2022 Market Recap and 2023 Predictions

Quo vadis Japan’s tech industry?

In our last live stream, we asked Uros Cavic, Team Leader of our back-end engineering team, about his insights on technical roles in Japan. We covered topics like hiring trends, open positions, salary ranges and work cultures.

If you want to watch the full recording of the live stream, visit our Youtube channel.

If you are looking for a job in software development, data science or machine learning, get in touch with us.

Layoffs and Recession in Tech

Globally there have been several waves of layoffs throughout the tech industry, how has this played out in Japan?

There is a lot of uncertainty in the market right now. Nobody really knows what the following months will look like and whether we are heading into a severe recession or not. 

As for the lay-offs, what we are seeing in Japan is mainly international companies laying off people globally, including their subsidiaries or offices in Japan. A lot of these employees are foreign engineers who tend to work for international companies instead of Japanese companies because they have lower requirements for Japanese language skills.

In general you can say that Japanese companies are more stable because they are more risk averse. They don’t hire as much when things go well, so they have more leeway when things get tight.

What’s the outlook for foreign engineers coming to Japan?

In my opinion we are still at the very beginning of this. We will see more layoffs happening in the following weeks and months. 

We are also witnessing that more and more companies are looking for Japanese speakers when they hire engineers, at least a JLPT N3 level. For a long time engineers weren’t required to speak Japanese as long as they could code well enough. And of course this is still true for the best in class developers but generally speaking the trend goes more towards hiring engineers who can speak some level of Japanese.

There are a few companies that are actively building an international work environment and these companies are still hiring foreign engineers without any Japanese but it’s getting less and less. 

So I would suggest people to actually learn Japanese if they want to work here, even as an engineer. 

Hiring Trends

What were some of the recent hiring trends you have been seeing?

It was actually similar to the beginning of the pandemic. A lot of companies were focusing on hiring back-end engineers. In good times companies hire a lot of front-end and user interface engineers to build out their products and make them nicer but in times of crisis companies need their products to function well. That’s why they hire more back-end people to focus on the functionality of the product. This is probably the biggest change I have been seeing recently. 

Are there any particular industries that are still doing well?

Yes, there are always industries that are more affected by economic downturns than others. In Japan, I can see that payments, e-learning and gaming will be strong in the foreseeable future. 

What kind of positions and industries does your team at Wahl+Case cover right now?

The biggest portion is back-end engineers. But we also cover a lot of data related roles like data engineers, data analysts, data scientists and machine learning engineers. Then we have infrastructure, DevOps, SRE positions as well as product managers and project managers. We also work with engineering managers all the way up to CTOs.

Regarding industries, we work with clients in payments, gaming, e-commerce, AI, and more. We actually have a lot of AI clients and they hire a lot of engineers from overseas because good AI engineers are hard to find in Japan.

Can you identify any trends in terms of what positions are in-demand right now?

I have seen an upsurge in data scientist and machine learning positions in the market. Companies collect an ever increasing amount of data and thus they need to create more models to predict all kinds of outcomes for their businesses. That’s an area will explode over the coming years, especially in Japan.

Any other positions that have the potential to grow in 2023?

I’m seeing a lot of agile coaches entering the market. A lot of project managers and engineers are getting certified as Agile Coaches. So I think this will become big in the near future but maybe not as early as this year. A lot of the really good agile coaches don’t speak Japanese so they are having a hard time getting into big Japanese companies to change their organizational structure. So if you’re an agile coach with good Japanese skills, that will open a lot of doors.

Conversely, have you seen any positions that are fading out a little bit?

I wouldn’t say fading out but it’s very common these days to be a front-end, back-end or full stack engineer. Ideally you have something on top of it, that differentiates you from the others; like a back-end engineer with a strong infrastructure experience for example. You should always expand your skills.

Salary Ranges for Technical Positions

Can you tell us a bit about salary ranges for technical positions in Japan?

First of all, Japan’s tech salaries are lagging behind those of other industrialized countries, especially when compared to the US. For the past 4 years or so salaries have been fairly stable, maybe increasing a little bit.

To give some concrete numbers, back-end engineers with 0 to 3 years of experience will get 4 to 6 million Yen on average. For engineers with 3 to 7 years of experience, this can go up to 6 to 9 million yen and senior engineers can make more than 10 million yen.

However, right now the market is tight and there are not many companies that can pay big salaries. There are layoffs happening and companies are much more conservative. We are seeing a lot of good foreign engineers in the market who are willing to take a pay cut to get a job and stay in Japan. 

Do you see any trends for this year regarding salary ranges?

I would say it will be fairly stable with a slight increase, like pretty much anything in Japan. 

For people thinking about moving to Japan, what are some of the benefits of working in Japan? 

This is my personal opinion but it’s an amazing country. It’s clean, people are polite, great public transportation. On the other hand, cost of living is high in Tokyo (where most of the tech jobs are), especially fruits and vegetables (laughs).

So you should do your research and due diligence before deciding to move to Japan.

Work Culture in Japan

Last but not least, let’s talk about work culture. Japan is notorious for having a terrible work environment. But then the pandemic has introduced remote work and flex time on a large scale. How do you see the work culture for technical people?

Most people I speak to prefer a remote first or hybrid work environment. They enjoy the perks of remote work but also like to meet other people and socialize every once in a while. 

From a company’s perspective, with the pandemic seemingly coming to an end, a lot of companies shifted from full remote to a hybrid style with 2 or 3 days in the office per week. I still see remote only companies but I believe a lot of them will make the shift to hybrid work soon. 

On the contrary, there are also companies without any remote work and a lot of employees are unhappy with that. For employees this is one of the main factors when choosing a job right after salary.

Thank you Uros. How can people reach you if they are interested in finding out more about working in Japan or what positions you currently have?

The easiest way is to connect with me on LinkedIn. I’m always happy to talk to people and share my experiences. If you’re not on LinkedIn, you can also email me at uros@wahlandcase.com 

Watch the Live Stream Recording

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