A group of international employees wearing masks gazes at the camera

In 2019, foreign workers in Japan topped 1.66 million, a dramatic 13.6% increase over 2018 and a near tripling from 2009. These employees are not simply stop-gap measures against the shrinking labor market. Roughly 20% are college graduates holding down white-collar jobs that often require fluent Japanese and represent many companies’ hopes of attracting the best worldwide talent.

Unfortunately, the ideals of hiring international employees do not always translate into reality. According to recent academic studies, international employees are more likely to feel unsatisfied at work, struggle with work-life balance, and ultimately leave the firm. As a result, many Japanese companies have become more cautious and hesitant about hiring foreign employees.

While it’s true that Japanese workplace practices like nemawashi (a consensus-building strategy that tends to take time) may frustrate new arrivals to Japan, most international employees hired by major Japanese corporations speak fluent Japanese or hold degrees from local universities. Moreover, many practices historically associated with Japanese workplaces have been toned down, retooled, or even abandoned as firms seek to become more efficient and global. Cultural differences remain, and they can be difficult, but they are not primarily to blame for dissatisfaction and high turnover.

The true culprit behind demotivated and under-leveraged international employees is a lack of strategy.

But don’t mistake a lack of strategy for a lack of faith. Virtually all the HR professionals, CEOs, and senior managers I’ve spoken to fervently believe foreign employees can bring unique skills and capabilities to their firms, even without concrete plans for developing and leveraging these traits. I’ve had similar discussions with foreign employees: they know they bring distinct knowledge and experience to the table, but often lack a clear goal. Both parties want the same thing, but aren’t sure how to get there.

This is where the need for strategy comes in.

Contrary to popular belief both in Japan and abroad, the only way to reap the benefits of diversity is with a clear and proactive strategy, backed up by organizational processes and clear communication. Leaders who increase workplace diversity and expect the magic to subsequently unfold will find themselves rudely awoken by lower team efficiency and increased inter-organizational conflict. Here are three steps to avoid that.

Step 1: Set clear goals to recruit the right talent for the right job.

Senior managers and CEOs shouldn’t just hire more foreigners on a whim. If firms want foreign employees to globalize their company, they need to identify specific business areas those employees can leverage their unique skills.

Consider “Bianca,” who worked for a major consumer goods company. She was hired because the newly appointed head of marketing “kind of felt we should become more global and hire a foreigner.” Exactly why and how Bianca (as a foreigner) was going to make the company more global was never explained.

In another case, a man—we’ll call him Lee—was headhunted by the president of a large retailer straight out of graduate school. He was placed in the company’s international division among two hundred other employees and encouraged to “globalize” the firm by using only English with his colleagues. No one spoke to him until he began using his Japanese.

Bianca and Lee’s experiences highlight that companies sometimes believe foreign presence alone will globalize the firm. Unfortunately, that’s not how things work. The most satisfied and successful foreign employees work for companies that match their specific skill sets and capabilities to a strategic need. This may be dealing with foreign customers or working at a foreign subsidiary, but it can also include functions that have nothing to do with global business. Many foreign engineers, for example, play key roles in the R&D departments of Japanese technology firms.

Have clear goals for your foreign employees, and use those goals to recruit the right talent for the right job.

Step 2: Embrace special treatment to leverage special talent.

If companies want to leverage foreign employees, they should avoid molding them into typical salarymen and salarywomen and instead focus on developing their unique skills. Believe it or not, this means giving international employees special treatment (in Japanese, tokubetsu atsukai).

Understandably, many Japanese firms begin by placing foreign hires into a training program alongside other local hires. While these programs excel at fostering loyalty and shared organizational identity, they are less proficient at cultivating unique skills and talents. International employees can feel lost and under-appreciated, or even resentful. One woman told me her company’s system completely ignored her decade of work experience, and that her focus now was to “avoid becoming Japanese.”

Different treatment for foreign workers is often seen as unfair and counterproductive to the collective spirit of Japanese workplaces, but foreign employees are different. And the special treatment doesn’t mean extra pay or perks. It means support in areas that foreign employees may find more challenging (e.g., language classes or help with filling in company documents), as well as tailor-made development programs.

A positive example of tokubetsu atsukai is “John,” an MBA graduate employed by a large multinational Japanese industry conglomerate. Upon joining the company, John was given six months to study Japanese in order to pass the highest level of the Japanese Language Proficiency Test. He was then assigned to a general department with a mentor and given assignments and challenges tailored to his linguistic and cultural skillset. All of this allowed John to focus on leveraging his unique skills and capabilities, while still fitting into the organization.

Step 3: Communicate and get buy-in.

Organizations must clearly explain the benefits of hiring foreign employees and involve immediate managers in designing appropriate training and development programs.

International employees are often sponsored by higher-level managers who see them as potential assets to the firm. While such sponsorship is important, international employees struggle when their immediate superiors are not involved in their selection or hiring. Managers will only devote the extra training and effort to support foreign employees if they understand what to do with them and how they add value.

Communication and buy-in must also be directed at the international employees themselves. In many cases, foreigners feel adrift in organizations. To overcome this, companies must clearly communicate their strategy from day one. Employees should know why they were hired, what the company’s expectations are, and what future career trajectories they have to look forward to.

Like all employees, international employees join Japanese companies because they want to work at them. By having a clear strategy, backing it up with tailored support, and communicating clearly, companies can ensure they stay and add value for the organization.

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