Accounting, payroll, HR, and admin outsourcing services for your Japanese subsidiary - HTM Tokyo
HTM case studies in Japan
Strategically Using Expatriates Returns Success

This client is a large electronic component manufacturer. One issue that invariably surfaces with subsidiaries in Japan is whether the company needs (or can afford with the high cost of living in Japan) to have expatriates in Japan; and if so, how they should be compensated. This company had a policy of no expatriates at any foreign offices and had been successful in Japan for over 20 years. But over the past three years, it found that it was beginning to lose market share to domestic competitors, and profits had dried up.

This situation created a need for very responsive communication between the home office and the Japanese office. HTM's analysis showed that this communication was not working. It was not allowing the Japanese office to create new product sales opportunities or to be responsive resolving problems in both sales and service areas. Due to poor communications business was being lost. Products could not be differentiated, which in turn forced the company to discount prices.

HTM put together a comprehensive program to solve these problems. One key to that solution was the need for expatriates with excellent technical and communication skills to be based in Japan. Accepting this need was difficult for the company, as its policy for over 20 years was that its foreign subsidiaries were only staffed by nationals of that country.

The next major hurdle was determining the compensation for the expatriates. Expatriate compensation and benefit packages can range from giving the same package as Japanese nationals, to packages that provide a lifestyle far above what the employee enjoyed at home. HTM's approach is to define the social, financial, and professional needs of the expatriates and to use that definition to produce a fair and attractive compensation and benefit package. Such an approach brings transparency to the issue, making it supportable to other employees in the company It provides a sound basis for discussions with the expatriate employees, and is sustainable over the long term by both the company and the employee.

 

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