07 Jul 2016

Not so shiny

Shinzo Abe’s grand plan for increasing the proportion of women in senior roles in Japan looks decidedly lacklustre, as DI RIX discovered

Japanese Prime Minister Shinzo Abe’s ambition to create a Japanese “society in which women shine” is tarnished.

Far from kickstarting a desperately needed economic revival as hoped, ‘Womenomics’ - which forms a major part of the Government’s third arrow structural reforms – has been decidedly lacklustre.

Accusations of tokenism have been given to legislation – passed last August – that companies and public bodies with more than 300 employees must set numerical goals for the employment and promotion of women.

Without quotas or penalties for non-compliance, most say the law is all but meaningless.

By the time Tokyo hosts the 2020 Olympic Games, Prime Minister Abe’s 2013 target of having women in 30 per cent of senior roles has already been revised to 15 per cent. The figure is currently 3.1 per cent.

And his own administration – with only 3.5 per cent of female-filled senior jobs – is a poor role model.Compare that with, say, the 35.5 per cent of women in top jobs in Norway and the world’s third largest economy looks out of kilter.

The OECD predicts Japan’s GDP growth will be just 0.8 per cent this year.

Yet 17 years ago, Kathy Matsui, Vice Chair of Goldman Sachs Japan - who coined the phrase ‘Womenomics’ - argued that figure could be boosted by up to 13 per cent simply by employing more women.

So what is hindering progress?

“Labour productivity here hasn’t grown for 20 years and is still at 60 per cent the level of that in the US,” says Professor Nicholas Benes of Tokyo-based Board Director Training Institute. “There are lots of smart women who are not being allocated to their best use economically.”

He believes Japan’s problems stem from a lack of corporate governance, its rigid labour laws and the lack of mobility they allow.

“Slowly companies are setting targets for women in senior roles. But unless the Labour Contracts Law changes and the regular employee system is abolished, then 60 per cent plus of Abe’s Womenomics targets are a pipe dream.

“For a competent woman it is now rather easy to get board positions. But one seemingly token woman on each board will not change the fact that there are so, so few senior female managers in the executive echelons below that….down to age 35 or less.”

Dr Emiko Magoshi of TSE-listed Hitachi Transport System is that token woman and says: “The female managerial ratio here is about two per cent. There are very few women senior managers, no female executive officer and I am the first and only female board director.

“It is simply not normal to continue to underutilise women’s talent.”

Magoshi believes law changes are required to enforce short and flexible working hours, but that there is also a psychological barrier for women to overcome. “Women should muster up the courage to take a leadership role, grab it and then think about how to do it,” she says.

Kathy Matsui, Vice Chair Goldman Sachs, Japan credited by Shinzo Abe with coining the term ‘womenomics

Professor Benes blames many of Japan’s employment woes on the ‘job for life’ regular employee contracts that most workers enjoy and many in Japan consider their heritage.

“When Japan’s problems started 20 years ago, rather than cut these jobs, firms began hiring non-regular workers on ‘contracts of indeterminate duration’.

“Nearly 40 per cent of workers, mainly women, are now on these poorly paid contracts and in 95 per cent of cases, women who take maternity leave can only return to work on them, and so are rehired with a lower status. They suddenly become dispensable, are paid less for doing the same job and can be fired at will. The firm doesn’t invest in you, support or promote you,” he adds.

Sachiko Ichikawa, the only female board member at TSE-listed Anritsu (a Japanese company specialising in the test and measurement equipment market), concedes that while “the law can motivate companies to promote women, practical support for it is essential. Home working, flexible working hours and childcare leave, would allow female workers to balance home and office life.

“But companies seem to struggle to know how to implement this and often women return to work after childbirth hugely dissatisfied with the jobs they are assigned.”

Another of Abe’s targets is to boost the percentage of women returning to work after their first child to 55 per cent by 2020 (38 per cent in 2010) and to 73 per cent in general (68 per cent in 2012).

But figures from Catalyst Japan, a not-for-profit promoting diversity in business, bear out Ichikawa’s fears that they are too ambitious.

Catalyst Vice President Tsukiko Tsukahara says: “A 2011 survey found that 63 per cent of Japanese women left work not to care for children but because they were dissatisfied with their jobs and nearly half left because they felt stalled in their careers.”

Some point the finger at the massive gender pay gap in Japan where a woman, according to the OECD, earns 73 per cent of a man’s salary. The OECD average is 84 per cent.

Japan’s problems are many and varied and with the population plummeting, the birth rate stalling and the number of over 65s soaring, time is of the essence.

As well as labour mobility issues there is a lack of childcare facilities. As of April 2015, there were 23,167 children on day care waiting lists, which the Prime Minister hopes to eliminate by next year.

His other aim includes boosting the percentage of fathers taking paternity leave (2.6 per cent in 2011) to 13 per cent by 2020.

But in Japan’s patriarchal society, which encourages long rigid working hours and a culture of socialising with the boss after work, male role models for this are hard to find.

Tomoko Fukuyama, Chief Director of global snack food maker Calbee’s Middle Japan Business considers herself lucky.

Much has changed at the firm since forward-thinking Akira Matsumoto took over as CEO in 2009.

“Mr Matsumoto said the company was 100 years behind the global standard and so he set about promoting the importance of diversity and the role of women,” she says. Until recently he encouraged her to go home at 4pm to be with her two daughters.

The firm offers childcare facilities at its factory, flexible working for men and women and home working twice a week, and now has 63 senior women and five female executives.

“Some men may not be happy, but through diversity meetings, workshops and mentoring schemes, we try and explain why it is important for the growth of the company.

“Mr Matsumoto says that diversity is necessary for profit growth, that women are as talented as men, so why promote only one sex?”

Professor Benes proposes the Government introduces a labour contract promising severance pay commensurate with number of years’ service.

“If women had that sort of contract there would be a much larger chance they would stay, and if they performed, the company would be incentivised to invest in their skills. Until this happens there will not be women in senior or middle management positions. And if the Government wants women to both have children and work it will have to change the law.”

Perhaps the time has come for a ‘comply or else’ code to create the sense of urgency needed to accelerate change.

With the Tokyo Games not far away the opportunity is there for Mr. Abe to grasp.