Originally published on metropolis.co.jp on August 2012

As a highly qualified professional, Nobuko Suzuki spent many years working in Tokyo’s publishing industry. However, once she left her job to raise three daughters, Suzuki was unable to return to her previous field. The only position the university-educated 35-year-old could find was a job in a candy factory. Had Suzuki lived in the US, Canada or Europe, she might have used her educational background and experience to find a senior position. But in Japan, she was yet another case of a highly qualified woman “off-ramping” to a life outside the working world.

Suzuki’s case is the norm. A study by New York-based Center for Work-Life Policy (CWLP) found that a majority of highly qualified, university-educated women in Japan “off-ramp” early on and never find “on-ramps” to resume their careers.

The study, entitled: Off-Ramps and On-Ramps Japan: Keeping Talented Women on the Road to Success was compiled through focus groups and one-on-one interviews with more than 1,500 respondents.

“This study definitely challenges conventional wisdom,” says Laura Sherbin, co-author of the report, explaining that “deeply engrained traditional views have the power to limit the career opportunities for educated Japanese women.”

While conventional wisdom suggests Japanese women are more “family-oriented” and more likely to quit their jobs to raise children, the study proves otherwise. Many don’t leave because of children—workplace pressures force them out.

“Only 32 percent of Japanese women cite childcare as an issue in their decision to quit,” says Sherbin. “It’s also worth noting that 43 percent of college-educated Japanese women over 40 don’t even have children, so childcare is not an issue for nearly half of the women surveyed.”

Among pressures cited were rigid workdays, a lack of advancement opportunities, and gender bias. This situation also drives many qualified Japanese women to US or European companies—bad news for a country facing a growing demographic crisis.

Exodus of Talent

The CWLP study discovered Japan’s female workforce exodus is more pronounced than in other developed countries. Roughly 74 percent of college-educated Japanese women voluntarily leave their jobs, more than double the percentage in the US (31) and Germany (35). Yet only 32 percent of Japanese women do so for childcare-related reasons, compared to 74 in the US and 82 in Germany. Instead, 49 percent of working women in Japan say they quit because they feel stymied or stalled at work.

“This is an astonishing figure,” says Sherbin. “We were very surprised to find that childcare and eldercare are not the main forces driving this exodus.”

Japanese women who want to re-enter the workforce after having children also report their chances are slim. Most (77%) wanted to resume, but only 43 percent succeeded in getting careers back on track, compared to 73 in the US and 68 in Germany.

Even those lucky enough to find a job faced penalties in earning power and job advancement. Forty-four percent said they had to take a pay cut, while others reported fewer management responsibilities or possibilities for promotion.

So what would keep qualified Japanese women on the career track? Study co-author Sylvia Ann Hewlett thinks that both the availability and de-stigmatization of flexible work hours could help. “The majority of women who took an ‘off-ramp’ say they would not have quit their jobs if they had the option to choose a flexible work arrangement,” she says. Work-from-home or flexi-time options are sometimes offered, but 69% of respondents said taking them leads to disapproval and career backlash.

Help for Japan’s Economy

The exodus of qualified women is alarming given the talent crunch Japan is expected to face in the coming years. Taking advantage of the female talent-base could counterbalance the well-documented aging population and low birth rate.

“It’s like trying to run a marathon using just one leg,” says Kathy Matsui, Chief Japan Equity Strategist with Goldman Sachs Tokyo. A good example of an educated senior executive who returned to the workforce after having children, Matsui has published several studies on the topic culminating in 2010’s Womenomics 3.0. “There is a vast pool of talented and experienced women in Japan’s workforce who are simply untapped,” she says.

Amid a demographic crisis, this is not merely an oversight: it’s an incredible waste of an economic opportunity. Women tend to be bigger spenders than men, consuming clothing, cosmetics, food, restaurant meals, and other items. They’re also buying more big-ticket items such as holidays and real estate than ever before. Against a backdrop of anemic consumption, allowing more women into the workforce would provide huge cash injections for the ailing Japanese economy. Matsui estimates Japan’s GDP could grow by as much as 15% if the country closed its gender employment gap.

“It is simply because of an 8 million person increase to Japan’s workforce… More workers mean more income, more consumption—a virtuous cycle.”

However, in a country notoriously resistant to change, closing the gender employment gap won’t be easy. Japan’s cultural beliefs bar women from decision-making positions and keep salaries unequal.

“This is a case where change can be driven by employers, without waiting for government policies to shift traditional mindsets,” says Hewlett. “Companies can create a female-friendly workplace by implementing initiatives that enable and encourage women to advance in their careers.”

Hewlett has plenty of practical suggestions, including “formalizing flexible work arrangements, providing career development opportunities and leadership training for both women and men, training male managers to recognize the importance of diversity, showcasing female role models in director-level positions, and creating support/advocacy groups that enable women to build powerful networks.”

Recommendations

Some of Kathy Matsui’s recommendations in Womenomics 3.0 involve changing legislation, while others involve social changes and new cultural thinking from top to bottom in Japan’s rigid corporate culture.

Matsui explains HR departments tend to quietly “discriminate” against employees with large time gaps in their CVs. The Equal Employment Opportunity Law covers issues like this, but this is rarely enforced.

“I used to be wholly opposed to diversity quotas,” says Matsui, “but watching the positive impact of Norway’s mandatory/legal quota […] has made me re-think.” The Scandinavian nation adopted a ruling that 40% of listed companies’ boards be female. Without a quota, Matsui fears “it will take far too long to ‘move Japan’s needle.’”

Ultimately, including more highly qualified women in the workforce benefits everyone—employee, company, country and economy. Resisting changes to the gender employment gap no longer makes sense for a country like Japan, that badly needs all the talent it can find to get its economic house back in order.

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