How to hire top engineers in a competitive Japanese job market?

Hiring engineers in Tokyo is not easy.

Studies estimate the jobs to applicants ratio in the IT industry at anywhere between 1.5 and 3, and with the border closed for the past year, companies have to almost entirely rely on the domestic market to fill their open positions.

This gives even more leverage and choices for candidates, raising an important question for companies: how to hire top talent?

To answer that question, I am happy to sit down today with Eric Turner, co-founder and CEO of the boutique hiring platform Japan Dev. Eric used to work as Engineering Manager at one of Japan’s unicorns Mercari, and most recently decided to quit his job to fully focus on his venture.

About Japan Dev

First of all, congrats on becoming a full-time entrepreneur! Before diving into top tips for companies, can share with us your vision for Japan Dev?

I’ve been in Japan for quite a while now, and it’s actually the only country I’ve ever worked in as an engineer. I’ve also switched jobs several times and worked at four different Japanese start-ups. But I’ve always found it hard to find companies offering the working environment I was looking for.

This is the problem that we’re solving with Japan Dev: What are the options out there for people who want to work in Japan, but don’t want to compromise on working environment?

I’ve read my share of horror stories about Japan online on sites like Reddit. The prevailing narrative seems to be “Don’t go there, you’ll be underpaid and have to work overtime”. But I don’t think this is necessarily true. Now I am not going to lie. There are still many positions for “system integrators” and more traditional companies where this would unfortunately be true. But I realized there’s also a new wave of modern venture start-ups that understand tech and want the best for their employees. Our goal is to tell you: these are the good jobs at companies that you want to work for.

Great! So I am assuming you do some sort of due diligence when you add a company to your platform?

Indeed, we do. We systematically ask companies what they are doing for diversity and inclusion, what specific overwork policies they have, what their minimum salary is, and more. We made the choice not to post any job with a salary lower than 4 million Yen annually, which we’ve identified as a minimum threshold for companies that “respect” software engineering.

From a Japan Dev user perspective, you’ll see mostly companies that build their own products and modern consultancies. And we share key data that we gather before posting the job: how diverse is the company, what tech stack is the company using, how many days of vacation a year you’ll get… Basically, what foreign engineers care about when choosing a company.

We’re not specifically targeting foreigners, but they still represent 70% of our users. Our reach overseas is also pretty good, although right now is not the best timing for that (laughs).

What’s in it for companies? Why would they pick Japan Dev over more traditional recruitment agencies?

It depends on the company. For smaller startups, it’s a great way to get their name out there. They also get access to me: I have experience as a hiring manager, I understand the hiring process, so I can provide consulting and help them tailor their message to attract candidates.

“Our flat fee structure is designed not to penalize companies for paying high salaries”

Another big plus with Japan Dev is our fee structure. Most recruiting agencies in Japan charge a fee proportional to a candidate’s salary level. And with salaries increasing and job changes getting more frequent, these fees are getting quite expensive for companies. That’s why we’ve opted for a flat fee upon successful hire rather than a percentage. We feel it’s more sustainable, and more importantly it doesn’t penalize companies for paying high salaries.

Hiring top people: transparency is key

On to our main topic for today… What do you usually tell companies to help them improve their attractiveness?

I see five areas that you can work on and improve if you’re trying to attract top engineers, especially international ones:

• Salary range
• Diversity
• Code Quality / Technical Challenge
• Flexibility
• Vacation 🌴🏖

But at the end of the day, I think the most important factor of your hiring process from start to finish is Transparency: Explain in detail how the interview process will unfold. Get the applicant to talk with your employees, make them experience the working environment. Be very clear about your stack and the technical challenges you’re offering. In short, the more open you are about everything that’s happening at your company, the higher your chances are to hire top engineers.

“Don’t make top engineers jump through too many hoops”

I also think there are some specific actions you can take that’ll really help you get ahead of the pack:

• Open Source — Being the company behind a library or gem is huge. Cookpad is a great example. When they released their first open source code, everybody wanted to work for them.
• Be flexible with your hiring process — Basically, you need to adjust your process to the candidate. Take home projects are okay for more junior people, but a senior dev really doesn’t want to spend 8 hours on your assignment.
• Tech blog —Similar to open source, it shows that you care about tech. And it gives candidates peace of mind by showing them exactly what types of projects they’ll be working on.

It seems that most companies now have a pretty detailed “Recruit” page though?

Right! The problem is, as an applicant it’s really hard to cut through the noise. Of course, every company will present itself as being a great place to work — and companies know what to say to cultivate that image. Our mission with Japan Dev is to help you find the companies that genuinely mean it.

I’ve also identified some simple changes that companies can make to better attract non-Japanese candidates. For example, 15 annual days off instead of only 10 makes a huge difference, especially considering it doesn’t cost you much as a company. Working hours is another area where companies sometimes shoot themselves in the foot. You’re advocating flex time, letting your employee come in at 10am, but the working hours you advertise are 10 to… 7pm. Most applicants will zero in on that “7pm” and get the wrong message. It can end up putting off a ton of applicants, essentially due to a miscommunication.

“The most important factor of your hiring process from start to finish is Transparency”

Quite a lot of companies just do quick and dirty hiring work: they’re going to copy / paste a Recruit page they like, copy / paste a couple of job descriptions, not pay attention to details, and here you have it, a great example of what NOT to do. If you care about your future employees, respect them and spend time painting a clear picture of what it means to work for you. That’s one of our main strengths at Japan Dev: we help companies revamp job descriptions and help them express who they really are as a company.

It’s probably not in your best interest to advertise this, but… What’s your stance on referrals?

I may run a job board, but even I have to admit that involving your employees is still the best way to hire. And there are many reasons for this: first of all, their voice is going to sound more “genuine” than whatever you, as a hiring company, will ever say about your working environment. Second, even if you pay a referral fee, it’s still going to be cheaper than what recruiting agencies charge. Lastly, there is a “virtuous circle” aspect to it: spend money to take good care of your existing employees, they’ll spread the word and you’ll save money on recruiting fees.

With Japan Dev, we try to get as close as possible to this referral model. We charge an affordable, flat fee similar to what companies would pay for a referral. That way companies feel like they’re getting a good deal, and they can keep hiring through the platform for a long time.

The Japan situation

Moving to Japan’s attractiveness, do you think the country has a role to play on the world IT destination map?

My goal is to make Japan #1 in tech. Which of course means I have to acknowledge that’s not yet the case. When it comes to attracting top talents, the number of companies that can compete globally is still relatively small. Having said that, I’m optimistic. Venture funding has been increasing rapidly, and more globally-competitive tech companies have been popping up. My former employer, Mercari is one of the best examples. They showed it was possible to be wildly successful by doing things the “global” way, and more companies are now following this model.

“My goal is to make Japan #1 in tech”

One of the main reasons Japan still lags behind places like the US is salary levels that are significantly lower. I’ve tried to showcase the fact that there are some great companies paying global-level salaries through Japan Dev and our blog posts. There are also a couple of initiatives trying to address this problem, like Open Salary, but it could still be a long time before Japan catches up to the US.

Not to mention a worldwide pandemic and closed borders…

Right, but I think that’s very good news for people who are already in Japan. Engineers in Japan, mark my words: you are very attractive right now. A good number of companies were trying to bring in people from abroad, and with that not being possible for the time being, I would say the job market is even better than pre-covid. If you’re currently working as a developer, and feeling underpaid or looking to switch companies, now is the time!

Thanks a lot for your time and insights Eric, and all the best with Japan Dev! 🚀