Comparative Analysis on the Job-Broking Market
in Japan and Finlandby

Heikki Raisanen1

with the contribution of
Elisabet Heinonen2

Contact person at the Japan Institute for Labour Policy and Training:
Mr. Haruhiko Hori, Researcher
e-mail: hhori@jil.go.jp

1

Dr. Heikki Raisanen is Research Director at the Finnish Government Institute for Economic Research (VATT) in
Helsinki. E-mail: heikki.raisanen@vatt.fi
2

M.of Soc.Sc. Elisabet Heinonen is Project Manager at the Finnish Ministry of Labour, Helsinki. E-mail:elisabet.heinonen@mol.fi

2

Foreword and acknowledgements
This study has been made possible because of the foreign researchers´ visiting programme of theJapan Institute for Labour Policy and Training.
The Institute has provided good resources for carrying through this study. The study visit at theInstitute in March 2005 proved to be an inspiring working period and a real learning process for theauthor on Japanese working culture and the labour market. The Institute´s actions in inviting me forthis visiting research period and organising this in practice are greatfully acknowledged. I am wellaware that this has been a unique opportunity to be able to do research work in Japan. This time was
my third visit to Japan and it has always been a pleasure to be here at the hearth of the Asian culture.
I wish to present my sincere gratitude for being selected into this programme for the honorable
President of the JILPT, Dr. Akira Ono and his competent coworkers. I also wish to thank President
Ono for his valuable time and interesting discussion with him.
Discussions with Director Yukihiro Miura of the international department and Deputy Director
Sumio Sakai proved to be valuable and interesting. I wish to thank Senior Researcher and AssistantProfessor Shinsaku Matsumoto for discussion on the detailed issues of the Japanese recruitment
market behaviour, which made me better understand the Japanese situation.
Many discussions with Researcher Haruhiko Hori have been of ultimate importance in working out
this study at the JILPT. I wish to cordially thank him for invaluable help in every respect in thisresearch project from preparations to the end. Mr. Hori is a real Japanese gentleman and a
researcher with important research themes himself, but he never seemed to be short of time for a
foreign visitor´s odd questions. He organised also the Japanese interviews.
Long-term Visiting Researchers and my short-term colleagues, Professor Dev Raj Adhikari from
Nepal and Senior Lecturer Saman Dassana yake from Sri Lanka proved to be real academic
gentlemen with whom I shared inspiring discussions around multiple themes of the Japanese labour
market.
Research infrastructure is not often mentioned as a precondition for doing serious analytical work.
The web based information services and the library of the JILPT meet high standards. I also wish to
thank Deputy Director Ryoukichi Katagiri for a good introduction to the library services.
I also wish to thank my supervisor at the Finnish Government Institute for Economic Research,
Director General, Dr. Reino Hjerppe for his in every respect positive attitude towards this research
effort which gave me even more motivation for this study visit.
My colleague at the Finnish Ministry of Labour, Project Manager Elisabet Heinonen has
contributed in carrying out this research by participating in planning this study and taken main3
responsibility of the research interviews in Finland. She has also been my back up in Helsinki
during the visiting research period in Tokyo and has provided me some statistical information andcomments on the draft. Her help and participation in the research has been invaluable.
Finally, I wish to thank my family for their patience and understanding for also giving me thisopportunity.

At the Japan Institute for Labour Policy and Training
Kamishakujii, Tokyo, March 2005

Heikki Raisanen

4Contents
Foreword and acknowledgements .................................................................................................... 2
1. Motivation for the Study.................................................................................................................. 5
2. Economy and the Labour Market..................................................................................................... 6
2.1. Economic Developments .......................................................................................................... 6
2.2. Population and Labour Force Participation................................................................................. 7
2.3. Employment, Unemployment and Labour Market Policy ............................................................ 93. Main Characteristics of the Job-Broking Market ..............................................................................133.1. Recruitment and vacancy data..................................................................................................143.2. Reasons for recruiting..............................................................................................................16
3.3. Recruitment channels ..............................................................................................................17
4. The Role of Technology and Skills at the PES ................................................................................20
4.1. The functioning of the public employment services ...................................................................20
PES staff resources .....................................................................................................................21
Interview method........................................................................................................................22
The four PES offices in two countries ..........................................................................................23
4.2. The role of Technology ...........................................................................................................23
Internet in General and effects on PES job-broking services ..........................................................23
Effects of PES web services.........................................................................................................25
Future role of the Internet in whole recruitment of labour ..............................................................26
Future role of the Internet for the PES services .............................................................................27
Internet or mobile technology in job-broking ................................................................................28
4.3. Labour Market Skills at the PES...............................................................................................29
Skill demand rising from the labour market changes......................................................................29
Fundamental labour market skills in the PES work........................................................................30
Relevance of knowledge on various recruitment channels ..............................................................31
Relevance of being aware of recruitment problems........................................................................32
Future considerations for labour demand and supply .....................................................................33
4.4. Main similarities and differencies in technology and skills .........................................................35
Summary of the interviews .........................................................................................................35
Have the hypothesis been verified? ..............................................................................................37
5. Conclusions and Policy Recommendations ......................................................................................38
References ....................................................................................................................................41
Appendix 1. ..................................................................................................................................44
Appendix 2. ..................................................................................................................................46
Appendix 3. ..................................................................................................................................47

5

1. Motivation for the Study
In a modern society, the labour market is an arena where people earn the ir living and apply their
human resources in a meaningful way. The modern labour market consists of numerous submarkets
and millions of transactions when employers want to hire someone or people search for a job. It isof vital importance how this kind of matching of labour demand and supply works. Information on
both job-seekers and job vacancies is valuable in making the market work better. Labour market
information may be provided as an individual service by a Public Employment Service officer or
via the Internet. This kind of work around job-broking also requires special skills.
The idea of this study is to analyse the main characteristics of the Japanese and Finnish job-broking
market from a comparative perspective. The analysis will be started with an overview on theeconomic and labour market context in both countries. After that, the main job-broking market
characteristics will be analysed (concentrating on the Public Employment Service). The role of theInternet in job-broking is taken for further discussion.
The role of the Public Employment Service (PES) is addressed more deeply by studying theorganisation, volume and qualifications of the PES personnel in both countries. The qualificationsof the PES personnel are studied by interviewing selected PES personnel in both countries aroundthe problem area of what kind of qualifications the labour market changes seem to emphasise. Theinterview method is also applied for deepening the picture on the role of the Internet and othertechnological changes in the job-broking market.
Conclusions and policy recommendations are based on the idea that the results of this study may befound interesting besides academics, but also in both countries in question the authorities have akeen interest in developing the operations of the job-broking market. Also internationalorganisations working in this area may find the outcome beneficial.
Comparing the job-broking market in Japan and Finland means a comparison of two very different
kind of countries´ characteristics. Japan is a great nation with a population for over 127 million
people and is the second-biggest economy in the world as Finland is a small European country witha population of 5 million people. Despite the differences in scale, there are, however, some very
interesting aspects which both societies share. A high standard of living combined with an advanced
level of technology and ageing society are examples of those features common for both societies.
As to the labour market, the Japanese lifetime employment system is quite different from the
Finnish case where short-term demand factors have more relevance. The Finnish labour market
represents in this comparison also the European style labour market with quite typical European
problems and solutions. However, the Japanese lifetime employment system concentrated on large
corporations is changing and attitudes towards it in companies would imply that at least partial
adjustment of the system is inevitable. This system can be described as a practice where companies
hire a specific amount of new graduates at fixed times every year and with open-ended contracts therecruits may continue working within the same company until they retire. It is interesting to note

6
that Japanese people still favour this system: almost 80 per cent favour this employment practice atleast somewhat 3 . Job security is in principle high under the Japanese system, but in the 1990s
companies were forced to reduce the number of employees, which also increased unemployment
and reduced the recruitment possibilities for school leavers 4 .
The job-broking market in both countries includes public as well as private actors. However, theanalysis is based on the role of the Public Employment Service and its functioning. The role of theInternet in the job-broking market and the qualifications at the PES are of special interest in thisstudy. They are intended to deepen the picture of pure statistical comparison and literature analysis.
The basic motivation fo r this study is to try to find out whether some features of the job-broking
market have developed into different directions in the two countries and in that case what are thereasons for it and their consequences. Like the differences, the similarities also are interesting.
The basic hypothesis is that the application of the job-broking technology is on a high level in bothcountries, but the way the labour market function and recruitment takes place are basically very
different. As a conclusion, the hypothesis on the qualifications of the PES personnel is that there
should be some basic similarities e.g. in applying the technology, but the market and administrativeenvironments also set different requirements. This study tries to find out whether thesepresuppositions hold or not. The study is basically a descriptive comparative analysis applying
mainly macro level statistics and literature analysis which is partially deepened by PES interviews.

2. Economy and the Labour Market

2.1. Economic Developments
Japan is the second biggest economy in the world as it produced 12.2 per cent of the OECD GDP in
2000. Finland represented only 0.5 per cent of the OECD GDP in the same year. The economic
growth in 1991-2001 was 1.2 per cent on average in Japan and 2.7 per cent in Finland. However, in2002 the Japanese economy faced slight negative GDP growth of -0.3 per cent, but turned back to
the growth of 2.7 per cent in 2003. The Finnish GDP growth was 2.3 per cent in 2002 and 1.9 percent in 2003. 5 The real income level per capita in Japan and Finland is almost the same.
The Japanese economy has experienced a kind of slow deflation since 2001. Before that, somedemand fostering measures like permanent tax cuts were carried through and the economy started torecover from a long period of slow growth, but this turned out to be a short period. In 2002, theunemployment reached a record high level of 5.4 per cent but is expected to decrease slightly in
3

Labor Situation in Japan and Analysis 2004/2005 (2004, 26-27)

4

Koshiro (2000, 197)

5

OECD (2004b, 19)72005. The average business sector labour costs have increased only very moderately from 1991 to
2001, only 0.3 per cent annually. 6 The main industries are manufacturing, construction, trade, realestate, services and communication. Japan especially exports cars, electronic devices and computers.
The USA has been the most important single trade partner country as the Asian countries come next,
but China was already in 2004 number one trade partner for Japan with a 20 per cent share of total
trade. Raw materials are the main imported goods as the domestic resources for raw materials are
relatively limited. Japan has a large surplus in trade balance. 7
The Finnish economy experienced an extreme recession in the beginning of the 1990s, which was
deeper than ever in any western economy after the Second World War, but the recovery was also
rapid. Considering the recent developments, the public sector surplus is strong (the best among the
EU15 in 2002-2003), economic growth relatively good and inflation low, but the development in
the labour market has been relatively sluggish in the recent years. The employment is expected to
grow in 2005, however, after remaining relatively stable for a couple of years. The unemployment
is still at a high level. In manufacturing industries, the electronic industry has experienced an
expansion as the other major branches in manufacturing are wood, paper and pulp industries andmetal industries with more stable longer term development. The exports of the Finnish metalindustry including the electronic industry (e.g. mobile phones) increased rapidly in the 1990s toreach almost a half of the total exports but has stagnated in the recent years. 8

2.2. Population and Labour Force Participation
Japan had a population of 127.6 million people in 2003 as the corresponding figure for Finland was
5.2 million. The difference in the magnitude of the age cohorts in a society is an important factor in
the labour market in also taking the welfare of the whole population into account. If various cohorts
are clearly of different magnitude, this can cause difficult problems in terms of recruiting new
employees to replace those reaching the pensionable age. Also in the educational system it isproblematic, if next cohorts entering certain educational level are clearly different in size as theirpredecessors. To continue, depending on the system of financing health services and pensions forthe aged population, it causes problems if the working age population is more limited in number.
Both Japan and Finland have large post-war baby boom cohorts which were 50-54 years of age in
2003. They were the largest cohorts in both societies. However, reading carefully the figures
presented in the following, Japan faces even more difficult problems in the labour market as thenext cohorts following the baby boomers are clearly more limited in number in relation to the
Finnish situation. In the coming years, Japan can adapt to population changes with large cohorts
born in 1969-1978 which were 25-34 years of age in 2003. After these cohorts the following ones
are smaller and smaller in number. In Finland the working age population also starts to decline as
the largest cohorts are reaching the age when they practically leave the labour market. In Finland
the cohorts born after the mid 1970s are more even in magnitude, but the adaptation to the changing
situation is faced in the medium term.
6

Labor Situation in Japan and Analysis 2004/2005 (2004, 2-4); OECD Employment Outlook (2004, 19-23)

7

http://www.japan-guide.com/e/e2043

8

Finnish Economy. Structural indicators (2004)

8

Figure 1 a and b. Population profiles, working age population by 5- year cohorts in relation to thelargest cohort (=100) in 2003 (a, left Japan; b, right Finland)-100,0

70-74

70-74

65-69

65-69

60-64

60-64

55-59

55-59

50-54

50-54

45-49

45-49

40-44

40-44

35-39

35-39

30-34

30-34

25-29

25-29

20-24

20-24

15-19

15-19

-50,0

0,0
male

50,0

100,0

-100,0-50,0female

0,0
male

50,0

100,0

femaleSources: Statistics Japan; Statistics Finland and Finnish Labour Review 2004

Taking the labour force participation of the population into consideration, Japan has only very
limited labour resources in the prime age male population, which is practically fully integrated into
the labour market. Finland has more resources in this respect taking the Japanese participation as abenchmark especially with the older prime age and aged working age population. The Japanese
domestic labour resources are clearly found in the female population compared with the Finnish
participation model. In comparison to Japan, Finland has much to do with improving theparticipation of the elderly population, which is really impressive in Japan. However, this kind ofcomparison is just an idea, as the real decisions on labour supply are often made in ho useholds ofboth spouses together and especially here the welfare regime and its effects on the female
population is relevant as are the behaviour of exit from the labour market. The total labour force
equalled 66.9 million people in Japan and 2.6 million in Finland in 2002.

9
Figure 2 a and b. Labour force participation by age, males (a, left) and females (b, right) in 2003 9
100

100

96,796,9 97,597,2 96
94,493,792,392,1
93,5
89,4
89,2
84,6

90

90

80

80
71,3 71,2

70,8
68,4

70
60

male, JP50

male, FIN

40
30
20

32,3 29,9

27,5

77,8
73,4
69,4
65,8

70
60

72,2
70,3 72,5
68,1
58,9

female, JP
female, FIN

40

39,4
34,1

30

16,6

63,1
60,3

88,9 88,8
85,9

50

25

20

10

84,8
80,2

16,6

13

10

7,6

0

2

0

Sources: Japanese Working Life Profile 2004/2005, Labour Statistics, 18; Finnish Labour Review, stat. annex p.16-19

2.3. Employment, Unemployment and Labour Market Policy
Figure 3 a and b. Dependency between GDP and unemployment in Japan (a, left) and Finland (b,right), annual changes in 1991-2003 10

unemployment change, %1998

unemployment change, %Observed

1992

5,00

Observed

1993

LinearLinear

1999

0,60

4,00
1991

3,00
2002

1994

0,40
2,00
2001

1995

1993

1,00

1996

0,20

1994
2002

0,00

1992

2003

2000

1996
2001
1997

0,00

1991

1999

-1,00

1995

2000

1998
1997

2003

-2,00
-2,00

0,00

2,00

4,00

6,00

GDP change, %

-7,50

-5,00

-2,50

0,00

2,50

5,00

7,50

GDP change, %Data sources: OECD Employment Outlook, various years

9

For Finland, the last age group is 65-74 year old, for Japan, it is 65 and over which makes the categories uncomparable
in a strict sense.
10

linear regression for Japan: r2 =64 %, Y=0.44-0.14X, signifigance=0.003, F=16.1 and for Finland: r2 =61 %, Y=1.980.68X, signifigance=0.005, F=13.9, where Y= unemployment change, % points and X= GDP change, %10Calculating simple regression equations for unemployment change from 1991 to 2003 with the
GDP change as an independent variable, the Finnish variation in both variables is much higher thanthe Japanese. However, calculating the critical values which predict that unemployment remains
unchanged, shows that the relation in both countries resembles each other amazingly much: inJapan, a GDP growth of 3.1 per cent is needed for the unemployment to remain constant, as thecorresponding figure for Finland is 2.9 per cent.
Table 1. Labour market balance for 1998 and 2003
Japan 1998

Japan 2003 11

Finland 1998

Finland 2003

working-age
population (15-64
years), millions

86.89

85.42

3.44

3.48

labour force (15-64),
millions

63.09

61.79

2.49

2.58

participation rate, %

72.6

72.3

72.4

74.1

primary industries,
millions (%)

3.43 (5.3 %)2.93 (4.7 %)0.14 (6.5 %)0.12 (5.1 %)secondary industries,
millions (%)

20.50 (31.5 %)18.19 (29.1 %)0.61 (27.7 %)0.62 (26.3 %)tertiary industries,
millions (%)

41.21 (63.2 %)41.43 (66.2 %)1.46 (65.8 %)1.62 (68.6 %)job vacancies (V %)1,265,200 (2.0 %)1,670,100 (2.6 %)16,800 (0.7 %)23,300 (0.9 %)employed, millions

65.14

63.16

2.22

2.37

employment rate (1564), %

69.5

68.4

64.1

67.3

unemployment
rate, %

4.1

5.3

11.4

9.0

labour supply

labour demandbalance

Sources: OECD (2004) ; www.stat.go.jp (Population Statistics and Labour Force Survey Statistics); Year Book ofLabour Statistics (1998 and 2003 editions); Finnish Labour Review (4/2004); The Labour Situation in Japan 2000
(2000)Taking the 15-64 year old population into account, the labour force participation rate was of similar
magnitude in both countries in 1998, but since then slight drop in Japan and a more visible
improvement in Finland occurred. The share of primary industries is close to each other between
the countries with only slightly larger share found for Finland, as Japan concentrates more into
secondary industries and the Finnish tertiary sector employment is more developed. However, the11

For Japan in 2003, the breakdown of employment by main sectors presented in the table is based on Year Book ofLabour Statistics (2003) which presents some sectors in addition to the breakdown presented in the www.stat.go.jp .
Still, some minor industries are not included in the breakdown where the sum totals 62.55 million and the total numberof employed equals 63.16 million people. For the Japanese V rate, an alternative source in presented in appendix 3.

11differences are relatively narrow and the development between 1998 and 2003 shows similar
patterns for both countries. The employment rate was 5.4 percentage points higher for Japan in
1998, but the gap was only 0.9 percentage points in 2003 as also the differences in unemployment
levels have become more even. Despite the fact that the development in decreasing unemployment
in Finland has been among the best in Europe since the recession of the 1990s, the record highunemployment for Japan does not reach even the current more moderate Finnish levels. The
potential labour demand hidden in vacancies is clearly higher for Japan than for Finland 12 .
Various kind of atypical forms of work have become more common in many societies. On one hand
they increase labour market flexibility and provide new kind of job opportunities for those whowant to have this type of job. On the other hand, many employees take a part-time job, a fixed-term
contract or start to work as a dispatched worker only in absence of other options.
Table 2. Part-time work, fixed-term contracts and temporary work agency workers in Japan and
Finland, % of the employed
Year

JP 1.

FIN 1.

JP 2.

FIN 2.

JP 3.
temporarywork agency
workers, %FIN 3.
temporarywork agency
workers, %part-time
work, % 13

part-time
work, % 14

fixed-term
contracts, %15

fixed-term
contracts, %

1998

21.2

11.4

n.a.

17.4

1.4

n.a.

1999

21.8

12.1

n.a.

16.8

1.7

1.4

2000

20.0

12.3

(13.1)

16.3

2.2

1.7

2001

22.9

12.2

n.a.

16.4

2.7

1.7

2002

23.2

12.8

15.5

16.0

n.a.

2.0

2003

23.0

13.0

n.a.

16.3

2.0

2.0

Sources: Labour situation in Japan and Analysis 2004/2005, 18; Year Book of Labour Statistics (2003); General Survey
on Diversified Types of Employment (1999 and 2003 editions) Employment in Europe 2004 (2004, 261); Ministry ofLabour (2004, 2); Finnish Labour Review 4/2004, The Special Survey of the Labour Force Survey (2000), The
Employment Status Survey (2002).

In Japan it is very common for females to take part-time jobs, e.g. in 1999 it was five times ascommon as for males 16 , as in Finland part-time rate for females was only double of that for males17 .

12

Based on the following equation: (monthly flow x duration in months) = stock ; the estimation for the vacancy
duration would be 76 days for Japan on average and 27 days for Finland (in the published statistics it is 24 days for
Finland). This means that the Finnish PES deals with much broader vacancy flows in relation to the stock of vacancies
than the Japanese PESO.
13

Part-time workers in Japan are those working less than 35 hours a week.

14

Part-time workers in Finland are those who consider themselves as part-timers. In practice part-time workers coverpeople working also more than 30 hours a week on average.
15

The share of fixed-term contracts for Japan is based on The Special Survey of the Labour Force Survey (2000) which
has been carried through in 1992, 1997 and 2000 and The Employment Status Survey (2002), which has been carriedthrough in 1992, 1997 and 2002. In 1992 and 1997 the estimates based on the Employment Status Survey were 0.8 and0.7 percentage points higher than those based on the other survey, so the figures for 2000 and 2002 are not strictly
comparable and the figure for 2000 is presented in parenthesis . The definition is based on all temporary employment
not exceeding the duration of one year.

12
Despite the differencies in the definition for part-time work, it is much more common in Japan
compared to Finland. This is very much caused by the full-time work often taken by Finnish women.
Temporary work agencies have approximately the same relevance on both countries with the shareof employment varying between 1 and 2 per cent of the employed population. A slight increasing
trend has occurred during the last few years.
In Finland the main form of atypical kind of work is the application of fixed-term contracts. There
has been only very slight variation in the intensity, which is between 16 and 17 per cent of theemployed between the years 1999 and 2003 18 . In Japan the corresponding figures are available only
for a couple of years, but the majority of “non-regular” workers are part-timers with fixed-term
contracts having also a relatively large share of employment 19 . The main forms of atypical kind ofwork are different between the countries with Japanese employers and employees applying morepart-time work and the Finnish ones more fixed-term job contracts. These fixed-term contracts arevery common e.g. in the Finnish public sector, like in the universities, health care and social
services. In Japan it is the trade and service sectors which apply non-regular type of jobs most often.
Figure 4 a and b. Distribution of active labour market policy programmes in Japan (a, left) andFinland (b, right) in 2002.

measures forthe disabledsubsidised3%
employment
20 %

youth
measures3%
labour market
training
13 %measures for thedisabled
8%

subsidised
employment
33 %

PES
12 %

labour market
training
30 %

PES
61 %

youth measures
17 %Source: OECD (2004)

16

Labor Situation in Japan and Analysis 2004/2005, 20

17

Employment in Europe (2004, 261).

18

Employment in Europe (2004, 261).

19

The Employment Status Survey and The Special Survey of the Labour Force Survey, see also Labor Situation in
Japan and Analysis 2004/2005, 20 ; General Survey on Diversified Types of Employment (1999 and 2003)

13
Finland devotes much more of its resources to both active and passive labour market policies thanJapan does. In 2002 (or fiscal year 2002-03) Japan had an expenditure of 0.76 per cent of the GDP
for LMP with unemployment benefits representing 0.47 per cent. The breakdown of active
programmes above demonstrates clearly how important the PES is in the Japanese labour market
policy. The Finnish expenditure represented 3.07 per cent of the GDP in 2002 and unemployment
benefits did stand for 2.06 per cent. The active measures with a total GDP share of 1.01 per cent arequite evenly distributed between labour market training and subsidised employment programmes
followed by youth measures and the PES and a more limited category of measures for the disabled
persons. In relation to other labour market programmes, Japan emphasises the PES much moreheavily than Finland does, but in relation to GDP the Japanese resources (0.18 %) are not reallymuch more than Finland (0.12 %) spends.
In 1998, the Finnish expenditure was 3.96 per cent of GDP as the Japanese one equalled 0.76 percent in the fiscal year 1998-99. The relative share of the PES in terms of funds has increased in
Finland, as other forms of active programmes have been eased with decreasing unemployment. The
Japanese active spending and its distribution has been very stable over the last few years. 20

3. Main Characteristics of the Job-Broking Market
The Japanese and Finnish job-broking market are different in character and the way they work. In
Japan, the labour market especially in large corporations is still based on life- long employment andtherefore, recruitment is much concentrated on new graduates. Japan´s labour market can on the one
hand be divided into new graduate market and mid-career job-seeker market, on the other, into large
and small companies21 . Recruitment of new staff members takes place at certain time of the year
(usually so called Spring recruitment) or at a couple of predetermined fixed times of the year.
Interesting company- level modifications have been developed, e.g. Sony corporation is adopting a
recruitment system which allows collage graduates to actually enter the company any time within
the following two years after receiving a promise of a job. The system of recruiting university
graduates at April is also considered to interfere the academic studies and this is one solution forthis problem22 .
Small businesses have in one sense represented flexibility in the Japanese labour market as theycannot apply similar recruitment and employment practises as large corporations. In this sense theymust operate more like the Finnish or “European type” of labour market in general.
In Finland recruitment of labour is based on relatively short time demand factors. The educatio nal
system provides highly qualified labour force, but the graduates have often difficulties in
integration into the labour market. Work and university level studies are also usually carriedthrough simultaneously, as real full-time studies are more usual in the first years of studies. This
causes also that in Finland the graduation age at universities is high in international standards.
20

OECD (2002)

21

Labor Situation in Japan and Analysis 2004/2005, 29

22

The Japan Labor Flash No 31 (1.2.2005)

14
Basically, the “life- long” employment is possible in the public sector, where many officials havelong careers with the same employer. This is also more usual in large companies than small, but noreal life- long employment patterns do exist in Finland. The whole labour market is dynamic as
employment contracts begin and terminate, people apply for jobs and use leave schemes for
temporary withdrawal from the labour market, jobs are destroyed and new ones founded.

3.1. Recruitment and vacancy data
Table 3. Vacancy and job application data in 1998-2003
JP 1:
new
opening
rate23

FIN 1:
newopening
rate24JP 2:
activeopening
rate25

FIN 2:
activeopening
rate26JP 3:
placements /activeapplications, %27

FIN 3:
placements /activeapplications, %28

JP 4:placements/
activeopenings, %29

FIN 4:
placements /activeopenings, %30

1998

0.92

0.55
(0.98)

0.53

0.05(0.09)

5.7

2.9

10.9

54.0

1999

0.87

0.57
(1.04)

0.48

0.06(0.09)

5.7

3.2

11.9

58.0

2000

1.05

0.69
(1.26)

0.59

0.07(0.11)

6.2

4.0

10.6

58.7

2001

1.01

0.72
(1.32)

0.59

0.08(0.13)

6.1

4.4

10.2

56.7

2002

0.93

0.75
(1.41)

0.54

0.08(0.14)

6.1

4.6

11.3

55.0

2003

1.07

0.76
(1.47)

0.64

0.09(0.16)

6.8

4.7

10.5

53.1

Sources: Year Book of Labour Statistics (2003), table 23 and a separate definition of terms ; Japanese Working Life
Profile 2004/2005, Labour Statistics, p. 20 ; Finnish Labour Review 4/2004, Statistical Annex, tables 19 and 20.

23

New opening rate = flow of new job openings / flow of new job applications

24

New opening rate = flow of new PES vacancies / flow of new job-seekers (in parenthesis = flow of new PES
vacancies / flow of new unemployed job-seekers)
25

Active opening rate = stock of active job openings / stock of active applications. Note: The job opening figures forJapan are calculated based on persons as there is no separate vacancy data.
26

Active opening rate = active PES vacancies during a month / job-seekers during a month (in parenthesis = PES
vacancies during a month / unemployed job-seekers during a month). Note: These are not normal stock data, but gather
all activities within the time period in question on cumulative basis.
27

proportion of placements to applications = (flow of job placements / stock of active applications) x 100 . Note: Job
placements through referrals by the PES.
28

placements / active applications = (flow of filled PES vacancies during a month / job-seekers during a month) x 100 .
Note: The job-seeker data is a cumulative figure.
29
30

job orders filling rate = (flow of job placements / stock of active openings) x 100

placements / active openings = (flow of filled PES vacancies during a month / PES job vacancies during a month) x
100 . Note: The number of PES vacancies during a month is a cumulative figure.

15
The Japanese figures in the table above are calculated excluding the new graduates, which makes
the comparison in strict sense difficult. It is also possible that some conceptual differences remainin the table. Based on the calculations, the main outcome is that the Japanese recruitment market isrelatively more lively compared to the Finnish one. Comparing the new job openings per new
applications (or new applicants for Finland), the Finnish job opening rate is about three quarters of
the Japanese one. If the rate for Finland is calculated in relation to new unemployed job-seekers,
which is probably closer to the reality of the job-seekers´ structure in Japan, the Finnish figure
becomes much higher. However, in both countries a new job-seeker seems to have a fairly goodchance of getting a job based on this macro level assessment.
The large scale Finnish stock of unemployment is demonstrated clearly in the second indicator,
where the Japanese figure is much higher compared to the Finnish one. If this indicator could referto the job finding prospects of the (unemployed) job-seekers compared to the first indicator, thepossibilities seem to be worse and especially the gap between flow approach and stock approach islarge for Finland.
Job placements in relation to active applications do not differ much between the countries andplacements in relation to active job openings is clearly more intensive for Finland than Japan. The
differences are clearest in vacancy inflow, where Japan has better performance. The Finnish highstock of unemployed job-seekers affects the figures. In the vacancy filling end the Finnish outcome
is very good in this comparison and the Japanese placement rate quite low. In a nutshell, Japan does
better with the Public Employme nt Service recruitment market in relation to job applications orapplicants, but Finland does better in relation to handling the vacancies announced open at the PES.
The outcome is also heavily dependent on the employers´ behaviour. One thing that affects thefigures heavily is the vacancy duration.
Figure 5 a and b. Unemployment – vacancy (UV) curve for Japan (a, left) and Finland (b, right)
between 1990 and 2003 31
V%

1,2

3
1990
1991

1990
1

2,5

2003
1992

2001
2000 2002

1997
1996

2

1993
1995
1994

1998

2003
2002
2001

0,8

1999

20001998
06

1,5

1999 1997

1991
0,4

1

1992
0,2

0,5

0

0
0

31

1996
1995
1994
1993

1

2

3

4

5

6

0

5

10

15

20

The vacancy rate is calculated as follows: V % = (V / V + N) x 100, where V = stock of vacancies, N = labour force.

16
Sources: www.stat.go.jp (population and labour force statistics); Year Book of Labour Statistics (various years between
1994 and 2003); Finnish Labour Review 4/2004

The unemployment – vacancy curve indicates the functioning of the labour market. The Japanesecurve between 1990 and 2003 shows increase in unemployment, but the high vacancy rate has notchanged remarkably into one direction or the other 32 . The curve is, however, further from the origin
in 2003 than before. The Finnish curve demonstrates the shocking increase in unemployment
between 1990 and 1994 and after that the curve seems to have shifted further away from the origin.
The curves as such are not directly comparable between countries, as the level of the vacancy rate isheavily affected by the duration of the vacancy period. However it could be concluded that thedevelopment in both countries is not very favourable in the last few years.

3.2. Reasons for recruiting
It is not easy to compare the reasons for recruitment between countries. However, some relevant
information on this issue is available for the year 2001. The Japanese data is based on a survey of
employment management by the Ministry of Health, Labour and Welfare as the Finnish data isbased on a survey carried out by Statistics Finland on behalf of the Ministry of Labour. The
Following comparative outcome can be summarised.
The Japanese situation is based on multiple responses, so the sum of the responses exceeds 100 per
cent. The figures presented are calculated as unweighted averages for management, clerical,
technical / research and non-clerical position recruitments. New business or expansion of existing
one is clearly related to new jobs or gross employment. This was mentioned in only about one
quarter of mid-career recruitments in Japan, as the corresponding reasons were the dominant reason
for recruitment in Finland in 2001 with a share of 44 per cent of all recruitments. The distribution ofreasons in the Japanese survey is based either on business or management-oriented reasons(demand) or more employee-related reasons (supply). It is unclear with the figures available
whether the turnover is included in some of the reasons in Japan or not, but in Finland this is thesecond major reason for recruitment with a 40 per cent share of all. Leaving the labour market
because of retirement was the major reason for mid-career recruitments in Japan in 2001, but
represented less than one tenth of all reasons for recruitment in Finland. However, the raw figures
as such are uncomparable as the Finnish figures sums to 100 per cent and the Japanese does not, but
the major differences are observable. Recruitment of mid-career employees in Japan was based
more on supply-side factors of the labour market as in Finland the demand side factors werementioned more often.

32

In figure 5 the calculations are based on employment service statistics. The Japanese V rate is based on the number ofactive job openings. An alternative way of estimating the V rate for Japan is presented in appendix 3 based on survey
statistics, which makes the UV curve to better react to unemployment changes, but the range is much larger than in
figure 5 a.

17

Figure 6 a and b. Reasons for recruitment of mid-career employees in Japan (a, left) and all
recruitment in Finland (b, right) in 2001
person changed job atthe same employer

use ready skills and abilities

correct staff composition
other reason

compensate lack of recent graduate hires
person was retired

fill vacancies left by retirees
person changed to new
employerrequest by parent or affiliated company

filling of substitutevitalize the organisation by experienced persons

increase of staff / newjob

new business or expansion of existing one

0

10

20

30

40

50

60

0

5

10

15

20

25

30

35

40

45

50

Sources: Labor Situation in Japan and Analysis 2004/2005, 32; Hamalainen (2004, 2)

3.3. Recruitment channels
The use of recruitment channels can be compared somewhat better than the reasons for recruitment.
Despite of some remaining difficulties in the comparison the overall picture of the recruitment
channels can be drawn. In recruiting new graduates in Japan, the three main recruitment channels
are quite evenly applied. In labour market terms, recommendation by teachers is a supply side
measure, i.e. a job-seeker´s action with a mediator. If a company holds a fair or seminar for thegraduates, that is basically a demand side action. The third channel, applying website or other kindof job-search info, is a matching type of measure in the labour market as the company provides
information, but active operation on the job-seekers’ side is also required. The sum of the use of
these three main channels equals 101 per cent, which can be interpreted to cover well the
recruitment of graduates and there is probably not much use of multiple channels for one
recruitment. The gaining popularity of the Internet has changed the recruitment process forgraduates in the recent years. The Japanese mid-career hires are most likely to be comparable to thefunctioning of the Finnish labour market in general. The PES is the most important single channel,
newspaper advertisements the second and personal connections the third one. The sum of the threemain channels equals 114 per cent, which indicates that there is more use of multiple channels
already taken the three most important channels into account. The future recruitment strategy of18Japanese companies is quite even between planning to hire graduates and mid-careerists as theemphasis has heavily been on graduate recruitments before 33 .
Figure 7. Three main recruitment channels for new graduates (NG) and mid-career hires (MC) in
Japan, multiple responses in 2001

MC:personal connections

MC:newspaper advertisement

MC:PES

NG:job search web site etc.

NG:company job fair etc.

NG:introduction or recommendation by teachers

0

10

20

30

40

50

60

70

50

60

Source: Labor Situation in Japan and Analysis 2004/2005, 31

Figure 8. Recruitment channels in Finland, multiple responses in 2001
job-broking services of associations or organisations
temporary work agency (hiring)other channel
job-broking services of educational institutes
Internet
newspaper
info for own personnel
PES
direct contacts to former employees
0

33

10

20

30

40

JIL Survey of Companies (2003) at http://www.mhlw.go.jp/english/wp/wp-1/46.html

19
Source: Hamalainen (2004, 5)

The Finnish labour market differs mostly as to recruitment channels from the Japanese one as directcontacts to former employees is the most often used channel and the third one is information for thecompany´s personnel. The PES is important taking the second place. Newspaper advertisements
and the Internet also are used quite often. The latest developments indicate that the use ofnewspaper advertisements has dropped and the use of Internet increased rapidly in recruitment, also
the use of informal channels has increased in magnitude in Finland. The sum of these multiple
responses equals 183 per cent, which means for Finland, that 1.8 recruitment channels per vacancy
is applied on average. This means also that each of the channels cannot be effective in really fillingthe vacancy. The three most important channels in 2001 equals 124 per cent as the respective figure
for Japan was 114 per cent for mid-career hires. The figures are not comparable as such, but at least
taking the three most important channels into account and leaving the Japanese graduate
recruitment out, in Finland the multiple use of recruitment channels seems to be slightly morecommon on average than in Japan34 .
Table 4. Interpretation of recruitment market characteristics in Japan and Finland.
Japan

Finlandvacancies-high stock of vacancies, well inbalance with the number of jobseekers-low stock of vacancies, clearly
unbalanced with the number of jobseekers, vacancy filling efficientreasons forrecruitment-mid-careerists: substituting thoseretired main reason-mainly new jobs and worker turnover-new graduates: recruitment based on
longer-term assessment
use ofrecruitment
channels-mid-careerists: PES main channel,
newspapers also important (=mainly
formal channels)-new graduates: informal andcompany-level channels important-substituting those retired has not been
important directly in recruitment so far-informal channels used often-PES and newspaper important-multiple use of channels common

Interpreting the outcome, it seems that in Japan the macro level quantitative balance between thevacancies and job-seekers is rather well achieved. In Finland there is a clear unbalance between
vacancies and the high stock of unemployment, but vacancy filling is basically efficient. The
reasons for recruitment differ also and the Japanese labour market should be divided into two parts,
the new graduate market and the mid-career market. In Finland more short-term motivation forrecruitment is present than in Japan. In applying the recruitment channels there are some clear
similarities as well. In the mid-career recruitment market in Japan and in the Finnish labour market,
the PES and newspapers are important recruitment channels used. In Finland employers use more

34

In 2002 in Japan, 32 % of those who did actually find jobs did it through the newspaper or magazine advertisements,
25 % used informal personal connections and 22 % the PES as the share of schools was 7 %, private job-brokers
represented less than 2 % (Survey on Employment Trends 2002, 108).

20
often informal channels, also. For the Japanese new graduate recruitment market35 , company- levelrecruitment systems are often applied with also informal contacts.

4. The Role of Technology and Skills at the PES

4.1. The functioning of the public employment services
The main services at the Japanese PESO offices are placement services, vocational guidance andemployment insurance (=unemployment benefits). Besides these, some employment programmes
do also exist with the elderly, the disabled, part-time workers and graduates as the main target
groups. There are over 500 Public Employment Security Offices in Japan. The Ministry of Health,Labour and Welfare is in charge of the public employment services and at the regional level, thePrefectural Labour Office. 36 The vocational training for the unemployed job-seekers is organised by
specialised institutes, as the PESO offices work more directly with placement activities 37 .The idea
is that the training period is also part of the job-search period.
Some employment subsidies are also available in order to prevent unemployment or in case workers
are transferred to other companies and also for specified groups of job-seekers. In the 1990s new
kind of employment measures were developed in order to aid directly workers and these included
subsidies. Also service type of measures like job-search seminars with special counselling wereorganised and short-term vocational training was also provided. Also measures which help theworkers to move into growing industries have been developed as well as temporary public sector
employment programmes. The private job placement was also liberalised. 38
The Public Employment service in Finland carries out broad duties. The main functions are jobbroking services provided for the job-seekers and the employers, information services covering awide range of labour market and educational information, active labour market policy programmeswith the main types being labour market training and various forms of employment subsidies anddirect job-creation. Vocational counselling is also an important service at the Finnish PES. For the
young people, practical training is also organised. The PES also gives a binding statement on theunemployed job-seeker’s qualification for unemployment benefits. The benefits are paid then by the
National Social Insurance Institution or unemployment benefit funds of various branches.
Employment services are delivered both on individual and group basis and the e-services are welldeveloped. The service needs of the customer are first assessed by the PES on individual basis andthe job-seeker may also be referred to education or training, also advice in benefit matters is a work
intensive duty.
35

The Japan Times 10.3.2005 states in an article that more than 60 per cent of major enterprises accept applications via
the Internet, but the companies need to meet the applicants personally as well. Direct contact with the firm is still key tosuccess in recruitment.
36

Tana (2004).

37

Okutsu (2003)

38

Ito (2003)

21

There are many different forms of active labour market policy programmes available. Labour
market training is organised based both on employers’ demand for labour and the skills of the jobseekers. Also, other people than the unemployed can participate in LMT programmes. There areboth preparatory training and vocational training of various types, even additional LMT for
university graduates. Employment programmes are based on employment subsidies paid to theemployer who hires an unemployed person. In the public sector this is called direct job-creation.
Various forms of programmes are available, e.g. if an unemployed person starts a business of his or
her own, a start- up grant and training is provided and for young people without qualifications,apprenticeship training can be provided. At the Finnish PES, e-services have been developed
rapidly during the last few years. There is computer equipment available for self- service use at the
PES offices which are now being divided into job-search centres for open labour market job- finding
and placement services and into intensive multi-professional labour force service centres for the
hard-to-place applicants. 39
At the placement services, the job applicant can use the job-search facilities and e-equipment,
participate in e.g. a one-week job-search training service, get job announcements or assignmentsfrom the PES or get a vacancy alarm e-service or take advantage of personal job-broking services.
The employer gets job-seeker information from the PES and help in selecting of pre-selecting thesuitable candidates. The PES visits also the employers and organises targeted labour market training,
apprenticeship training and provides hiring subsidies. 40
From a comparative perspective, the active labour market policies are rather different between
Japan and Finland. In Japan, the PESO concentrates heavily on placement activities and benefit
matters, but in Finland the PES has a broader role in organising the labour market training,
subsidised employment and practical training programmes besides a large scope of employment
services (see also figure 4 a and b). The active programmes are also large in magnitude in Finland.

PES staff resources
In Japan in the fiscal year 2004, the regular PESO staff equalled 12,000 persons 41 . In Finland thecorresponding figure was at the end of 2003 4,091 persons. In addition, 710 persons hired with jobcreation programmes to work at the PES contributed to the staff 42 , but to make the figures ascomparable as possible, only regular staff is included into the calculation for Finland also.

39

For a detailed presentation on the Finnish labour market policy programmes in Finnish, see Heinonen – Hamalainen –Raisanen – Sihto – Tuomala (2004), see also Raisanen (2003)
40

Raisanen (2004).

41

Besides the regular staff, there are a large number of part-time workers at the PESOs, but this number is not available.
This information was given for the author by the JILPT representative.
42

Employment report (2003) at www.mol.fi

22

Table 5. Labour market phenomena in relation to PES staff resources in Japan and Finland in 2003.
Indicator / PES staff member

JP

FIN

Labour force

5,149

636

Unemployed

292

57

Vacancies

139

6

New applications

625

103

New vacancies

670

78

Placements

176

76

Stocks:Annual inflows:

Sources: see footnotes on staff resources and sources mentioned for table 1.

On one hand the PES has clearly higher quantity of staff members in relation to the labour market
phenomena in every respect in Finland compared to Japan. On the other hand, the workload is muchhigher in Japan per PESO staff member compared to Finland. The stock figures are probably notvery interesting from this point of view, as the real relevance of this depends on what kind ofservices the PES provides. However, the annual flows per staff member indicate the workload
somewhat better. If the Finnish figures would include also the additional staff hired temporarily at
the PES, this would decreases the workload by 15 per cent from that presented at the table above.
This very preliminary calculation indicates that the Japanese PESO has only very limited resources
for individual employment services 43 . Comparable figures are hard to find, as part-timers are
excluded from the Japanese staff number. However, this staff clearly decreases workload at the
PESOs.

Interview method
Chapters 4.2. and 4.3. in this report are based on PES interviews in Finland and Japan. Theinterviews were carried through in February 2005 in Finland and in March 2005 in Japan based onsame questions 44 . The report is based on interview notes which were originally taken during the43

An earlier comparison from 1991 between Japan, Norway, Spain and the UK shows also similar kind of differences
especially in vacancies (OECD 1992, 123).
44

For a more detailed information on the dates and persons interviewed and the specific interview questions, seeappendix 1.

23interview and written into comprehensive form briefly after the interview. In Japan, the interviews
were translated between Japanese and English by professional interpreters, which process may havecaused a risk of minor inaccuracies in understanding. The PES offices got the interview questions
beforehand, in Japan translated into Japanese. In Finland the interviews were carried through in
Finnish. In the report the researcher’s interpretation on the main points is presented and sometechnical expressions helping to understand are added compared to what was originally exactly
presented in the interview. The PES or PESO office in question where a particular comment waspresented is specified in the text. The Japanese interviews were attended by a Japanese researcher
from the JILPT taking notes, as well.

The four PES offices in two countries
The interviews were carried through in the two capital cities’ PES, the Helsinki PES office (thisoffice consists actually of several offices in different areas of the city under the same management)
and the Hello Work Shinjuku PESO office in Tokyo. The capital offices were the biggest ones inboth countries in question.
The other Finnish interview was done at the Turku PES office in South West Finland some 170 km
from Helsinki. The other Japanese interview was carried through at the Mishima PESO office over
100 km West of Tokyo. These two offices represent more local labour markets in the study, even if
they are both big cities.

4.2. The role of Technology

Internet in General and effects on PES job-broking services
This interview theme tries to approach the general role of technology and the Internet in theimplementation of job-broking services.
The Internet is applied for job-broking purposes both in Japan and Finland. The information
systems are also highly developed. Persons interviewed in Japan and Finland found that the Internet
provides good services and people use this a lot. The main effects for Japan mentioned are wideaccess to vacancy information and for the PESO especially, a rapid way of dealing with vacancies.
A problem of too much information in the Internet was also mentioned in Japan. In Finland thebroad selection of other Public Employme nt Services was also present in the interview. Similarcomment on the helpful effects of the Internet dealing with large quantities and the popularity ofthese services as in Japan was presented also in Finland. More demanding challenges for the PES
officials were also mentioned. Lack of skills for certain job-seekers and officials was mentioned asa problem area. In the Finnish PES offices it was seen that the Internet technology has contributedin the own initiative of the job-seekers in job-search efforts. In both countries self service
computers for vacancy information are available for job-seekers at the PES offices.

24

In Japan, there is a comprehensive employment information system which can be accessed fromanywhere in the country. Internet job placement started in Tokyo in 1999 and the same service wasintroduced for the rest of the country during the same year. Job information in Internet is provided
nationwide by the PESO. Job orders (= vacancies) from employers through Internet wereintroduced in 2004, but actually e- mail is used more often for this purpose. One Japanese special
characteristic is that information on the job-seeking seminars held by companies is also provided at
the Internet. Internet provides access to private placement companies as well. Information
technology is highly utilised by the Japanese PESO offices. The Shinjuku office provides services
mainly for the employers, but also matters like employment security (= unemployment benefits) aretaken care of. Shinjuku is a business area and there is much demand for labour, but the balance
between demand and supply is good. Without technology it would have been very difficult to work
as unemployment has increased. Job orders can be handled in a more speedily manner with the helpof this technology. More general labour market information is provided in the Internet by the
Ministry of Health, Labour and Welfare. (Shinjuku).
In Mishima it was considered that generally the Internet is advancing and individuals get a lot of
information from it. However, in the labour market there is too much information available forindividuals. That is causing one problem for people trying for re-employment. (Mishima).
In Finland the web services are of high quality and widely used by both job-seekers and employers.
Vacancies are also possible to announce via the Internet by the employer and also the web filling
method is applied for the PES vacancies. A national online vacancy information system gives
information on all vacancies open at the moment of access to the system. The web services are
considered to give good possibilities for redirecting the resources of the PES offices into otheractivities where personal services are necessary. The job-seekers are trained for applying the webservices and more web advisors are planned to be hired at the PES office of Turku. The webservices are presented in the initial information given for all new job-seekers. New job-seekers canreport themselves to the PES office by web. It was mentioned also that as bank customers 45 Finnish
people are used to web services and it is then easy to apply this also in PES services. It was seen
possible that job announcements 46 given for job-seekers by printed mail could be substituted by
new technology. In Turku, a certain open service facility called the Job Café can advise the jobseekers in web services. Also certain training for working out CVs is available. However, some jobseekers want to have a look for suitable vacancies on the note board, everyone is not using Internet.
(Turku).
Both the PES offices of Helsinki and Turku mentioned the effects of the Internet on the work of the
PES officials’ work. The work has become more interesting, but more demanding as well. Jobbroking activities need more expertise now and the skills have been broadened. The officer’s duty is
now more to help the job-seeker to find information on job-search and education and to be able tohandle it. Labour market information is also provided for the customers. The contacts have changed
more into using e- mail whatever the time is, this applies for both employers and the job-seekers.
45

In Finland it is usual e.g. to pay bills via the Internet on bank account. This kind of self service is also favored by thebanks.
46

A job announcement is a purely informative measure, i.e. a letter from the PES to the job-seeker on a possibly
suitable vacancy with no possibilities for benefit sanctions.

25
Own initiative and activeness of the job-seekers has been improved. Employers give a plenty of job
vacancies which need rapid action from the PES’s side. The officials need more training, but on theother hand there is more time for individual services. Web services in general have brought newcustomer groups to use the PES services. It is not possible to deal with large quantities without
technology. Some of the officers are still not able to use the web services effectively because lack ofadequate skills and attitudes. The job-seekers can be grouped into three as web users: 1)
independent users who do not necessarily even appear at the PES, 2) semi- independent users who
benefit for these services after given advice and 3) those who need help from the very beginning.
(Helsinki).

Effects of PES web services
The idea of this theme is to address more deeply the specific web services provided by the PES on
the implementation of the employment services.
Certain kind of selectivity in applying the web services were mentioned in both countries as aneffect of the PES web services, also increased efficiency is an outcome.
At the Shinjuku PESO office, it was seen that the main effect is that there is open access foreveryone to the same information and it is more efficient. The information technology has made the
PESO work more efficient. The job-seekers do not always need consultation and it is now possible
to concentrate on those who need consultation and assistance. The Internet services rise awarenessof both job seekers and employers about the services. When a job-seeker is for the first time in theoffice, information is given, also the employers are given the same information. Vacancy
information is on the web site, a major part of job orders is in the Internet. As some employers do
not want to let the info rmation to the Internet, then the name of the employer or contact information
is not provided. The Shinjuku PESO guides the job-seekers to the employers, they act in between
the job seeker and the employer. The current information system is complicated and at the Shinjuku
office it was seen that a fully transparent job information system is needed. There is basic
information on the job available through the Internet, the PESO office or a call centre can givefurther information on the jobs. The job-seekers are given advice to come to the office to getcounselling. One effect of the PESO services is that they also put some pressure on the private
employment service companies. (Shinjuku).
At the Mishima PESO office, the view is that all over at the PESO offices Internet service and job
information services are provided. At the Mishima PESO there is one PC exclusively for Internet
job-search use. For job-seeking information the office has a system to provide for a person coming
to the office in this purpose. There are 30 PCs available for job information, but not all people use
computers and some papers still remain. The job information system is easily achieved by justpushing one button, e,g. elderly people who have no computer literacy can do this. People visit theoffice to get some job information and especially job information from Mishima. The PESO tries tomake sure that visitors at the office can get information on our activities and we need a web site to
get them better involved in the PESO activities. The web is utilised throughout of our services.
(Mishima).

26
At the Turku PES office the guidance of employers into using the web services is applied on
selective basis. If there will be recruitment in the company, using the web is then preferred by the
PES, but not with a smaller company recruiting only rarely. Many vacancies are announced via the
web and all web formulas are considered clear for the user. The next step is that all new job-seekers
will report themselves to the PES via the web and also for the stock of current job-seekers this will
come. Electronic service is a matter of resources, routine affairs can be handled electronically andusing self service. (Turku)
The most important web service channels of the Finnish labour administration are the Internet ande-mail services. At its simplest, web service is information delivered through the Internet.
Employment services are now more well-known to the citizens because of the web. The challenges
put forward by now are found in the matters of interaction in customer service, like should the PES
give the job-seeker job assignments47 or not, how to motivate the job-seekers and how to assess theservice needs of the job-seeker, especially who needs more than the web services. The whole
individual job-broking is considered to transfer more and more into the web environment. Moreefficiency is brought into the system, this is a flexible service alternative independent of time andlocation and also the access to services has improved. Contacting has become easy, the quantity ofe-mail connections has remarkably increased. (Helsinki).

Future role of the Internet in whole recruitment of labour
In Japan the role of large and small companies is different as to applying the Internet services.
Large companies can take better advantage of these services as a great number of people visit their
web sites. Smaller companies must use other recruitment methods as well. The new graduate
recruitment market is much based on web information provided by the companies. In Finland the
PES offices also mentioned the companies’ special web recruitment methods and generally the roleof the Internet in recruitment is expected to rise. There was also mentioned the probable trade-off
between the companies’ Internet recruitment and the use of PES services.
Both the private placement companies and the PESO use the Internet a lot. Large Japanesecompanies have their own web sites and put job information there. In hiring the new graduates, thecompany puts job information on the web site and then the graduates contact the company. This is acommon system in Japan48 . Companies are also used to send vacancy information to universities
and put advertisements in the newspapers. Today, a majority puts vacancy information on the website. For the university students it is vital to go to the Internet. This information is now provided forall students, in the past companies selected which universities they did send information, now every
student has access to the information and this is good. In other words, the companies can findemployees from a wider range of applicants. For the mid-careerists, both large and small companies

47

A job assignment given by the PES to the job-seeker is an individual order to apply for a certain vacancy which the
PES considers suitable for the person. If the person given the assignment is not following it, unemployment benefit
sanctions will follow.
48

In recruiting new graduates, several interviews for the candidates can be organised before those who will be recruited
are selected.

27
put information on the web site. Not many people visit the web sites of smaller companies and thisis their problem. They also use the PESO office, newspapers and magazines. (Shinjuku).
In recruitment purposes, there are more and more Internet users at the PESO. Companies can alsodeliver their own information to get people recruited in those companies. However, it was
mentioned that at the PESO it is necessary to listen more carefully the needs of the individuals,
especially what kind of jobs they want to get and how they want to get the job. Here the PESO canprovide its services to job-seekers. (Mishima).
In Turku it was mentioned that many companies have their own web sites, which may limit the roleof the PES. Many companies have also special recruitment pages at the web. The structure of thejob-seekers becomes narrower if the vacancy is only on the company’s web site. (Turku).
In Helsinki the consideration concerning the future role of the Internet in recruitment in general isthat it has high and increasing relevance. Job-broking takes place more and more in the Internet.
Access is easy and independent of time and location. (Helsinki).

Future role of the Internet for the PES services
In both countries the role of the PES web services was considered to be as one actor among others,
even if it has a special role as a large actor and a public authority. Both employers and job-seekers
were seen as the beneficiaries of these services. In Finland the PES was seen to have a special rolein collecting various actors’ information together.
More and more people use the PESO Internet vacancy information, also employers use it to getworkers. The PESO Internet services have proved to be helpful for those young people who are notin employment, education or training (the so called NEET) and who only take part-time jobs. The
Shinjuku PESO office would be interested to use the Internet for vocational counselling, which has
already been tried, but it did not work properly. For foreign workers, like 2nd or 3rd generation
Japanese from Brazil or Peru coming back, e- mail services are applied widely. (Shinjuku).
There are already job information nets (in the Internet) available for individuals, people can haveaccess to this by mobile phone or from own PCs. The consideration at Mishima is that the PESO
does not want to develop a system of its own. There is too much information available forindividuals, they may not be able to know what to take. (Mishima).
The role of the labour administrations’ web pages is seen as gathering the information together. A
person should know a huge number of companies and their pages, but the labour administration cancollect this information together. Also it is the role of the PES that people get used to applying otherjob-search channels as well as the PES channels. The difference between the companies and the
public administration is that company pages can have a marketing oriented approach, but the labour
administration can take on its pages only objective and neutral facts. The vacancies announced

28
through the web can lack information, they must meet certain criteria for the PES to take them on
the web pages. (Turku).
At the Helsinki office, the services were considered to have already developed quite well, but in the
future the electronic web service is a means to develop services even further and to react to thechanging operational environment. With the help of the PES web services the job-seeker is able tobroaden his or her own search for a job or education or training. Also the individual PES services
are available. The strengths are a well-based knowledge on the education available in the country
and the web services of the vocational counselling services. Many employers take advantage of thelabour administration web services in preselecting the candidates for a job. This particular service is
known as the CV net. The high quality and accuracy of vacancy information is a challenge for the
PES. (Helsinki).

Internet or mobile technology in job-broking
The future role of the Internet technology compared to the mobile technology in providing
employment services and especially vacancy information raised interesting responses in theinterviews. In both countries the persons interviewed saw some possibilities for the mobile
technology, but it was not considered to reach the relevance of the Internet. The experience onmobile technology at the PES is so far rather limited, but probably for certain specific cases themobile information would be a good tool. Part-time workers were mentioned in Japan and rapid
job-broking activities in Finland. The cost of using the mobile phones was assessed to be a problem
in Finland. The amount of information limits at the moment the mobile technology in deliveringvacancy information.
In Shinjuku the mobile technology has already been tried, but it was not very successful. The
amount of information on the mobile technology is rather limited, but the PESO has not withdrawn
from this service totally. Internet is used more, a lot more information can be used then. It is also
possible to use mobile technology, like information on type of work, wage and place of work forpart-timers is possible to put through mobile phones. The Internet is used for particular purposes
and mobile for particular purposes. In the future there is a need to get more details on the vacancy
information in the Internet. Also the amount of information in the Internet is limited compared tothat of the offices. The PESO gets complaints from private sector recruitment companies, they do
not want the PESO to put pressure to their business. The policy is now that let the privatecompanies to take care of recruitment activities, this is difficult for public authorities. The amountof foreign labour is now low, but web site contacts are used a lot. An Asian cross-border network isneeded, e.g. high technology sector workers would be accepted from abroad. (Shinjuku).
In Mishima the first response was a certain frustration between these two. There is a difference inthe volume of information available in the Internet and through mobile technology. However, if in
the future the same volume of information is possible for both, then it is easier to compare these twobetter. Then it is possible to see more frequent users of the mobile media. (Mishima).

29
In Turku it was mentioned that the mobile technology is coming, but it is expensive. For some
limited target groups the mobile technology could be used, like white collar workers and highly
skilled persons. If one does not have an e- mail connection at home, but has a mobile phone, thenthis could be a solution. Also some opposite comments were mentioned like the e- mail is used
much, not the mobile text messages, but the PES has accepted a job-seekers’ announcements on
trips abroad by mobile text message. For a long time to come, the Internet technology is still far
ahead the mobile technology. (Turku).
In Helsinki the current role of the mobile technology was assessed to have a very limited relevance.
However, it would be a very good alternative in broadening the service alternatives as there are
more mobile phones than e- mail connections. It would be a perfect tool for really rapid job-broking
activities. The cost of using mobile phones was seen as a problem. (Helsinki).

4.3. Labour Market Skills at the PES

Skill demand rising from the labour market changes
This part of the interview tried to raise responses on the effect of skill demand rising from labour
market changes and taking especially the job-broking into account.
In Shinjuku area, the labour demand is great in three categories: IT, service and security branches.
IT workers are in greatest demand, but short of supply. Construction and civil engineers are also
searched for, but they are in surplus of supply. At the PESO, job-seekers fill in their job history on acareer sheet. Work experience and qualifications and licences they might have are written down.
The PESO checks specific skills of the job-seekers using a checklist, e.g. for office work computer
skills, ability to make calculations or hand writing skills are checked. The labour consultants at the
PESO evaluate further the abilities of the person. The career sheet is used to understand thecompetencies and process this data and this is developed with the emplo yers. A future challenge isthat IT would be needed to check the competencies of the job-seeker in the Internet. Then people
could evaluate their competence at home. (Shinjuku).
At the moment, the labour market is seriously affected by the economy. As the situation in thelabour market changes, skills of the job-seekers who come to PESO office may not match the skill
demands of the companies. The skills of the job-seekers can change together with the demands, butright now this is not the case. (Mishima).
In Turku the dynamics of unemployment has increased, there are many transactions into and out of
unemployment. It is necessary for the job-seekers and also a requirement of the labour
administration that the PES office knows the local labour market well. Labour market changes areassessed and considered how to take into account these changes in the customer service in practice.
It is the worst possible situation we could imagine that a job-seeker announces himself asking forjobs in his branch and we could not say anything on the situation. We have to be an expert of this30
regions’ labour market. In the job-search on one’s own, it is relevant whether the person really has
the ability to search and act on his own and is able to assess his own skills. It is not an easy task to
consider whether the person knows the skill demand of the labour market and specific companies
and whether his or her skills meet the requirements. In the Job Café companies tell about the skill
requirements they have and this is important both for the officials and the job-seekers. We send thelabour officers to visit companies which have recruited employees using employment subsidies orfrom other labour market programmes. Then it is possible to see what other needs the employer has.
Information on occupations has been produced and the Ministry of Labour has gathered it together.
At the Turku PES office, weekly labour market outlooks are produced and circulated for officials.
There is not enough knowledge on the skill requirements, the job-seekers are a relatively central
source of information in this respect. (Turku).
In the Helsinki metropolitan area there have occurred radical changes in the labour market within
the last 10 years. The most marked characteristics are city unemployment, high structural
unemployment, a very segmented structure of unemployment and a multiple number of partial
labour markets with very different unemployment profiles. Regional mobility causes that the
unemployed in Helsinki have to compete for jobs with people coming from other places. Traditional
worker occupations have been diminished and the labour demand does not match with the jobseekers, e.g. in over 50 per cent of the vacancies a tertiary level degree is required. It is common
that there are fixed-term jobs, casual work and project type of work. At the PES office both skills
related to the employer and job-seeker side of the market are needed. Multiprofessional skills arealso important. For the PES officials, knowledge on occupations and industries, ability tocommunicate, technology skills, good basic education and general knowledge, language skills andskills related to other cultures are emphasised. Employer visits are included in the duties of all
officials, but still the employers do not know the PES services properly. Proactive cooperation with
employers is of vital importance. (Helsinki).

Fundamental labour market skills in the PES work
At the Shinjuku PESO the employment situation was considered unusual as there is demand forlabour and still many people are out of work. This means that mismatch is increasing. The labour
market is also changing, new types of work and new industries appear and this kind of informationis needed. In the past PESOs placed people for jobs at construction sites and administrative jobs,
this was the majority, but not any more. Specialists, computer engineers and technical kind of work,
we do not have enough knowledge on these highly technical kind of jobs. For the sales jobs,
company people are asked to come to the PESO to explain the new jobs and their demands, wheremore use of brains is needed. The Shinjuku PESO office is developing knowledge on the sales jobs
especially. The PESO needs to know more on the changing distribution channels, there used to be awholesaler and retailer before, now some skip the wholesaler totally. Knowledge on competency
matters is needed to avoid mismatches. Also counselling skills are being developed. Lecturers fromoutside the office are needed. In the past 10 years job-seekers have developed techniques in jobseeking skills, e.g how to write an application etc. They should be keen on skills rather than how tolook like or what kind of suit to use. (Shinjuku).
In Mishima it was mentioned that the first role of the PESO is to find employment to job seekers.
To be able to do this, however, the PESO should not look so much on the Internet, but more
preferably have face-to- face meetings with job-seekers and companies who want to search for some31
suitable persons. In the Mishima area most vacancies are in the service sector. One speciality in thearea is that there are many Japanese style inns with spas and tourism is important. In the fiscal year
2003, about one fifth of the vacancies in the area were in the services, with hotels and related
business representing somewhat lower share followed by medical and welfare services,manufacturing and retail and wholesale business. The recruitment process goes usually so that thecompanies come to the PESO and tell what type of jobs are required, what are the skill demands
and what are the working hours. This and other detailed conditions on the job are put to the PESO
computers. When a job-seeker look the information on the job he or she is applying for, a PESO
official gives more information on the company and the job. After that the PESO makes a phone
call to the company to fix the job-seeker´s visit there. The PESO provides an introduction letter tothe company as well. (Mishima).
In Turku it was mentioned that at the PES office anyone must be able to say something about the
local labour market. When a new unemployed job-seeker enters the PES office, he or she is notready to discuss about the labour market before the unemployment benefit matters are first takencare of. In the initial informatio n given for the job-seeker, his own responsibilities and the role ofjob-search on one’s own are discussed. There will soon be an electronic initial information available
emphasising the job-search issues and all new job-seekers go through it. Job-search si sues arecentral and a summary of current labour market situation is also worked out. The PES officials
know well the large employers like the shipyard and metal industries and food industries, but
special branches are difficult. The PES knows the general situation in the IT sector, health care andsocial services. An individual labour official has a great responsibility for what kind of information
he or she gives to the customer. Hidden labour demand is not known to the PES, the market share of
the PES does not cover everything, but the office gets information on newspapers and using
anticipation methods of the labour market. At the PES temporary worker service there are a plentyof vacancies, the shipyard is recruiting right now, there are all the time hundreds of vacancies at thelargest companies. The Turku PES office applies a branch based working method. If it is necessary,
the job-seeker is guided to a labour force service centre providing also other services by otherauthorities as well. The job-broking is now being emphasised, previously it was the unemployment
benefit matters. With separate job-seeker and employer services within the office, good cooperation
between them is necessary. (Turku).
In Helsinki it was only added to the previous respons e that the fundamental labour market skills
consist of broadly on matters related to the labour market, recruitment, educational systems and the
problems of unemployment. This requires continuous collection of information, updating andbroadening of skills. (Helsinki).

Relevance of knowledge on various recruitment channels
In both countries the PES has a rather broad- minded orientation towards multiple recruitment
channels and giving the job-seekers and employers advice on the most effective channels. The
knowledge on the recruitment channels used by employers is on a high level at the public
employment service. A solid functioning of the labour market as a target can be seen behind the
responses given by the officials interviewed.

32
At Shinjuku office interview it was mentioned that it is very important to know companies’
different recruitment channels. As the Japanese companies give vacancies to the PESO and use
advertisements in newspapers and magazines, now they use also more private recruitmentcompanies than before. All channels have different characteristics, which is important for the PESO
official to know to carry out effective placement services. In using different channels, the Japanesecompanies consider the costs, the type of work and what kind of people they need. Also the statusof the people is decisive on what cha nnel to use, different channel is used for different parts of thelabour market. For a specialist, a head hunting company or private recruitment firm is used. For aclerical worker, they come to the PESO. For a salesperson, an add to a local paper or PESO isapplied. Each private recruitment company has its own strengths in one part of the labour market.
The PESO gives advice for the employers on the most effective recruitment method. The PESO
cannot do everything, sometimes it is better for the employer to go to a private company. Also whenthe economy gets worse, more people come to the PESO and vice versa. Now more people arecoming to the PESO and companies stop putting newspaper advertisements and they also come to
the PESO. The Shinjuku PESO also visits companies to get vacancies. In the various regions therecruitment channels are also different. In Tokyo, PESO use is rather low, but in rural areas it ishigh as there are no private recruitment companies. (Shinjuku).
If there would be more variety of recruitment channels it would be better. From the PESO´s point ofview it would be best if the PESO services were the most effective for the job-seekers. The more
information there is available for the job-seekers, the better they can be served. The office provides
information to job-seekers on recruitment channels and also things like the values of companies
who offer jobs to individuals. (Mishima).
The PES officials at Turku said that they present at the Job Café service all channels and vacancies
including the private competitors of the PES. In the job-search training given for the job-seeker, allchannels are introduced. Companies’ web based job-search machines and recruitment channels are
all presented to the job-seeker, this happens already at the initial information phase. Some time ago,
newspapers and note boards were the central means. All methods increasing the labour market
dynamics are applied. The Turku PES office has managed to keep a reasonable market share. They
also give the job-applicants information on web sites, but are practically unaware whether they areused or not. (Turku).
This matter is essential and belongs to a quality customer service. At the initial information and jobsearch training all the recruitment channels are introduced, including the private competitors andprivate sector temporary work agencies. Knowledge on these issues makes the labour market work
more effectively and makes the job- finding to take place earlier. For the PES this broadens skills
and abilities to carry through job-broking activities. (Helsinki).

Relevance of being aware of recruitment problems
The idea of this question was to hear responses on the relevance of being aware of recruitment
problems in the implementation of employment services.

33
Successful placements are analysed every month at the Shinjuku office. This aims at better
placements. For last month, the main reasons for not being successful in placements were lack ofability on the applicants’ side and the inadequate skill level on the employers’ side. Japanesecompanies screen applicants based on e.g. work history and then the applicants are given a job
examination. Many are rejected if they do not know how to write papers. The PESO uses career
sheets and check lists for skills and they learn what is happening in reality. Based on that, the officecan modify its guidance. For labour market mismatches there are several causes like wages, hours
of work and status of worker like part-timer. The Shinjuku PESO applies group work for those
applicants who were not successful, about 30 job-seekers discuss together what went wrong withthe recruitment as one labour official chairs these discussions, but gives no advice. Those who
failed in interviews are given simulation interviews and those who made a wrong choice are given
vocational counselling. Group work which takes usually half a day gives people a possibility tothink what went wrong. For the PESO, this is a rather work intensive method as these groups areorganised every week. The office wants to make the job-seeker to realise the shortcomings and whatwent wrong. To win a battle you need to know the enemy, this applies to recruitment as well. You
need to know yourself first to be successful and university students do not know this. (Shinjuku).
In Mishima the response to this question is that when the office provides placements to job seekers,
some are recruited and others are not. With the latter group the office tries to find out why they
were not employed by the companies. Probably there were some skills required which did notappear on the requirements of the company, but they existed anyway. The employer did not botherto put such information on a piece of paper. This information is utilised for the future jobseekers sothat the office knows this next time and the job-seekers can get the job. Sometimes there is missing
information on the requirements, skills and necessary techniques on the vacancy information.
(Mishima).
This is an essential matter. If the PES knows that e.g. there will be no applicants it advices theemployer to launch a training project where the PES can participate. Recruitment problems areconnected to the planning of the labour market training. It is important to give information and also
apprenticeship training is a good thing here. A list of problem vacancies has been updated and there
have been discussion on that at the PES. Occupations with inadequate matching are found in thehealth care sector, construction business and metal industry. Targeted training projects are rather
rapid, but if larger problems are faced there is a training delay. If the education or training foundadequate is of longer duration, it is not necessarily directly suitable for labour market training.
(Turku).
To be able to react according to the situation as soon as possible, this is a matter of utmost
importance. Training measures were also mentioned at the Helsinki PES. One problem is that thesituations may change even within a short period of time. Partially because of this the national
employer survey information is not very useful at the local level. The interviewed persons
emphasised the role of the PES employer visits as a relevant source of information in recruitment
problems. (Helsinki).

Future considerations for labour demand and supply

34This issue aimed at raising responses on the future labour supply and demand factors andadditionally also what this knowledge was based on.
Generally the labour demand is dependent on the state of the economy and this is difficult toestimate, but the labour supply is more predictable. There is an ageing society in Japan, the birthrate is going down and the number of senior workers will increase. Population statistics was
mentioned as a source of knowledge on these issues at the Shinjuku PESO. In the long run it cannot
be predicted, but in the short run there is more demand for workers. There is also mismatch becauseof lack of normal jobs. People want to be hired directly by companies, not by intermediaries placing
them into the companies. This new type of employment is present in the construction sector already,but also in the services sector these types of intermediaries are emerging. It is the PESO’s job tofind people stable jobs. Another big challenge is to create jobs for retirees, who are eager to work
even after the age of 60 but there are not many jobs for these people. In 2004, a new law for
employment for elderly people was adopted. Jobs should be available to the age of 65 because thepension age was risen to 65 years. The age limit should be abolished, this is something we ask theemployers to do. The employment rate is going down, this is a big challenge. Women are a big
resource. In the short term the employment rate is going down and there is a need to better matchdemand and supply. In Japan the current unemployment rate is considered to be high, it is notpossible to be optimistic if employment is going down. Job placement capabilities need to be build
up. (Shinjuku).
In Mishima the so called “2007 issue” was mentioned when those large cohorts who were born at
the post war period are in the mandatory retirement age. Japan is in scarcity of labour. In the
manufacturing sector, technology is advancing with mechanisation and computerisation and causedby this, companies are probably not recruiting so much. The PESO tries to put some old people whohave already retired back to work. Forms of work are more diversified in these days, here especiallydispatched workers and persons working on contract basis were mentioned. Also more part-timeworkers will be seen. The PESO is rather concerned on the insecure position of these workers.
(Mishima).

The prospects appeared to be of rather similar nature in Turku. The role of the large age cohorts andreports on the ageing in the region gives a rather straight picture what is happening. People leave
for retirement and the labour administration has to cooperate with educational institutions and theemployers, it cannot solve these problems alone. Statistics and coordination groups (with social
partners and educational institutions) was mentioned also as a source of information and also as away to solve the problems. Most of the solutions to these problems are of educational nature, also
immigration and especially work-oriented immigration can increase the labour force. Temporary
workers from the Baltic states has become more common after the enlargement of the EU. There is
the structural unemployment and labour demand whic h do not meet each other. Considering thepossibilities to train people among the structural unemployment they are probably quite marginal.
The number of new entrants into the labour market is very limited and more effective education
periods can only affect with a delay. A number of health care sector workers left this region and thecountry in the 1990s, but now hospitals go recruiting these people back from other parts of thecountry and from other Nordic countries, this is quite peculiar. The employers are used to getting
people who are ready for the job, there will be a change in attitudes that also the less skilled people
will be recruited. This situation puts pressure on the PES as the employer requires training andtailor- made solutions which may transfer the responsibility on the company’s personnel training

35
partially to the public authorities’ side. As mass dismissals happen, replacement should start before
the unemployment. (Turku).
Forecasting is difficult, there are different developments. As to ageing, it is important when people
do really leave for retirement. Care work, social and health sectors, private services and finance areamong the increasing branches, there is demand for educated labour. Globalisation and international
developments like immigration was also discussed by the interviewees. At the Helsinki PES theknowledge base of the statements was found in statistics, studies, employers’ information, fillingthe vacancies and the PES information system, forecasts and personal experience. (Helsinki).

4.4. Main similarities and differencies in technology and skills

Summary of the interviews
The interviews are summarized in the following two tables presenting the main outcome for eachinterview theme. As similarities are marked in bold, the remaining part is differences. As theinterviews are reported into detail above, these summarising tables are not explained more here.
Table 6. Job-broking technology profiles in Japan and Finland (similarities marked in bold)Japan

FinlandRole of the Internet in generalon job-broking services

rapidity, can deal with large
quantities

wide use, PES helps to findinformation, large quantities,
PES can redirect own resources

Effect on PES web services

open access, selectivity inusing, efficiency, local
vacancy information easy touseefficiency, flexibility,
selectivity in applying, newjob-seekers report themselves
by web, employment services
well-known, interaction withcustomers important

Future role of the Internet inrecruitment of labour

more users , large and small
companies differ, graduate
market in Internet, needs of theindividual must be listened

increasing relevance,companies own web sites may
limit the role of PES

Future role of the Internet for
PES services

PES one among others ,helpful for NEET, vocationalcounselling in the future,access via PC or mobile

PES one among others , PES
can gather information together
and helps to use all channels,
vocational counselling andeducational information in theInternet is a strengthInternet or mobile technology
in job-broking

mobile has been tried with nosuccess, in the Internet moreInternet far ahead for a longtime, mobile limited info,

36
information, if more
information by mobile possible
then could be compared better,part-timers´ vacancies bymobile possible

mobile for some target groups
like white-collar or highly
skilled, very rapid recruitment
by mobile, more mobile thanInternet connections, mobile
expensive, some mobile use

Table 7. Labour market skills profile at the PES in Japan and Finland (similarities marked in bold)Japan

Finland

Skill demand rising fromlabour market changes

IT needed to check skills via
Internet, skills may not matchto demand

occupational information
important, not enoughknowledge on skills, PES
makes employer visits,
multiprofessional skills, many
new demands for PES
personnel

Fundamental labour market
skills in the PES work

mismatches, counselling skills,
new kind of work andindustries, face-to-facemeetings preferable to Internet,
not enough knowledge on
skillsPES must know the labour
market situation, job-searchissues, education, recruitment
and unemployment broadly

Relevance of knowledge on
various recruitment channels

important issue , manychannels used and they havedifferent characteristics,
information on channels
given, advice also on private
recruitment companies

essential matter, all channels
presented, also privatecompetitors to the PES
presented, all means used toincrease labour market
dynamics

Relevance of being aware of
recruitment problems

placements monitored, skills
essential to problems,mismatches caused by demandside often, all skills notpresented as requirements

highly important matter toreact soon, list of problem
vacancies updated, training
measures or education
important, situation changes
rapidly, employer visits
important

Future considerations forlabour demand and supply

ageing society, supply
predictable, scarcity of labour,jobs for retirees needed,
diversified forms of work is aconcern and a cause ofageing society, immigration,
globalisation, education, also
the less skilled will be
recruited

37
mismatches

Making another kind of comparison is to discuss whether there are similarities between themetropolitan areas on one hand, and on the other, between the other cities´ areas. In this sense theinterviews are not thorough enough to make real comparisons possible, but certain preliminary
findings can be discussed. In the role of the Internet in general it was mentioned in both
metropolitan areas that it he lps to deal with large quantities, but this was not mentioned in the other
cities 49 . Similarly, the efficiency aspect seems to be more closely related to metropolitan labour
market. One more regional theme was the role of the PES which was more emphasised in the PES
interviews of the regional cities. Also the quality of vacancy information was considered more in
the regional interviews.
This outcome is something which could be expected. In the large metropolitan labour market, thelabour market actors do not know each other, but they must solely rely on the available labour
market information. The role of the Public Employment Service is also more limited in
metropolitan areas as many private actors also operate there. In the more regional type of labour
market it is common to be more deeply connected to the local and regional actors and to emphasise
their role more.

Have the hypothesis been verified?
In the first chapter of this study, two hypothesis were set especially for this interview part. The first
hypothesis was that job-broking technology is on a high level in both countries, but the way thelabour market function and recruitment takes place are different. The second hypothesis on thequalifications of the PES personnel is that there are some similarities e.g. in applying thetechnology, but the market and administrative environments also set different requirements.
As to the first hypothesis, it is evident based both on literature and the interviews that the jobbroking technology is on a high level in Japan and Finland. In both countries Internet is widely
applied in recruitment activities and also some mobile phone applications exist. Information
systems at the PES are highly developed. Vacancy information is based on open access with some
limitations for a share of the vacancies, which is based on the employer´s request. Based on theliterature and statistical part of the study and the interviews, the labour market seems to function indifferent ways between Japan and Finland. The main differenc ies are the Japanese life- long
employment pattern in large corporations and large annual new graduate recruitments, which
phenomena do not exist in Finland. The Japanese mid-career market and the operations of small andmedium-sized companies resemble most the Finnish labour market, where more short-term demand
factors are important. However, in recruitment there are also some similarities especially as torecruitment channels, but taken as a whole, the differencies are more evident in terms of reasons for49

see appendix 2 for the estimation concerning web filling method at the PES based on Finnish microdata. It shows thatweb filling is most probable in the main cities and large companies are more likely users of web filling method. In
Japan also large companies use the web method most.

38
recruitment and the channels used. The first hypothesis can be verified based on this. This meansthat technological similarities and labour market differencies were found.
The second hypothesis seems also generally possible to be verified, but the overall picture is more
complicated. As the technology has many similarities, also applications are based on same
restrictions and possibilities. The labour market sets different demands for the PES personnel inskills related to recruitment, but there are also similarities. The mix of the labour market skills isdifferent between the Japanese PESO and the Finnish PES, but many similar ingredients can befound. In both countries it is highly relevant to know the recruitment market and the skills of thejob-seekers. In both countries the PES visits employers to know the skill demands and to get new
vacancies. One difference is the scope of applying solutions based on Internet technology. In Japan
there was an aim to be able to use the Internet for skill tests and vocational counselling, which has
already been taken into use in Finland. An important policy difference is that in Japan the PESO
concentrates on placement, vocational counselling and benefit issues, but in Finland the active
labour market policy programmes are directly in the decision- making power of the PES. The
relevant labour market skills in the Finnish PES include also broad knowledge on education andtraining issues, which is also a solution to many labour market problems.

5. Conclusions and Policy Recommendations
Japan and Finland share an ageing 50 society, which has many consequences for the labour market.
Especially older workers are more and more important for both societies. Here Japan is a realbenchmark with extremely high employment among the aged labour force. For the problem of the
scarcity of the labour force, the Finnish high female labour force participation in full- time work
could be a benchmark.
The recruitment market is overall more lively in Japan compared to Finland. The way the labour
market function differs from each other in many important respects. In Japan, the labour market canbe divided into new graduate market and mid-career market on the one hand, on the other into large
companies´ market and others. In Finland the labour market cannot be divided in this way. Moreshort-term demand side factors affect recruitment in Finland than in Japan. In both countries,
unemployment is considered one of the major problems and both countries need a GDP growth of 3
per cent to make unemployment to remain constant. Atypical kind of work has become morecommon with the Japanese concentrating especially on part-time work and the Finns in fixed-term
contracts which are also common in Japan.
The role of the Public Employment Service (PES or PESO) is different between the countries. In
Japan, the PESO concentrates on placement, vocational counselling and benefit issues, as theFinnish PES has much broader duties besides these, e.g. in organising large labour market training
and subsidised employment programmes and various employment services. In Japan most of theresources of active labour market policy are devoted to the PES, but this is not the case in Finland.
The Finnish PES has much better staff resources in relation to relevant labour market phenomena

50

for Japan, see OECD (2004)

39
than the Japanese PESO. The market share of the PES of recruitment is also higher in Finland. The
Japanese PESO seems to consider its position in job-broking being more in between the job-seekers
and the employers, as in Finland this traditio nal role seems to be changing more into the directionof promoting direct contacts between the job-seekers and employers and providing information on
recruitment and job-search channels.
Internet technology is applied effectively in both countries in job-broking activities. Especiallyvacancy information is easily available in the Internet, it has a great number of users and makes thelabour market and recruitment more efficient. The Internet services are, however, applied on
selective basis at the PES with different parts of the labour market having different recruitment
mechanisms. The PES is one actor among others in providing web services, but it introduces all
vacancy information channels to the job-seekers and recruitment channels for the employers. The
mobile technology could possibly be used more in job-broking if the amount of information would
be larger. In this sense the Internet is still far ahead the mobile technology in job-broking. SomePES services can utilise mobile text messages. The labour market authorities interviewed named
different target groups as possible users of mobile technology in each country. Mobile technology isat the moment more like a future possibility for certain job-broking activities, where still a large
amount of rather detailed information is necessary. The base of the job-broking technology is thesame between Japan and Finland and also the authorities mentioned some similarities in every issue.
Still, the user and applier profiles differ.
In labour market skill issues the differencies are more clear and the similarities were rather limited
between the countries. There is not enough knowledge on skills at the PES, the authorities wereacquainted with mismatch problems caused by skills, the recruitment channels were introduced tothe job-seekers including the private actors in this area. The PES officials monitor placements also
in both countries. These were the similarities mentioned.
The differencies are discussed throughout this study, but one of the most important labour market
policy implications of the differencies indicated in the interviews is, that the Japanese PESO has
rather limited possibilities to deal with mismatch issues or recruitment problems, they have toconcentrate mainly on improving placements and taking advantage of vocational counselling. The
Finnish PES officials do have multiple policy measures to act with when mismatch problems or
recruitment problems are faced. The most important measures behind job-broking is labour market
training where planning, participant selection and cooperation with employers is in the hands of thelabour authorities with educational institutions usually taking care of the training itself. Also otherselective employment measures like subsidies for companies recruiting an unemployed person arelargely applied in Finland. So far, these kind of possibilities have been rather limited in Japan andthe possible actions taken are therefore of lighter nature than the scope of options in Finland.
For the Finnish PES and the employers, there is probably one good lesson in recruitment affairs tolearn from Japan. The rather clear division of recruitment channels depending on the type of job andthe part of the labour market in question seems to work effectively, the actors know the relevant
channels quite well and as indicated in this study, there is more multiple use of recruitment channels
in Finland. Only one of these channels can be effective, in other words, there is excess cost in
recruitment in Finland. Also, the intensive multi-phased recruitment process consisting of several
interviews of the new graduates in Japan could be an interesting lesson for the recruiting Finnish
employers.

40This study has tried to systematically discuss job-broking issues on a comparative perspective
between Japan and Finland. The study is limited to the main aspects, but even there somedifficulties in the comparisons were faced. The statistical part has been documented as carefully as
possible, because even macro statistics is rather different and a possible source of misinterpretations.
In the interview part, the method was otherwise similar, but in Finland both management and thosereally implementing the job-broking services participated in the interviews, in Japan solely the
directors of the PESO offices were interviewed. Because of this, there were together nine peopleinterviewed in Finland and two people in Japan. Misunderstandings and inaccurate notes is also arisk in the interviews in Japan, however, it is a minor one as the draft report has been checked by aJapanese researcher who also attended the interviews. It is difficult to go further with this kind ofcomparisons between countries, but it would be worth trying in the future.

41

References
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in Europe and Japan. JIL Report No 12, The Japan Institute of Labour, Tokyo
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Active Labour Market Policy Reform – The Second Wave, Final Report, European Commission –DG EMPL – Peer Review Programme of the EES, OSB/IES, Vienna; also: http://www.peerreviewemployment.org/pdf/finland%2004/HCO_FIN04.pdf .
Raisanen, H. (2005); What Kind of Job-Broker is the Public Employment Service? Evidence from
Finnish Job Vacancy Microdata in 2002-2003. VATT-Discussion Papers 352, Government Institutefor Economic Research, Helsinki (also available at www.vatt.fi)
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Secretariat, Ministry of Health, Labour and Welfare, Japan, Tokyo43

Tana, J. (2004); Enhancing the Performance of the Philippine Public Employment Service Office(PPESO): Drawing Lessons from Japan´s Public Employment Security Office (JPESO) (2004)
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44

Appendix 1.

Interview questions for the Representatives of the Public Employment Service inJapan and Finland
Japan: The Hello Work Shinjuku PESO office in Tokyo (10.3.2005) and The Hello Work
Mishima PESO office (18.3.2005)
Finland: PES office of Helsinki (15.2.2005) and Turku (3.2.2005)

1. Skills Related to Technology
How would you consider the effects of the general development in technology and the Internet on
your work and the implementation of the job-broking services?
What is the effect of the web services provided by the Public Employment Service on your workand the implementation of employment services?
How has the guidance of job-seekers and the employers in applying the web services affected yourwork?
How would you consider the future role of the Internet a) in the whole recruitment of labour b) fromthe point of view of the Public Employment Service and its services?
What is your opinion on the future role of the Internet technology compared to the mobile
technology in providing job-broking services, especially vacancy information?

2. Skill Demand Rising from the Labour Market and its Changes
What is your assessment of the skill demand rising from the labour market changes taking
especially the point of view of the job-broking into consideration?
Please assess what you consider as the elements of the fundamental skills in the labour market (e.g.
demand for and supply of labour, different educational systems, the structure of the plants in theregion)?

45
What is your opinion on the relevance of the knowledge of various recruitment channels in theimplementation of the job-broking services?
And what is the relevance of being aware of the recruitment problems in the implementation of thejob-broking services?
How do you consider the future developments in the demand for and supply of labour? What isyour knowledge based on?
Persons interviewed for this research
Finland
Turku PES office (3.2.2005)
Mr. Pasi Ristila, Department Director
Mr. Esa Koskinen, Web Advisor
Ms. Jaana Apiainen, Branch Director (Deputy Director of the office)Ms. Eeva Kumpula, Department Director
Helsinki PES office (15.2.2005)
Ms. Rebecka Svedlin, Director of the office
Mr. Tom Ahlgren, Deputy Director of the office
Ms. Sisko Nopanen, Labour Advisor
Mr. Jyrki Sippala, Labour Advisor
Mr. Ismo Yla-Rautio, Labour Advisor
Japan
Hello Work Shinjuku PESO office, Tokyo (10.3.2005)
Mr. Tadao Mizutani, President (Director) of the PESO office
Hello Work Mishima PESO office (18.3.2005)
Mr. Ryoichi Sugiyama, President (Director) of the PESO office

46

Appendix 2. Logit estimation for web filling method at the PES in Finland in 2003, twomodels (see also Raisanen 2005, 35)
Model 1
(1=webfilling)
B, Sig.
(S.E.)

Exp(B)

Model 2(1=webfilling)
B, Sig.
(S.E.)Exp (B)filling delay (yes)-0.05(.105).947-.694 ***(.086).499

n. of vacancies (more than 1)-0.04(.094).962.191 ***(.048)

1.211

job assignment (yes)-0.78 ***(.195).458-.885 ***(.092).413

job announcement (yes)0.08(.085)

1.081.104 *(.045)

1.110

working time (other than day work)

0.89 ***(.084)

2.442.594 ***(.044)

1.811

job duration (less than 3 months)

0.49(.098)

1.633.085(.056)

1.088

job type (other than wage work)

0.24(.151)

1.268-.650 ***(.090).522

education specified (yes)-16.06(576.3).000-2.751 ***(.502).064

open vacancy duration (22 days or
more)

-0.18
(.104).839

n. of personnel (max. 20)

0.25 *(.100)

1.281.198 ***(.057)

1.218

n. of personnel (200 or more)

0.41 ***(.116)

1.510

1.131 ***(.060)

3.098

filled with PES applicant (yes)-17.91(178.1).000

statistically urban (yes)1.29 ***(.156)

3.646.911 ***(.081)

2.487

recruitment duration (34 days or
more)-0.57 ***(.105).567

10 main cities (yes)2.00 ***(.123)

7.416

1.794 ***(.063)

6.015-0.68 ***(.150).507-.983 ***(.088).374

recruitment problem occupation
PES (yes)

1.40 ***(.089)

4.071

1.197 ***(.046)

3.309

Constant-6.27 ***(.190).002

N
percentage predicted correct

60,59599
5424,755.5

recruitment problem occupation
StatFin (yes)Cox & Snell r2, %Nagelkerke r2, %log likelihood-6.413 ***(.098)
107,26998
4
21
18,601.8

.002

47

Appendix 3. UV curve for Japan based on survey statistics in 1990-2002

V%

7

6

1991
1990

5

1992
4

3
1993
2

1994 1997
1996
1995

1

1998

2000
19992001 2002

0
0

1

2

3

4

5

U%

6

The unemployment – vacancy curve above is calculated based on Survey on Employment Trends,
which represents the whole economy. The vacancy statistics behind the figure indicates the numberof active job openings minus placements, i.e. unfilled vacancies.