EP64: Incredible Consulting Group - Tackling Recruitment in Japan

All-In Recruitment is a podcast by Manatal focusing on all things related to the recruitment industry’s missions and trends. Join us in our weekly conversations with leaders in the recruitment space and learn their best practices to transform the way you hire.

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This transcript has been edited for clarity.

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Lydia: Welcome to the All-In Recruitment podcasts by Manatal, where we explore best practices, learnings, and trends with leaders in the recruitment space. If you like our content, please subscribe to our channels on YouTube and Spotify to stay tuned to our weekly episodes.

I'm your host, Lydia, and with us today is Howard “Ichiro” Lim of Incredible Consulting Group. Thank you for joining us, Howard.

Howard: Thank you so much for having me on the show. Really appreciate it.

The Birth of Incredible Consulting

Lydia: So, what's the story behind Incredible Consulting?

Howard: Let me give you a brief history of it. I used to work in tech for companies like Oracle and other internet companies around the San Francisco Bay Area. I had some friends who were doing recruitment for technology. That was post the internet bubble, unfortunately coinciding with the World Trade Center attack. A lot of people lost their jobs, but my colleagues and friends doing recruitment said, ‘Hey, you’re good with people and sales. Want to try it?’ So, I gave it a try and found out that I really liked it. Fast forward to now, I moved over to Japan due to some familial connections there. I joined a recruitment company for about a year or so and then branched off on my own to create Incredible Consulting. Now we’re almost hitting the 20-year mark at doing this.

Lydia: So, what areas do you specialize in?

Howard: The main focus is on placing Japanese bilingual tech and manufacturing professionals in Japan with primarily US-based companies. So, you go to TechCrunch, or all these companies that are listed there, or around the Silicon Valley or anywhere in the US, they most likely will have operations in Japan and Asia. So, what we're doing is fulfilling the need for bilingual talent. Generally speaking, they have to be fluent in Japanese and fluent in English and also have the qualifications for the position or job that the company is seeking for.

Cultural Factors and Challenges of Recruitment in Japan

Lydia: What led you to specialize in recruitment in Japan, and also the greater part of Asia? What nuances and maybe cultural factors that you found to be most important in this region?

Howard: Coming from my own family background, I was born in Japan and moved to the US when I was five, and then I always wanted to come back to the country and work in some capacity with Japan. And so I saw a need to bridge the cultural differences between the countries and also to assist US companies in finding the right talent. Because beyond what's on the resume and the language skill set, there's a whole other area in which you need to focus on in order for companies to really identify the right talent to bring onto their companies and have them have a successful career. At the same time increasing the profitability of these companies in Japan.

Lydia: So, what are some challenges that you might have faced moving from San Francisco and to Japan, particularly Tokyo, where you are? And what are some of the challenges or barriers that you may face in terms of finding the right kind of candidate for tech companies based in the US?

Howard: Thanks for the very good question. I think first, there’s the understanding of the culture. Let me use the example of a senior VP of sales. He or she is looking for, perhaps, a sales director or VP of sales in all these different countries. And so, they have the initial requirements of them obviously being able to speak English, but then they have to have a certain kind of sales acumen and certain record that they have.

In addition to that, there’s sometimes a cultural misunderstanding between a lot of the US-based companies and the different regions in which they’re doing business. Sometimes there’s a tendency for the US-based senior executives to assume that the way that they’re doing business in the US is the model that they would use in different countries.

That certainly has been the case in Japan, in which there have been missed hires or people have passed up on a lot of good candidates because they didn’t meet their criteria of, ‘Okay, he or she doesn’t fit this kind of US paradigm or this US model of how I envision this person would be.’ So there’s a big challenge or barrier in that. And I would say that would be kind of the number one factor.

The second factor, of course, is a language barrier because you’re not going to see a lot of people being able to speak English fluently or being able to converse with someone regionally in Singapore or at the HQ or head office in the US. So that’s the second major challenge in trying to find and source candidates.

And then, of course, the third factor I wanted to cover is time. Because the way business is done in Japan is a lot longer, it can go anywhere from the decision-making process to the sales cycle. You would double or triple the typical time it takes in the US. That’s the timeframe you’re looking at in Japan. So, I would say those are the three main challenges you face in terms of recruiting or finding candidates in Japan.

Lydia: And finding candidates in Japan itself perhaps has its own unique challenges compared to San Francisco or any part of the US. So, in terms of sourcing, in terms of locating these candidates, what might be some observations that you've made?

Howard: Everyone knows what LinkedIn is about. It’s the global business networking social network in the world. But in Japan, they have specific ones that are typically not in English. It’s only in Japanese. And so there are a couple of those sites. They have ZoomInfo, which I’m sure you’re familiar with, right? And databases like that. They have those for the Japanese market that you can access and contact people. But generally speaking, it’s more of a traditional meeting face-to-face either at events or through personal networks. It’s a grassroots effort. So, if you want to find the right candidate, it’s a longer process, and it’s still very much a person-to-person type of networking type of market.

Lydia: What are some strategies that you use to help your clients overcome these barriers and connect with the candidates?

Howard: You have to go out meet people, and then add them to your database. I think, to an extent, having them in an email newsletter that you don’t spam the people with, but you keep them on once a month or so just update the candidates regularly on any new changes in the market, what’s going on in hiring and also any new jobs. I think that’s effective because they’ve given their consent to be on the list.

And at the same time, you’re providing value to them in terms of disseminating information. Definitely keep in touch with your candidates. And constantly source it because I think sourcing is triple or quadruple times as hard in the Japan market than it is in other markets. So that being said, it’s a lot more competitive where if you find a good candidate, for example, let’s say you had a senior sales VP at Microsoft or someone applying to Microsoft, that same candidate will undoubtedly have five to 10 other companies that she or he is interviewing with. And out of those five to 10, they may be closing in an office on three to five. So, it is ultra-competitive compared to the US. It is so competitive to find and locate and so you need to keep an eye always. Keep in touch with your candidates. Otherwise, you will definitely lose them.

Starting a Recruitment Agency in Japan

Lydia: You've also set up your operations in Japan and as you said, doing business can can take some time, right? So, what goes into starting a recruitment agency in Japan?

Howard: First, it’s a very arduous legal process. You have to apply to the Tokyo Labour Board and then you have to gather a lot of documents. You have to have proof of your company bank account, proof of a formal office space that has to have X amount of square meters. You have to gather all this documentation and payments, and then you have to have the people from the Tokyo Labour Bureau come and visit your office. This whole process takes about six months.

A lot of global recruitment companies, like Robert Half or others of that scale, see Japan as a lucrative gateway to Asia. The fees that they charge in Japan can be anywhere in excess of 30 to 40%, or higher. However, the time required to acquire these licenses is significant, and every year, you have to submit documentation and attend seminars. It’s an ongoing and difficult process.

Many companies don’t want to deal with it, even though the fees are very high and there is potential to make a lot of money. It’s too much of a hassle. So about 1/3 of global companies, say a UK recruitment company or similar, will not set up shop in Japan just because managing all these processes takes too long. They’ll try to work with a partner instead.

Compared to the US, where it’s very quick (24 hours or less) to set up shop, in Japan there are many barriers to entry for setting up a business. I’m not too familiar with other markets, with the exception of Hong Kong and other regions, but I know that in Japan there are many barriers to entry for setting up a business.

Lydia: Now, in terms of the current job market, or the trends that you've seen in Japan, are there any insights you'd like to share? How has the landscape evolved over the last few years or even during the course of your operations in Tokyo?

Howard: About 100 companies decide to come over here, and I would say that 50%, or more, will close shop in Japan within the first year or so. They want to take their forays into Japan, but they find out they’re not succeeding. That could be due to the sales process; they’re not seeing the revenue in line with what they had expected. The other 50% will organically grow. But they have to understand that Japan is a slower market. So it’s a process; they have to commit to two to five years or longer.

Companies that have the foresight or the understanding that the process takes longer will have a higher chance of success. For example, Amazon, when they first came to Japan, was a very small shop and they didn’t succeed initially. Now, they’re huge here. Not just in their consumer unit but also their AWS, their cloud business. Amazon Web Services business is extremely large and successful only because they knew that it would take longer and they decided to commit to that. But it’s not like, “I’m going to open a shop and then I’m going to succeed and make a lot of money.” Companies need to understand this.

Honesty: The Best Policy As A Recruiter

Lydia: Let’s move over to tech candidates. Competition for skilled tech candidates is so fierce now. The interview process itself becomes a key area of focus. So, what are some factors that recruiters should consider when they design an effective interview process, especially for those in tech?

Howard: I think as a recruiter, it’s your responsibility to have a good relationship with the hiring manager or hiring team for whom the candidate is interviewing. Beyond that, you need to understand the personality and what those hiring managers are looking for. So, your job is to be able to convey that to the candidate and to say, “Hey, Candidate A, this is the interview style of this hiring manager. They expect this and that. I think that if you hit on these points, you will have a higher chance of success in this interview.” You should also outline what the reporting structure would be for this particular position.

You need to relay the company culture, honestly, because some recruiters are there just to make a placement, but that’s not our job. Our job is to honestly say, “What is the employee satisfaction at this company? What is the company culture? What can I expect in my first six months to a year?” All these need to be conveyed to the candidate in order for them to be successful.

Now, if we’re talking about a more technical interview, you need to be able to prep them on what types of technology they need to be familiar with in order to succeed at the technical interview. But typically, when they interview with US firms in Japan, it’s not just the Japanese managers or hiring people; it’s regional. So, they will interview with someone in the US, they will interview with someone in Singapore, they will interview with someone in Europe. They need to be aware of that, and you need to be able to educate and convey that to the candidate.

Lydia: What are the most sought after skills and qualities that employers in Japan are currently looking for in candidates? I also understand that employers are possibly not from Japan. Or do you also have clients who are based in Japanese companies?

Howard: Yeah, for example, if they’re interviewing with Microsoft, Salesforce, or Costco, even though they’re in Japan, they typically have interviews with these companies here, right? All over the region. Now, if you’re talking about Japanese companies, we do the reverse for that in the US. A company like Canon or Olympus, a global company, medical device or camera company that are looking for candidates, because we understand what the HQ is typically looking for and we also understand the Western or the other offices or the people in those areas, we can definitely help or assist candidates in succeeding with the interview.

I think you made a really good point because this isn’t just specific to Japan. But I think the market, in general, is so competitive for talent that the recruiter has a really important role because they not only have to provide the candidate with information but also manage them. They’re essentially a project manager because they need to manage the interview process and its length. The longer a candidate is in the interview process, the higher the chance that candidate may go to another company or may become disinterested in the position because it’s just taking too long. Right? That’s a big problem I’m seeing is the length of interviews. It definitely needs to be cut down in a lot of cases.

It’s All About Timing

Lydia: How do you advise them or consult with them to make sure that they understand timing is relative to really where you're hiring?

Howard: That’s a very good question. You have to get on the phone with them and tell them, “This is the market. The opportunity cost of you losing this candidate is missing another quarter of several million dollars. The more you’re losing these top-level candidates and they’re going to competitors, the more you’re losing that potential revenue or technical talent for your company.”

You need to convey that. You need to get on the phone and tell them because if they’re not realizing it after several introductions or working with that client for three to six months or longer, they’re probably never going to get it.

Essentially, what that does is, it moves that client from the recruiting company’s main priority to the second, third, or fourth priority. If the candidates we have are not interested, then we may introduce them to you because as a recruiter, you don’t want to lose face with the candidate. If it’s a really good candidate, you’re going to be in contact with them for several years or more. If you’re not able to successfully move forward with the process or introduce them to an opportunity or ensure the process is seamless, they’re going to lose interest in you and your ability to do recruitment.

This definitely needs to be conveyed over the phone or face-to-face. You need to tell the director or hiring people directly what’s going on with the length of the interview process.

Lydia: Coming back to business etiquette or the time it takes and practices, Japan and many other Asian countries have their own distinct business etiquette and practices, right? So, how do you go about preparing candidates to navigate these differences and perhaps even succeed in their roles?

Howard: I think if they’re Japanese candidates, or they’ve been in Japan, they’re most likely very well aware of the way that Japanese etiquette is, or the way they do practices. I think that the challenge here is getting them prepped for interviews with overseas managers or people in the US, or Syria, or wherever. Because even though they may be able to speak the language, it’s a different thing to be able to speak and then to actually converse or get into a conversation with someone from there, who lives there, who’s brought up there.

So, I think that part of our job, or the main thing, is to be able to get the candidates into the mindset of, “Okay, they’re from Australia, they’re from the US, this is how they communicate.” Beyond your English ability, they want more directness because Japan has a tendency to be very humble. It’s a very polite culture. There’s a saying that, “The nail that sticks up gets hammered down.” That’s a saying in Japanese culture, so it’s very conformed. It’s all about conformity, the group and not sticking out, not being individual.

But when they’re interviewing with someone from Australia or the US, or somewhere else, that doesn’t work. Those people don’t want to see that. They want to see more individuality. They want to see more directness like, “Okay, this is about me,” being able to talk about yourself and what you’re able to do. So, I think that the candidates from Japan need to be more educated or learn more about these cultural nuances of communication.

How Japanese Government Keeping Tabs On What’s Going On

Lydia: Intercultural communication, and recruiters also, I believe, would have a part to play in understanding both sides. So that the advice or the counsel that you gave on both sides would really make that process smoother and allow the interview or the whole hiring process to succeed.

Moving on to government regulations and policies, you’ve already spoken about this, these will definitely impact recruitment and the time it takes for the success level with clients, right? We’ve seen tremendous amounts of disruption in the past.

So, how do you stay up to date with the evolving landscape in Japan and other Asian countries to ensure compliance with candidates and also your clients?

Howard: Japan is a very organized and government-regulated society. So, there are some pros and cons, and I think the pros are that once you get your license registered, you are required to go to seminars regularly. You have to send in reports to the Tokyo Labour Office at least twice a year on the conduct of your business. They also send pamphlets and materials on what’s going on with the labor industry.

I think that Japan, in that sense, does a very good job of keeping tabs on what’s going on from a legal or regulation standpoint for recruitment in Japan. So beyond that, I wouldn’t say it’s a stressed part. I think the government, whatever your license or regulatory body is, whether it’s the Financial Services Agency or whatever body it is, they do a good job of being able to contact the people that are registered with them or involved in that line of business.

Streamlining the Hiring Process with AI and Technology

Lydia: Moving into process operations. How do you streamline your recruitment process and maybe look into your talent sourcing capabilities as we talked about earlier?

Howard: I think it’s important to have a CRM process in place and to be able to integrate that with communication tools like Slack. And being able to, if you’re using LinkedIn, or you have a website where you publish jobs on a job board and having that linked directly to your CRM. I think that’s important. Because in order to be successful, as you may know, in recruitment, you have to be organized. And that’s really important.

So, knowing what the process is, from the time that someone applies to the first point of contact, whether that’s through a web application, whether that’s direct sourcing of the recruitment, contacting the candidate directly, whatever that whole system, process and workflow should be recorded and should be streamlined.

So if there is, for example, a resume comes to the job board, it goes directly to your CRM, the recruiters are notified that the applicant has applied to the job. The recruiter should be able to reach out to that applicant directly and then enter notes on the steps that they have gone through with that candidate.

Also, through resume submission to the client, and keeping tabs on that whole process is vital. I think that in recruitment, if you don’t follow this process, you’re potentially losing 10 to 20% or more of potential revenue by not having a systemized workflow. So, regarding the question, I think it’s very important. Whatever CRM you’re using, whatever process you have is to have that documented in a Google Doc and have your recruiters follow that process. Otherwise, you’re losing potential revenue and you need to systematize your recruitment business.

Lydia: So, what are your thoughts on the impact of AI? Have you seen any sort of benefit? Or have you tried to improve your processes with AI?

Howard: Yes, definitely. We use AI a lot. In recruitment cases, the way we use it in recruitment is we will enter someone’s resume, for example, into ChatGPT and say, “Hey, ChatGPT, based on this resume that I just entered, what are some potential titles and potential positions that this candidate may be good for in the Japan region?” And you’d be amazed, it will spit out five to ten potential positions and the accuracy and the kind of intelligence in which you’re able as a recruiter to call into, maybe use this in your recruitment activities is amazing.

I think that the danger is completely relying on everything that the tool spits out to you as the right answer. I think that whether you’re doing content marketing or recruiting whatever you need to, first you need to reword it in your own words. And secondly, you need to do your due diligence and carefully go over the document or whatever the answer is and use your own words or go into further study. Because I would say about 50-60%, or slightly higher, of what it spits back to you is usable stuff, but the other stuff is something I wouldn’t recommend using. So, it’s a very effective tool, it cuts down on a lot of time and processes, but you can’t just enter it and then just spit it out.

Read Blogs and Watch Videos To Build Necessary Skills

Lydia: That also means that the role of the recruiter or talent acquisition professional for instance, would evolve and would probably be elevated in this instance. So, what do you think recruiters should have? Or what sort of skills should they build for themselves, especially in this kind of environment or this kind of technological revolution as we've seen?

Howard: They definitely need to look at a lot of blogs that are related to recruitment. They need to understand what prompt engineering is. There are a lot of YouTube videos and OpenAI has their own documentation on what prompt engineering is, and then there are books and articles on that.

So, if you don’t understand prompt engineering, or how to warm up ChatGPT, like saying, “Hey, I’m a recruiter for a Fortune 500 company,” if you just enter, “Find me a job,” or these not so high-level semantics into ChatGPT, you’re not going to get as effective answer as if you do that by understanding how to prompt or how to work with ChatGPT in a recruitment sense. I think recruiters definitely need to understand what prompt engineering is. They need to constantly see what’s out there in the recruiting world and how people are using the tools.

Lydia: So, what advice would you give someone who started out in recruitment today, Howard?

Howard: They need to join an agency first, at least for six months to a year or longer. Because they need to understand how recruitment work and the only way you do that is by joining a big agency. After that, you can choose to leave, which I did, or you could choose to stay. But essentially, you'll learn how recruitment works, you'll learn about sales, you'll learn about how to interact with candidates, you'll learn about business development processes, how to build your network of potential clients, and to reach out to make business and all the recruitment as a business or as a trade you learned from working at a recruitment company. But after that, I think that you can do it on your own if you're driven and if that's what you want to do.

Lydia: Those are interesting insights and definitely useful to know. You get your base and you get new exposure as much as possible in a recruitment agency. Then you move on to maybe in-house or even your own, and then be able to apply those skills.

Sales being a particularly important key element here because everything is pitching to yourself to learn and then to pitch to your candidates and clients. Thank you very much, Howard, for your time and your insights. It’s been a great pleasure having you and it’s really interesting to understand how business has been run, particularly recruitment in Japan. So, drop us your contact details. How can the viewers connect with you and pick up the conversation later?

Howard: Sure, they can contact me through my LinkedIn at Howard “Ichiro” Lim. I'm also on social networks like Instagram, TikTok, as I'm just kind of started now, blasting video content really quickly. You have to do content, managing content. I mean, social media nowadays, whether you're doing recruitment, real estate, or whatever, if they don't know you, they don't know you. In order to compete in this day and age, you have to do social marketing, just like this podcast.

Lydia: I'm looking forward to seeing your TikToks and your Instagram videos. I mean, that's where the visual element kicks in. It's not always what’s written, right? And just kind of generational crossovers that we need to do for personal brand and everything. Thank you so much.

Howard: Thank you very much.

Lydia: And we have been in conversation with Howard “Ichiro” Lim of Incredible Consulting Group. Thank you for joining us this week. Remember to subscribe to our channel. Stay tuned for more insights from all in recruitment.