### Chapter 2 Trend and issues of human resources management in company Section 1. Changes in the market environment and influence on labour market

In conjunction with the development of technical revolution including globalization and IT (information and communication technology) and increase in the uncertainty of management, the management environment surrounding businesses is changing in a considerable and rapid manner.

As the influence of globalization, after checking the influence of increased ratio of overseas production on employment as well as the influence of overseas competitions on employment through trading, it was confirmed that the former has no big influence on domestic employment volume, while the latter may greatly decrease employment in the fields of fibers and timber/wooden products that Asian countries have competitiveness. It is pointed out that the technical revolution including IT may change occupational structures. However, in the period from 2007 to 2012, regular employment decreased in all occupations except for professional and engineering and non-regular employment increased in occupations other than manufacturing process which showed a decrease. Moreover, the ratio of professional and engineering workers is higher and the ratio of manufacturing process workers is lower in occupations with a higher IT capital-labour ratio. The uncertainty of the market increased after the financial crisis and this greatly affected the companies' demand of part-time employment as personnel expenses became variable. On a corporate level, various workers are used depending on the competition environment in which companies are in.

In this way, as the use of human resources in companies change, it is necessary to motivate various human resources to work and link them with business growth.

## (Influence of globalization on labour market)

Influence of globalization on the labour market can mainly be considered from two directions. In recent years, technologies of developing countries are rapidly advancing and the management of industries that manufacture goods with price competition and labour-intensity are facing a severe situation. If these goods spread in the domestic market through import, the added value of domestic companies that manufacture goods of the same types will decrease and this might result in the loss of employment.

On the other hand, although replacing domestic production activities with overseas production activities affects employment, the influence is uncertain. For example, increasing overseas production ratio by separating the production process to a country with lower wages will directly replace domestic production and put an adverse effect on domestic employment. However, even if production activities are done in overseas countries, they will encourage economic activities in Japan through the shipment of capital goods if they are to take overseas demands. This will not cause loss in domestic employment, or may rather increase.

## (Added value of industries with lower international competitiveness decrease, causing great loss of employment)

Figure 23 shows trends in the "import penetration ratio" (ratio of import against domestic production by industry) concerning international competitiveness in the manufacturing industry. Industries with a high increase rate of import penetration ratio are manufacturers of textile mill products, manufacturers of timber/wooden products/furniture and electric machinery and apparatus. If import goods penetrate the domestic market, they will directly impact on production activities in industries that manufacture goods of the same types. As shown in Figure 24, industries with a higher import penetration rate have less added value. According to Figure 25 that shows the influence of decreased added value on the number of employees, industries with significant decrease in added value have a less number of employees.

Figure 26 indicates that, in the period between 2000 and 2010, the number of employees decreased by approximately 2.32 million in the entire manufacturing industry. Manufacturers of textile mill products, manufacturers of timber/wooden products/furniture, manufacturers of other products including steel, printing and leather, and manufacturers of electric machinery account for 70% of the decrease in the whole industry.