argues that Japanese companies need to move towards a performance-based assessment approach. And it is possible that the pandemic will provide momentum in that direction. The shift to remote work could force companies to stop promoting overtime and put more emphasis on production. Or as Benjamin Cordier, Managing Director of RGF Professional Recruitment Japan, mentionned last year about such a change: “It could level the playing field for men and women in the workplace.”
Matsui points out, however, that the Japanese government has effectively removed some of the barriers that traditionally prevented women from rising through the ranks in Japanese companies. The corporate governance code, introduced in 2015 and reformed in 2018, encourages greater diversity within boards of directors. The code states that boards should “be constituted in such a way as to ensure both diversity, including gender and international experience, and an appropriate size.” The 30% Club Japan, a diversity activism group, monitors data on gender in the country’s financial services industry and saw a 2.4% increase in the number of female directors in 2019 compared to a year earlier. This change indicates that the code prompted companies to hire more female directors.
Starting in 2016, the government required companies to make gender diversity disclosures. âThe government encourages organizations to set explicit targets, such as ratios of female managers and female directors, or something similar,â notes Matsui. “The first step is always to measure.”
But she cautions that we shouldn’t be looking at the government alone. âThe responsibility lies with employers and managers, because at the micro level, they are the ones who take care of promoting women and finding the best female talent,â says Matsui. The government can build child care centers, but it cannot “interfere with the inner workings of mentoring by directing their female talents.”
Twenty-two years after the publication of âWomenomics,â Matsui believes people are starting to understand the economic logic behind his article. âAs a woman manager, I have spoken to many, many companies. Ultimately, the best way to convince people of the urgency of nurturing female talent is hard data and empirical analysis. If you can show that the data shows that greater diversity leads to better overall performance, human behavior will eventually follow. “According to a report written by Matsui in 2019,”Womenomics 5.0Closing the gender gap could increase GDP by 15%. Additionally, publicly traded companies with higher female executive ratios tend to offer better return on equity and higher sales growth. âI think it’s becoming clear that this is an argument based on an economic rationale as opposed to an emotional or values-based argument,â she said.
Matsui sees positive developments in gender diversity in companies around the world, noting NASDAQ recent requirement that publicly traded companies have greater diversity on the board. “All this war for talent, not just here [in Japan] but overall it means you have to create an organization with a culture that will be open to a whole range of diverse ways of thinking, âshe said. âInnovation does not come from a group of people who have the same education, the same socio-economic background or the same gender. It comes from the friction and tension that emerges when people with different perspectives come together. And that’s a competitive advantage. “
But managers still have a lot to learn to manage female talent and understand why they might decide to quit or decline a promotion. Although this is a global problem, it remains much more common in Japan than in the West. âWhen a woman turns down a promotion because she thinks she’s not good enough – which is very common – do you just accept it and move on or try again? I always recommend trying again. And when you ask her again, make it clear that you wouldn’t have recommended her for a position if you hadn’t believed and had full confidence that she could be successful in this new role.
The idea that women could resort to additional encouragement did not fully land in Japan. “I don’t mean to say that men don’t need that extra boost, but women need it even more, given the confidence gap which I think is pretty universal,” Matsui said. âIf you think you need to fix diversity, what exactly are you supposed to do other than create a diversity committee or write a report? What exactly are you doing at this micro-level to reach and motivate your high potential female talent? This is where I see a gap.
Matsui advises ambitious young women to find a group of supporters around them. âI certainly didn’t climb the ranks of Goldman on my own. I had people who supported me, âshe says. Women in the workforce need cheerleaders, sponsors and mentors – people who can guide them. “When I was lost, it helped me a lot.”
- Bobbie van der List is a correspondent for Dutch newspapers and magazines. Based in Tokyo, he specializes in business and management related topics.