Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

CEO behind Japan’s best-performing stock says his secret is raising salaries

bloomberg.com

Post reply on HN
Print view View original

41–50 of 266 posts

Re: CEO behind Japan’s best-performing stock says his secret is raising salaries

#41

Post by jacobr1 »

krishvs wrote: post #22

Sounds good but does this scale in the long term? Looks like a resource placing firm. Not sure about japan, but in India it is expected that on average as an employee you get a 10 to 15% hike year on year primarily due to inflation pressures. How would this company be able to afford this if they are both reducing prices for customers while simultaneously increasing base salaries. Wouldn't the employees leave after 2…

Japan has had much lower inflation rates than India over the past few decades. Famously Japan has had close to 0 inflation.

It seems like the real reason for this firm's success though, is removing multiple layers of contractors. Just hiring skilled engineers and paying them fair rates seems sufficient to shake up the industry. That seems sustainable to me - provided they keep salaries competitive - presuming some of their competitors try a similar approach.

Re: CEO behind Japan’s best-performing stock says his secret is raising salaries

#43

Post by ecpottinger »

lupire wrote: post #37

Headline is contradictes by the article. The company replaces layers of contractors with direct employees.

But he also gets good direct employees by raising the wages he is willing to pay for the same work.

The higher pay means he has the pick of the good employees.

Re: CEO behind Japan’s best-performing stock says his secret is raising salaries

#44

Post by II2II »

savant_penguin wrote: post #26

I'd like to question the premise. How confidently can you associate cause and effect here? Based on what can he guarantee that raises in salary caused the company to grow? If the formula is so simple couldn't other companies copy that and grow 5500%?

The article left me with the impression that he was acquiring companies in order to acquire qualified engineers (and, likely, clients) while finding efficiencies by reducing the number of managers. Presumably there will be room for growth as long as there are companies to acquire, but it will suffer from diminishing returns.

Replicating his approach would be difficult since it is based upon the premise that engineers are actually creating value for the company and acknowledges that management is a cost centre. That seems to be diametrically opposed to the culture of many businesses. (That's not to dismiss the value of managers since they are necessary for the operation of a business. It's simply a recognition that clients pay for the engineer's product, rather than the management's labour.)

Re: CEO behind Japan’s best-performing stock says his secret is raising salaries

#45

Post by ksherlock »

lupire wrote: post #31
SMAAART wrote: post #7

It's not the whistle that pulls the train! Chances are that Tange hired well qualified employees tht fit the corporate culture (and fired the ones who didn't fit in), and continued to reward as objectives were met. Remind me of Netflix and GE 20 years ago.

GE was financial engineering and cooking the books, though.

Nobody said the culture and objectives were good!

Re: CEO behind Japan’s best-performing stock says his secret is raising salaries

#46

Post by rurounijones »

NalNezumi wrote: post #35

While establishing a "cause & effect" here seems very hard, from my personal experience working in software field in Japan, I think the winning concept here is actually the combination of removing middleman and paying good salaries. Japan is very very behind in IT/digitalization compared to most western countries. This doesn't just mean it's behind in product portfolio and quality, but that perception of software eng…

As a further example:

In my last full-on japanese company it was basically impossible to find any developer with more than 3 years experience by accidental design because:

1: No applicants studied computer science in university so they started learning when they joined the company and were assigned a development role.

2: After 3 years they they got promoted to a "manager" level role and stopped doing development. There was no concept of junior developer -> developer -> senior developer progression. If you wanted promotion you went from developer -> manager; it was the same for sysadmins. Their IT and development suffered heavily for it.

A team of 10 "western" style trained senior developers and sysadmins would have been able to do the work of 50 current employees at least for a large overall cost saving even with higher salaries.

Just the way things worked. Japan is indeed very different when it comes to how the workplace works in relation to tech in traditional companies.

Re: CEO behind Japan’s best-performing stock says his secret is raising salaries

#48

Post by Rzor »

shp0ngle wrote: post #40
Rzor wrote: post #4

Outline didn't work for me: https://i.imgur.com/ydYsy4q.jpg

what works for me is just disabling JS. That actually fools a lot of websites - like NYTimes and I think WaPost.

Usually I just interrupt a reload, but sometimes it keeps loading the popup after a while. uBlock's disable JS button helps, but I never remind myself to use it. I found out that I could only recently.

Re: CEO behind Japan’s best-performing stock says his secret is raising salaries

#49

Post by ecpottinger »

rileymat2 wrote: post #38
lotsofpulp wrote: post #29

Earlier quoted context omitted.

>How confidently can you associate cause and effect here? You cannot. It depends if you’re buying commodified labor and selling commodity products. Walmart and McDonalds franchisees are not going to see much difference other than higher labor expenses and reduced sales due to higher prices at competitors.

Is this true? When I worked as an assistant manager at Burger King, you could see employees that were more productive by a large factor. If paying them more led them to stay longer it would have been a big win. The best could do the work of 2-3 people, if paying them 1.5x more means they stay, you more profits on lower labor costs. What is hard to do is create a repeatable process for this. And trusting local managem…

Equally important, when I work at Arby's the quality of some of the workers was questionable at best, but because of the pay rate the better workers soon found work elsewhere and most who were left clearly did not as good or fast of a job as they could.

I only stayed since I only had to work in the early morning and the work was less than a block from my house. Also the other worker "Dave" was studying robotics at the local college, it was amazing how much the other worker tried to put him down because he did not spend the night after work going out for drinks with them (neither did I).

Looking back, if the store had more workers like myself and Dave, I bet we could have increased the sales 20-50%.

Re: CEO behind Japan’s best-performing stock says his secret is raising salaries

#50

Post by hardwaresofton »

Some context on the japanese job market from what I've seen:

- The entire japanese job market's wages are depressed[0]

- In 2019, pressure had to come from the PM (not the local unions) to raise the minimum wage to 1000 yen/hour (~$9/hour)[1]

- Engineers are underpaid here, possibly more so than the EU in relation to the US. This is amplified for japanese companies (whether "black"[1] or not)

- With nationalized healthcare and generally low cost of living (even in Tokyo, a "world city"), most workers do not feel the pain of being underpaid sharply. Cultural differences and a propensity to save (more ant than grasshopper, let's say) generally feels like the backstop behind the economy (other than the BOJ's enormous purse and very active involvement).

- There is a sort of inbuilt trust in the society that expresses itself in economic transactions (loan companies can be very trusting, risk is considered low with Japanese applicants, etc) and greases the wheels of commerce most of the time, if all participants are local. There are other factors (sometimes the same ones) that make it difficult/slow down japan but those are well discussed generally.

- "Super Salaryman" is a colloquial term here (I can't find it on wiki or elsewhere) for a salaryman[3] that makes 10 million yen (~$90k) per year

- Japanese companies often provide "free" company housing to new grads to enable them to save while being paid relatively little. Many live with for a bit after graduating (women more so than men) as well without much stigma.

- Company standing/appearances mean alot -- $60k at [large conglomerate] is far and away more prestigious than $80k at [unknown startup] in the eyes of many.

[EDIT] Added some more from a different comment that might be useful.

[EDIT2] - fix the super salaryman yen estimation, confused with 10 million

[0]: https://www.japantimes.co.jp/news/2021/03/17/business/lowest...

[1]: https://www.japantimes.co.jp/news/2019/06/07/national/japan-...

[2]: https://en.wikipedia.org/wiki/Black_company_(Japanese_term)

[3]: https://en.wikipedia.org/wiki/Salaryman

Post reply on HN