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Employers are revising their hiring strategies due to questions on the sustainability of Japan’s market recovery, according to the 2013 Robert Walters Half-year Market Update. While business transactions increased in 2013 as a result of the ‘Abenomics’ fiscal strategy, employers prepared for unexpected changes by hiring contract workers and utilising external vendors to avoid the over-recruitment of permanent staff.
During Q1 and Q2 2013, the number of equity transactions rose in the financial sector. Banks and financial firms managed this growth in activity by adding contractors with operations experience, in order to more easily adjust to market conditions. Compliance experience was another area in demand with employers primarily recruiting contractors on a per-project basis to assist with implementing legislation; including the Foreign Account Tax Compliance Act (FATCA). The limited number of skilled contractors active in the market resulted in contract rates in these areas rising by 5-10% as competition for workers intensified.
Pharmaceutical companies were also cautious regarding long-term business prospects. To control costs, multinational firms in Tokyo and Osaka expanded their use of research outsourcing vendors to reduce the cost of in-house drug development. The increase in hiring by contract research organisations (CROs) created new and replacement hiring demand for clinical research associates at the junior and mid-levels.
Natasha Brooks, director of Robert Walters contract division said: "While the positive sentiment created a noticeable increase in recruitment, many employers are worried about over hiring permanent staff in case market conditions change. So in order to handle the needs for immediate projects or day-to-day operations, employers across many industries are increasingly turning to contract professionals to maintain flexible headcount."
For the second half of 2013, Robert Walters predicts that recruitment volumes will remain high in the commercial and industrial sectors. The use of contracting professionals is expected to grow in H2 2013, as companies continue to recognise the benefits of maintaining flexible headcount and fixed term additional resources.