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2024

♯02

Academy Letters

Evolving new employee training to create innovation
in talent development

Shoto Furuya
Chief Researcher
Recruit Works Institute

Yumiko Magome
Head of Learning & Development Division,
Hitachi Academy Co., Ltd.

As competition for securing human capitals grows increasingly intense, talent development also needs to evolve if companies wish to be chosen by potential employees. Here, we have a dialog between Shoto Furuya, Chief Researcher at Recruit Works Institute, who is involved in research regarding trends and workstyles among young talent, and Yumiko Magome, Head of Learning & Development Division, Hitachi Academy Co., Ltd.

As competition for young talent intensifies,
new issues arise in talent development

Magome What is your view of recent hiring trends?
Furuya Since 2010, the labor market in Japan has been a seller's market, making it particularly difficult to hire younger generations. The fulfillment rate for university graduates has fallen below 75%, which means that companies expecting to be able to hire four new graduates are only able to hire three. In the case of high school graduates, the recruiting competition rate is 4x, exceeding even the bubble era, and at some technical high schools, the competition rates are as high as 20-30x.

Over the past decade, large corporations have experienced a substantial rise in the recruitment of experienced professionals. The number of these professionals being hired by these companies has increased by tenfold. In the past, the ratio of hiring for new graduates vs. mid-career hires was 9:1, but that ratio is currently 5:5. This is in part because an external labor market is gradually being established in Japan, and it has become easier for workers to secure a higher annual income by changing jobs. There is statistical data showing that more than 40% of people who change jobs in their 40s saw an increase of 10% or more in their annual income after the change, and in the current environment, it is even easier for young people to switch to a job with better conditions. In fact, turnover rate for employees working at large corporations for less than three years has continually increased since 2010, currently exceeding 26%.

Companies are strengthening the recruitment of experienced workers who can apply their skills right away, because of the risk that new graduates will leave even after they are hired and trained. So who is responsible for talent development? We can expect that issues related to increasingly intense competition in recruiting new graduates, as well as keeping and training those employees, will become more prominent moving forward.

Moving from an era of "the company developing individuals" to an era of "self development"

Magome Up to now, the Hitachi Group has focused mainly on hiring new graduates, so for the most part, all entry-level hires underwent similar training together. In part due to the increase in hiring of mid-career hires, Hitachi introduced a Learning Experience Platform (LXP), in which employees can choose what they need to learn at any particular time, and training has become more personalized. Entry-level hiers learn the fundamentals through group training, but we have put in place an environment where they can learn according to their own job.
Furuya Simultaneous hiring and cohort style training began about 100 years ago at the Yasuda Hozensha, one of the predecessors of the current Mizuho Bank. During the day, employees would receive on-the-job training in the workplace, and in the evening they would study bookkeeping and other skills in a dormitory. This method of collectively passing on work culture and organizational culture by combining the workplace and the dormitory was highly innovative at the time, and subsequently formed the foundation for talent development at Japanese companies. This approach is not so effective today, however, amid the diversification of talents and life stages.

The personalized learning is a choice unique to the cutting-edge Hitachi Group. The focus shifts from "the company developing individuals" to "self-driven learning," making individual the main player. The mission of the company is to support individual developments.
Magome In the past, joining a well-established company and working your way up in the organization was seen as a good thing by society in general, and anything your immediate superior told you was gospel. Things have changed, however, and values are more diverse. If your own values don't match up with those of the company, you can quit the company and start over, and this is now seen as acceptable in society.
Furuya The results of my own research show that even if you change jobs less than three years after joining the company, there will be no negative impact on the formation of your future career. In today's society, you can have "do-overs," and you will get another chance to succeed. Meanwhile, there will be a difference between companies that invest in talent development, and those that do not. On-the-job training, which was the mainstream method for talent development in Japan, was not a factor in differentiation between companies. Now that human capital management has gained attention as part of management strategies, however, companies will no doubt demonstrate growth if they can bring about a second innovation by investing in talent development.

Evolving new employee training to create innovation in talent development

The value of "Experience" through training

Magome Work descriptions are changing at a rapid pace. Five years from now, there will probably be very few people doing the same work as they are now. That makes it very difficult to invest time in training. The goal of the Hitachi Group is to foster talent that is resilient to change, with the competency to demonstrate high performance and motivation no matter what they are doing. In other words, talent who are able to take on challenges based on an understanding of the Hitachi Group's directions. As the corporate university responsible for talent development, we have put in place an environment where employees can acquire the knowledge and skills that they need at any given time. It has also become extremely important to provide employees with the opportunity to experience project simulations where they can apply what they have learned.
Furuya I agree that experience and opportunity are essential in changing competency and mindsets. As work descriptions change, the important thing is resiliency in the face of ambiguity. This means being able to accept uncertainty, and it is a skill that is required of all talent in any generation. Another important thing is not putting too much emphasis on "consistency." In Japan, consistency is often equated with sincerity, and in interviews, the company might ask you to talk about experiences going as far back as junior high school, but there is no need to talk about your career as a single unwavering story. Rather, the company should accept the fact that an individual is formed by a variety of ideas and experiences. The important thing is the ability to put into words what you want to experience right now, yourself, in this moment.

In terms of opportunities, you need to have a learning community. The results of international surveys indicate that Japanese adults lack learning, and one possible reason for this is that when Japanese people study, they often study alone, in isolation. To learn effectively, you need a community that learns together, in friendly competition moving toward the same goal. I believe that without this community, it's very difficult to study autonomously through e-learning. If self-directed learning is to succeed, it must begin with "heteronomous" learning; that is, learning influenced by outside forces. In other words, it's better to start with everyone participating together.
Magome That's a very helpful way of looking at it. You can acquire knowledge through books or e-learning, but that understanding is only based on that individual's perspective, so you can achieve deeper learning when you incorporate the perspectives of others.

You learn new things every day through your work, so if you are working in an environment where you can learn by watching how other people do things, then you can grow naturally as part of the company, and that makes the organization stronger. The goal of the Hitachi Academy is to make the Hitachi Group as a whole a strong organization, and our mission is not only to provide training, but to provide an environment where employees can grow. Of course, that environment includes tools, but it also includes activities to increase employees' awareness.
Furuya I agree. 100 years ago, innovations meant providing an environment where employees could learn organizational culture and work skills at the same time, but now, we need to change that approach. At one time, it was mainly men who went out to work and women took care of the household, so men could go away to attend overnight training or employee trips on their days off, but now, not everyone can participate in these company events on their days off. For many employees, the company is not the top priority in their lives.

There are five critical decision-making events during a person's working life. I call them the five major "life-career events." They are:

-Retirement
-Second jobs
-Relearning
-Long-term care
-The birth of a child

There is more than a 70% probability that you will face one of these life events while you are in your 20s, and many people are forced to make a major decision. When the number of choices increases and the time between these major events decreases, it creates a fundamental problem: Can the company provide enough growth opportunities to lead the employee to choose the company?
Magome Training is being fundamentally re-examined, based on the diversification of careers. In the past, entry-level hires spent a few months in training after they joined the company, and then continued to learn for the next two years through on-the-job training and other means. They would also undergo regular training for the next 5 to 6 years as part of their development. Moving forward, we are thinking about creating an environment where entry-level hires can learn what they need when they need it, along with opportunities for them to take on challenges and apply what they have learned.
Furuya The perspective of "creating opportunities" is extremely important. On-the-job training is left up to the front-line manager, but you have to maintain a perspective of the company creating these opportunities, without placing too much responsibility on the shoulders of the manager.

Evolving new employee training to create innovation in talent development

Globalization as a form of diversity

Magome I'd also like to hear your thoughts on the globalization of the workplace. It's becoming increasingly important to create opportunities for mutual understanding by having Japanese employees work with people from different cultures.
Furuya If you are going to have diverse people working together in one place, you need to have a clearly defined goal as a grand theme. I suppose deciding on this goal is the first mission. The important thing is to have this shared goal that involves diversity, and a concept of "united in diversity," which is integrated and inclusive.
Magome In the past, the Hitachi Group was comprised mainly of men with the same cultural background - Japan - but then the proportion of women in the company increased, and we now have various generations and non-Japanese with diverse values. Globalization is an extension of diversity, and it is becoming increasingly important to know and understand each individual's values.
Furuya I totally agree. Applying new ideas to rebuild the community that forms the foundations within the company ties into learning and career autonomy, and also ties into developing and the creation of organizations in various cultures.
Magome When employees change, the work environment also needs to change. We are changing systems and rules, but awareness reforms among the employees who have worked here for many years are also important. We need ways to effectively bring the organization together, and we are currently in a period of transition.
Furuya What we need is dialog. Both global talent and young talent can be understood by talking rather than through preconceptions. Companies need to build organizations that support dialog. One company created the position of Career Development Manager, a dedicated development management position for overseas branches. Breaking down and supporting management tasks like this is one way of doing things, but we don't really know what the right answer is, so moving forward requires a process of trial and error. The Hitachi Group's talent development activities represent a trial and error process that is important for Japan and the world.