I just don’t get it.
Almost everyone seems to work through someone else, getting utterly shit wages as a result.
And outsourcing isn’t just outsourcing; there’s 派遣, 請負 and probably more.
Is it all so companies can get away with not paying 社会保険 and other sketchy stuff like that?
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You’ve guessed correctly.
I’d also add that contract-work and middlemen have a fairly long history in Japan, but their use as a way for companies to avoid doling out benefits is a problem that arose during and after industrialization.
These are just my paranoid theories, but in my experience as an amateur professional who gets paid to carry out certain activities:
1. Nobody knows what they are doing. Folks here get parachuted into a job role about which they know nothing. The solution is not to employ people who know what they’re doing, but rather to slap a -Manager job title on the poor sod, and pay what he should be getting paid to the company president’s brother-in-law’s services company. The employ’s job is to ensure that the shit flows downhill every time there’s a fuckup; bearing in mind that if the company president’s brother-in-law looks bad, then the company president looks bad, so it’s either a case of burying the dead body and hoping nobody witnessed the fuckup, or getting the hose again.
Case Study: My ex-Webmaster Colleague didn’t know anything about Webmastering, so offloaded the secret Japanese skunkworks corporate website onto the lowest bidder. Luckily, they knew all about security, so made sure it’s arse was hanging out of an FTP server on the public Internet, using the very latest PLAINTEXT password encoding systems, alphanumerics only.
2. Pass the buck. I suspect that my Country & Western colleagues do this too, because often the only benefit is to make things more complex than they ought to be. Basically, by outsourcing responsibility to someone else (who is hopefully not related to the company president), it means when there’s an inevitable fuckup, the employee responsible can pass the blame to the vendor, and look good while screaming rolling RRRRRRRs down the phone while doing it.
3. Fiendishly complex nepotism, or something. I think that sometimes it’s just the brother-in-law thing. As in, the companies simply buy services from each other, so that the money travels in a circle in order to avoid the tax man and keep it in the family. This’ll be one of the reasons why incestuous black companies end up not being able to pay their employees, as a side-effect of no new money entering the merry-go-round.
4. Burning off excess profit in order to avoid being reamed by the tax man.
Because of Japan’s strong labor laws it’s pretty much the only way companies can control their labor costs with changing market conditions.
We hire a lot of contractors because even with the agency fees it’s cheaper than keeping them on staff full time when the job we need them for is 4-12 months and when that’s done we might or might not need them.
Almost 40% of the workforce are irregular employees:)
Just like the turtles, Japan is middlemen all the way down….
Sometimes companies do it for expediency, it’s easier to hire a cleaning company to send janitorial staff to your building, rather than trying to hire a full or part time janitor on your own.
Sometimes I think it is some kind of tax dodge. My wife worked for an import-export company, but she was on paper working for one of the other companies the same rich guy owned, so her pay slips came from that company. Also, I used to work for a nationwide corporation that was split up into a bunch of smaller corporations that then sold stuff to each other before selling it to the end customers.
I often see company signs in bad English like, “XYZ Company, produce by ABC Company”. I feel like some small companies reinvent themselves on paper every few years to avoid some kinds of tax payments.
And don’t even get me started on holding companies. There are very good reasons for holding companies to exist, but using it as an overall name to be marketed above the already established brands just drives me bonkers. 7 and i Holdings is the most egregious example. Ito-Yokado, who owned 7-11, thought it would be a great idea to replace every 7-11 sign in Japan with a 7 and i Holdings sign, I can’t fathom the expense that went into this boneheaded move. Just tis week, my local Daiki home center rebranded itself as DCM, which is the name of their holding company…
There might be cultural factor at play, but strong labor law generally means that there are more demand for contractors.
When I was in France, I would get easily twice the salary of a normal employee. (even after taking into account the additional taxes I needed to pay)
Customer was happy because he could “fire” me when he wants, and I was happy because I was always finding other customers in the same situation.
Not doing it anymore, but I can easily put myself into the shoes of companies who do.
There might have another reason: Fragmenting your work through several company decrease the liability if something wrong happen. Imagine you are outsourcing some building construction: If the constructor get something wrong, you can sue, while if it is your own staff, you are fucked.
Another example: You are a manager in an IT company and need something to be done. If the project fails, you can reject responsibility on the outsourcing company. On the other hand if it’s caused by an employee you hired, you look bad. Given the risk aversion of managers here I would not be surprised if that’s the main reason.
You don’t realize the poor wages are by design.
A big company has a fixed pay scale. They can outsource the work to someone with a lower payscale, thereby saving money (this is also why Japanese companies have tons of subsidiaries).
In addition, sometimes you just need someone (or a team) quickly and it is super easy just to call up some vendors and issue a PO whereas going through the internal recruitment process would take months. We had a situation where we needed someone with a license to fulfill a government requirement – got it easily solved by just calling up vendors and issuing a PO (instead of months trying to find the person with that license).
I’ve worked as a recruiter for 11 years in Japan.
Basically one of the main reasons is that it is very very difficult to fire people in Japan for literally any reason. Employees are super protected by the labor board.
Therefore hiring contract based workers allows companies to simply not renew a contract for low performance.
If a company really wants to fire a full time employee they will basically just harass the employee and make his/her life as miserable as possible until they quit. I’ve literally known candidates that had an internal transfer to ….. clean the bathrooms and get coffee.
And it’s also a tactic that is used to keep salaries low in that they can just end one persons contract and rehire s a new joiner for the same role as opposed to having to give a full time worker yearly raises over a long period of time.
Exactly what u/bulldogdiver is saying.
That’s what you get when you give companies no flexibility to adjust their workforce.
Companies are incredibly reluctant to hire people or to raise wages because they can’t do anything to adjust downward anymore. Can’t let people go easily and can’t adjust wages downward easily either. That’s why they rather give a one time bonus payment instead of increasing the base.
Permanent employees are almost too well protected. You need to perform poorly for about 9-12 months and the companies needs to document everything, show that they did everything they could to then let you go hopefully if you agree. That isn’t healthy. It’s the opposite of the “hire and fire” mentality in the US where there’s seemingly little protection. Both extremes aren’t good.
– can’t fire people
– need to extract value (read: fuck over) from people by not providing benefits
– fiscal year is king here, often to the detriment of longer term planning. You get your budget/headcount for the year and you spend it even if it doesn’t make sense. But you don’t know if you have the same budget next year
– big corp is also king here and lot of them are old school. Running finite project as a cost item that generates some return instead of building up value and skills. (This is also partially why software is shit here – instead of properly bulding in-house software big corps outsource the website/app/etc to the lowest bidder in Ibaraki ot Hokkaido or something)
Are you from the US?
It’s pretty common there too.
nearly every contractor we had in my old office were either inept, did nothing, slept at their desks, and in one casewoke up daily with a puddle of drool in front of him. Absolute waste of money.
One outsource company we used for concept art had literally taken other peoples art from the internet. Even after telling my superior, they did nothing for fear of causing relationship problems with the company.
Think of formal employees in Japan as unioned, pensioned workers, and contractors in Japan as your average normal employee in America. There was a time where most workers are unioned and pensioned, but with the neoliberalist reforms in the 80s, those kind of roles are decreasing throughout the world.
The whole planet has become a race to the bottom. I’m sorry. It is hurting me too
Yeah, it’s pretty bad. Try get any construction work done or fixes, the people who do the work who are hired out are FUCKING TERRIBLE to an extreme… had nothing but problems with the most basic of shit.
派遣 and 契約社員 took off during the Koizumi administration. He basically regulated and reduced labor laws permitting 派遣 into non-specialised fields.
The last design company I worked for had 4 contemporary brands, each with two directors each. Every design was done by a contract designer / patterner. Absolutely everything despite all of the staff having gone to art / fashion college.
They wouldn’t let me draft a pattern, draw a design, do a CAD. EVEYTHING had to go through these random other people