Thursday, December 20, 2007


There have been many times during my business English telephone testing with students when the man on the other end has told me that he has been transferred to his current company from another company as a "consultant". Usually, it has been the case that the man's former company was a big name company like Toyota or NTT and he was working for a company of lesser fame and prestige. (Note: these companies are examples, not the ones my students have actually worked for.)

The curious thing about this situation has been that, when I ask these gentlemen when their stint as consultants will end and they'll return to their former company, they say that they will never return and that their assignment is permanent. After this, I usually ask something like, 'you no longer work for (big name company) then,' they say that, they do indeed still work for that company in addition to their current one.

My confusion results from the fact that, back home, consultants generally don't take up permanent posts at any one company. They either work freelance or they are contracted out on a temporary basis from an agency to spend some time at a succession of companies. For years, I just figured that this was a different way of doing business in Japan and that perhaps the two companies had some sort of joint business or that one company was a subsidiary of the other. In fact, with more advanced students, I've asked if one company was a child of a bigger parent and sometimes the students said that was the case and sometimes not.

Recently, I was enlightened about one aspect of this type of so-called "consultation" by a student who is an accountant. She told me that it's common practice for big corporations to fob off their dead wood to smaller companies as a way of getting rid of them to clear the way for younger, more driven, or more talented employees. The smaller companies accept these employees despite knowing they are being intentionally farmed out for lack of ability because they feel that even less capable employees of big name corporations can bring some "know how" with them and they desire the prestige that comes along with having a worker on staff from a blue chip company. The bigger companies do it (rather than firing such employees) as part of fulfilling their promise of "lifetime employment" in order to keep staff loyalty high.

The most fascinating aspect of all of this isn't that these choices are made but that there is a financial component which one might not anticipate. In order to encourage small and medium-size companies to take on these "consultants", the larger, more well-known company subsidizes the consultant's salary. My student said that it is often the case that about 1/3 of the employee's salary is paid by his former employer and 2/3 is covered by the new, smaller place. This allows both companies (from a certain perspective) to cut their costs while the employee gets the same salary. The big name company avoids keeping the dead wood in their offices as demoralizing "window tribe" (madogiwa-zoku) at full salary. The smaller company gets (what they hope is) an employee who has capabilities they can use at a reduced salary.

Unfortunately, at least in my student's company's case, these employees aren't always worth even 2/3 their salary. She says she feels that the people in her company who have been taking up such positions aren't worthwhile for her company. Nonetheless, I have to admire the ingenuity involved in such a system meant to fulfill the company's promise of lifetime job security to employees who give over their lives to their employers (often just after university graduation). It may not be perfect or productive, but it does seem fair.

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