Japanese automakers face shortage of technology talent and salary levels

According to foreign media reports, headhunting firm Casey Abel has spent four months looking for data center architects for a Japanese automaker, but IT professionals have almost all chosen high-paying foreign e-commerce companies. During the talent search, Casey Abel met with the automaker client five times, and the automaker's senior management even attended one of the meetings, which shows that the automaker attaches great importance to technology talents.

Toyota, Honda and Nissan are working to expand their gains in areas such as car-sharing and automotive cloud computing, so attracting information technology professionals is becoming increasingly important for these companies. Nissan CEO Carlos Ghosn pointed out that if Japanese automakers lose the "global talent war" to new entrants such as Uber and Tesla, the consequences will be disastrous.

“To do these complex things, you have to have great talent,” said Jeremy Carlson, an analyst at IHS Markit, a consultancy that specializes in autonomous driving. “Japan’s population is highly educated, but a lot of the capable and motivated people are going to places like Silicon Valley.”

Shortage of tech talent

According to Manpower's annual market report, Japan has been the country with the most severe talent shortage in the world since 2010, and IT professionals are one of the three major talent shortages in Japan. According to a survey by the Ministry of Economy, Trade and Industry of Japan, there was a shortage of about 171,000 IT employees in Japan in 2016, and this number will expand to 789,000 by 2030.

The competition for talent is still intensifying. Many Japanese automakers are imitating the models of Ford and General Motors. In 2012, Ford established a scientific laboratory in Silicon Valley to develop software. Since 2013, General Motors has established two data centers to make product development, production, marketing, sales and Internet services more rational.

In October, Nissan revealed plans to hire 150 engineers in Tokyo by 2018, covering software, cloud computing, data analysis and machine learning. Honda will start operating an artificial intelligence and IT research and development center in Tokyo next year. Just last week, Volkswagen Group said it plans to hire more than 1,000 IT experts from high-tech, gaming and high-end research centers in the next three years.

Last month, Toyota unveiled its smart connected car plans, which include a large data center that will use owner data to create new businesses, such as adjusting insurance policies based on driving habits, and hired U.S. defense scientist Gill Pratt to lead a new AI design organization in the United States.

Japanese car companies have less competitive salary levels

“There is a big gap in salary between recruiters and applicants,” said Abel, general manager of HCCR KK recruitment company. “Many engineers earn 20 million yen ($170,000) a year, while many companies’ traditional salary structure only offers 7 million to 9 million yen a year.”

Abel said that because car companies need the same talent as banks, technology companies or other industries, Japanese car companies need to offer higher-end salary levels to be more attractive. Japanese car companies have always had strict financial budgets and have generally had low business profits recently. In addition, Japanese companies have always lacked domestic professional talent and are considered to be more "sophisticated and slow-moving" than technology startups, which makes it more difficult for Japanese car companies to recruit.

Honda said it would adjust the salary system of the new laboratory in Tokyo. Yoshiyuki Matsumoto, head of Honda's R&D, pointed out that Honda's new laboratory in Tokyo will adopt a more flexible work and salary system, rather than the rigid and seniority-based salary system implemented everywhere in its group. Nissan declined to comment specifically on the salary of its Tokyo data center.

In response to the increasingly fierce competition for talent in Japan, Toyota established the Toyota Connected Data Department and AI Design Center in Plano, Texas in April this year. The department will jointly develop data management and services for its global business with Microsoft, including connected car technology that is easy for people to use. The company spokesperson said the business unit will offer a very competitive salary level.

In addition to uncompetitive salaries, the design cycle of automotive products is another important reason why tech talents ultimately do not choose the automotive industry. Mandali Khalesi, Asia Pacific director of Here, an electronic map provider, pointed out that for programmers who can develop a system in a few weeks, the several-year design cycle of automobiles is very frustrating. "Professionals with an IT background don't seem to be used to such a long cycle."

Nissan intends to reverse the current talent shortage. It has set up an Internet department with 150 people in Tokyo and firmly believes that the Japanese attitude of loyalty to work can beat Silicon Valley. According to a survey, half of Japanese IT experts have never changed jobs, while the proportion of American and Chinese IT experts changing jobs is 14% and 21% respectively.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.