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Why Diversity, Inclusion and Engagement Are Critical to the Future of Work in Japan

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In Japan, female career development, reform of working practices and diversity have become popular trends. In September 2015, the Active Women’s Act was enacted, and in June 2018, a reform of working practices was enacted. On top of that, a number of other factors have also played into women's social advancement in Japan, including labour force declines (due to low birth rate and longevity), improvement of work consciousness (supported by the rising university advancement rate), and low economic growth (which has led to a decline in male income), as well as a steady increase in the number of female employers. As a result, it became clear that women's social advancement into society was inhibited by childbirth and childcare, but the so-called "M-curve" has improved in recent years — even though it has not yet lessened when compared to foreign countries.

However, the M-curve is reducing due to the spread of childcare leave systems and the development of childcare centres. Now, it is becoming more possible for women to continue to work, largely thanks to the increase in irregular employment of women. Women can choose low-income, non-regular work for specified reasons, such as: "can work in their own convenient time" or "easy to co-exist with family circumstances, such as housework, childcare and nursing". Moreover, in Japan, the percentage of women in executive officer and management positions is still low. Women’s employment is gradually progressing, but their professional duties remain in supporting roles, and they face many challenges in terms of career formation and development.

Hereafter, Japan will likely confront an unprecedented shortage of labour, along with a workforce decline. Therefore, it is a must for Japanese companies to secure not only women but also employees of all generations and various nationalities and promote their activities over the short and long term. Not only can diverse employees co-exist in the company or organization (diversity), each one should also be respected as a member of the organization and participate in organizational decision-making and activities (inclusion). This increases every employee’s willingness to contribute voluntarily and display their power (improvement in engagement), which can directly increase the competitiveness and productivity of an organization.

There are various initiatives in Japan to improve inclusion and engagement, but they are entangled together. Even if individual efforts are implemented, it’s often not possible to see the effects. In order to link these efforts together and reconstruct a company's competitiveness, we need to follow three steps: ① build trustworthy relationships, ② encourage time/location flexibility, ③ respect diversity and individuality.

①    Will it be helpful to build trustworthy relationships at work?

"Workplace" rather than "company" plays an important role in increasing inclusion and engagement in an individual. At the workplace, each and every employee can be oneself; in other words, they can freely express their thoughts, which allows for a sense of security and a trust to be heard — huge factors when it comes to promoting inclusion. This is similar to "psychological safety," which is the key to productivity improvement.

For example, various forms of open communication and information sharing or other efforts, such as visualization of work and role allotment at a workplace, should help in building a trustworthy relationship between an organization and its people. Also, building a trustworthy relationship is more important than anything — it brings out the ability and creativity of each and every employee, and this can lead to increasing the productivity of the entire team.

②    Do you want to improve flexibility?

In Japan, traditionally, organizational operation has been carried out by relying on employees who can accept the "3 unlimitedness” rule: the unlimitedness of job content, work location and working hours. However, in recent years, with the increase in employees who work while nursing or caring for children, the increase of dual-income households and the increase of employees who have health and mental problems, the number of employees who can accept this "3 unlimitedness" rule is decreasing.

When superiors speak of approving and promoting long working hours, employees who cannot deliver due to various circumstances feel that "I am not 100% permitted in this workplace," and it prevents them from displaying ability and creativity. Moreover, when information is shared only with people at the workplace, employees who work from home or remotely feel alienated.

Increasing the flexibility of when and where an individual works — and by promoting environment and work process improvement to increase participation awareness of employees who have various circumstances — can transform an organization into one that empowers everyone.

③    Have you included a point of view that respects diversity and individuality?

In the structure of employee management and personnel systems, we have redefined diverse needs of employees from a broad perspective to actively support the career and ability development, work-life balance, health, etc. of each individual.

i. For example, in some Western companies, so-called "no rating" has been introduced. Rather than linking evaluation results to numbers, evaluations aim to frequently give feedback, promote development and growth, and emphasize individuality of employees. In Japan, the idea of linking evaluation results to numbers is still strong, but more companies are looking to try out this new evaluation system to encourage the growth and career development of the individual employee.

ii. In terms of compensation, rewards don’t always need to be viewed monetarily. A reward should provide opportunities for career and ability development and encourage the display of creativity and ability of employees, which will increase engagement.

In handling measures to increase inclusion and engagement, it is extremely important to justify objective facts and data on the issues in your current organization, what they should be and which areas should be prioritized. Moreover, advanced management is required for future leaders who want to innovate. For inclusion and engagement efforts to be successful, the existence of inclusive leadership is also essential.

Moving forward, you should aim to construct trustworthy relationships between your employees and your organization and maintain an environment for working flexibly. You should also build a workforce on diversity and individuality; this is the largest safety net for individuals. In an organization like that, individuals will work on their own, with a high willingness to contribute. With such highly engaged employees, your company will become a stronger, more competitive and resilient organization.

This article was originally published on May. 2, 2019, for Voice On Growth, Author Rina Bando 

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