Winners / Selection Rationale

en-japan inc. the Job Advertisement Department

2019 19th Porter Prize Winner Online recruitment services
en-japan operates an online advertisement service through its "en TENSHOKU” jobsite. The company’s primary income source is the advertising revenue generated by its job posting service website. However, en-japan’s highest priority is not: (1) the selling of advertisements; (2) the number of applications; or (3) the number of new recruits. Rather, en-japan wants to help job seekers find satisfying jobs. Finding the right match increases the likelihood that the newly placed recruit will remain with the new employer for a long time. en-japan focuses on finding full-time positions for young candidates (under age 35) who are already working full time. The company seeks to place candidates in new positions at small and medium-sized companies (SMEs). The company’s goal is to arrange long-term employment for its job-seeking customers, mainly young, inexperienced workers. To achieve this goal, en-japan must avoid making any mismatches, which is not easy. en-japan conducts interviews with each hiring company, writes a report, and provides access to an online review site that carries both positive and negative comments. Even after the candidate has begun working at the new company, en-japan makes available to these customers a follow-up support program that is free for the first three years. Customers can choose from three optional follow-up services.
This report has been written by Professor Emi Osono based on: (1) the materials submitted by the winner for Porter Prize screening purposes; (2) interviews conducted by the Porter Prize Organizing Committee; and (3) publicly available information. It is being published with the winner's permission.

Background Information about the job advertisement market in Japan

img_2019_02_p1.jpg The market for job placement services comprises: (1) job advertisement service (both online and print), (2) employee referral agency services, (3) temporary employee (temp-staff) placement services, and (4) contractors that provide outsourcing services. (*12) Job advertisement services, by providing relevant information, help to match job seekers and hiring companies. Employee referral service providers offer job seekers the following support: career counseling services; an evaluation of skill levels; and the introduction of hiring companies. Temp-staff placement service providers dispatch their own temp-staff employees to the hiring companies. Usually, the temp-staff worker is dispatched for a fixed period of time, specified in advance by the client company. Some service providers hire temporary staff only for the period specified by the client company. Other service providers hire temp-staff workers under indefinite-term contracts, and dispatch them for a specified period of time. Temp-staff workers can be dispatched to various different clients, one after another. The client company manages the temp-staff workers. However, the contractor is responsible for employing and managing any workers that are dispatched to the client company. In such case, the dispatch worker is assigned to a specific job, one that requires a specialized skill set. Of all these services, the majority of job seekers use the job advertisement (online) services.

The size of the market for job advertisement services was 857 billion yen (US$7.8 billion) in fiscal year 2017, up 7.2% from the previous year. (*13) Job advertisement service providers use media such as print advertisements, websites, and social network services. The adjacent job advertisement market, which includes content aggregators and social media recruitment, came to 105.5 billion yen (US$964 million), marking an increase of 76.1% from the previous year.

Some job advertisement websites focus on a particular industry or specialty, while others aim for broader coverage. The former includes IT engineers, engineers for the manufacturing industries, the creative industries, the IT and web industries, and startups.

The price for an advertisement is about 100,000 yen (US$900.00) per posting at the low end. At the high end, the price is about 600,000 yen (US$5,475.00) per worker, with payment contingent on the successful placement of a candidate. The market in the middle price range is the largest, and covers a broad variety of industries and skill sets. The companies in this segment tend to depend on advertisement fees as their main source of income.

(*12) According to the definition provided by the Japan Association of Human Resource Services Industry. http://j-hr.or.jp/aboutmarket/market/ (in Japanese), accessed on November 25, 2019.
(*13) Association of Job Information of Japan, January 7, 2019, Zenkyukyo News Release (in Japanese), accessed on November 25, 2019.

Unique Value Proposition

en-japan's Job Advertisement Department helps job seekers find jobs mainly through online job advertisement services. The company's value proposition is unusual because of its commitment to helping job seekers find satisfying jobs. The standard practice in the industry is to focus either on the number of applications or the number of new hires. By focusing on achieving job placements that result in high customer satisfaction, en-japan increases the likelihood that the newly placed recruits will remain at their new companies for a long time and play an active role. The difference is that en-japan views the job seeker as a primary stakeholder. If a newly hired recruit is not happy in the new job, that person will likely quit and look for the next job. Although this would result in higher advertisement revenue for the company, en-japan does not take advantage of such an opportunity.

Regarding the recruits, the company mainly targets individuals in their twenties. The job seekers are relatively inexperienced workers hoping to find employment in an unfamiliar industry or in a new job category. en-japan's other target customer is small and medium-sized companies (SMEs), which in this case are the hiring companies. The company has selected SMEs as its target customer because en-japan believes that it can add value for these companies. In Japan, about 30 % of newly hired graduates quit their first company within three years. So, the market size for job seekers in their twenties is not small. However, young job seekers usually do not have a clear vision when it comes to finding a new job. en-japan is able to add value by providing truthful and detailed information about the hiring companies and the jobs being offered. SMEs often do not have dedicated staff to handle the hiring process. As a result, these companies lack know-how about recruiting. en-japan is able to advise SMEs about hiring practices. Also, it is important that the newly hired recruits stay with the SME, and actively contribute to that company's operations. Because the SME's workforce is relatively small, the contribution made by each individual employee really counts.

Although the company's advertisement fee is more expensive than the fees charged by competitors, the company's job placement rate is also much higher. (*14)
(*14) According to en-japan.

Unique Value Chain

The unique features of the Job Advertisement Department's value chain are: (1) the development of a job advertisement website; (2) sales of advertisements, (3) the creation and posting of job advertisements; and (4) follow-up services for job seekers for the first three years after gaining employment at one of en-japan's client companies.

Development of the job advertisement website
The company's design policy is to cater to job seekers, rather than to hiring companies, even though the hiring companies are paying for the advertisement. Websites that appeal to job seekers can attract more applicants. A higher number of applicants is very beneficial for the hiring companies. Accordingly, the company works to provide useful information for job seekers. en-japan provides reliable and detailed information about the hiring company. It includes negative feedback, the type of information that might make job seekers think twice about applying for such a position (i.e., claims about how tough the work is, details about the type of worker who is not suited for such a job, etc.). The website is linked to a rating site operated by en-japan. Here, current and former employees can post both positive and negative comments about the hiring company. Meanwhile, the hiring companies are invited to post their own comments, informing job seekers about the ways in which they are improving their operations, as well as their plans for future improvements. en-japan endeavors to provide honest and detailed information because it is committed to decreasing the gap between the job seekers' expectations and the reality of the work situation. If the gap is too large, chances are high that the worker will leave the company within a relatively short period of time.

en-japan offers only one advertising plan. The company offers a standard-size advertising space, which carries a uniform amount of information. This is a unique approach, because so many advertisement services will charge a higher fee for a larger space and make more information available. The reason behind this approach is en-japan's belief that companies with large advertising budgets or aggressive hiring practices are not necessarily the best companies for job seekers. en-japan posts the latest job openings at the top of its website. This allows job seekers to learn about unfamiliar companies. The website offers a search function that indicates the worthwhileness of a particular job (i.e., the benefits of a specific job, and the recipient of such benefits). In this way, job seekers are able find companies they would not have considered before conducting a job search.

Attracting job seekers
en-japan places advertisements on television, as well as on trains, buses and subways, and in train and subway stations. en-japan uses advertisements to attract more job seekers to its website. The company has used the same tagline since 2001: "Cherish your current job, and think hard before changing jobs."

Sales of advertisement space
The company holds seminars for SMEs on topics like job interviewing methods, ways to improve the recruitment process, and human resource management strategy for creating an organization imbued with a growth mindset. The company operates another website that provides support to the HR managers at SMEs. This website, which is called "en Jinji No Mikata" (lit. translation, "Your Ally for Human Resources"), focuses on mid-career recruitment. Members receive weekly online newsletters containing information about seminars, as well as Q&As addressing issues pertaining to HR practices.

The company's sales staff propose solutions that include education and evaluation services (not only the "en TENSHOKU" jobsite) because it believes that a well-integrated approach to employment, education and evaluation (the company's "3Es") is necessary for effective human resource management. The evaluation service includes aptitude tests that can be used for hiring, job assignments, and follow-up services. As for educational services, the company offers a flat-rate training program, known as "en College."

Creation and posting of job advertisement
en-japan does not outsource the interviews of hiring companies. The company's own employees conduct these interviews. Interviewers work with the HR managers of hiring companies, helping them to clarify job description details and improve the candidate selection process. en-japan also gives advice on ways to improve the procedures for orienting newly hired workers and integrating them into the hiring company's operations. In addition, the interviewers will create a short video clip, about 15 seconds long, introducing the hiring company. Job seekers say that they find such videos to be informative.

The company's copywriters create advertisements, based on the information gathered by the interviewers. The company provides in-house training for all its copywriters.

Follow-up services
After an advertisement is posted, the sales staff contact the hiring company to find out how the application and selection processes are going. The sales staff will provide advice, as necessary.

After job seekers start working for a company, the hiring company can give the new employee a monthly survey, to determine his or her level of satisfaction with the new job and monitor for early signs of a possible departure. Surveys are conducted using en-japan's web-based tool, the "HR OnBoard" app. The company recommends that specific steps be taken to provide support to employees who indicate a high likelihood of leaving the new company in the near future. This service, which is free-of-charge, was launched in February 2019. So far, the average survey response rate has been about 80%.

Human resource management
The company hires those people who resonate with its mission of having new employees play an active role in their new companies. The company has created an in-house list of required qualifications for the consultants in charge of hiring. It offers more than 350 kinds of lectures, all aimed at helping en-japan employees to upgrade their skill-sets and gain a better understanding of their capabilities. The remuneration reflects the employee's abilities rather than the individual's job performance.

Fit among Activities

en-japan's Job Advertisement Department selects and implements activities that support the company's core choices: (1) Encourage job seekers to embrace the goal of becoming real contributors in their new companies; (2) provide high-quality services to customers; and (3) develop services that are designed specifically for job seekers. The Job Advertisement Department's activities include interviewing all the hiring companies; providing truthful and detailed information about the hiring company and the job being offered; training a team of copywriters; linking the online jobsite to the rating site; posting the latest advertisement on the top page; offering job seekers follow-up services after gaining employment; and undertaking direct sales. (Please refer to the activity system map for en-japan's Job Advertisement Department. The activity system map appears at the end of this report.)

Innovation that Enabled Strategy

  • Defined the business goal as helping job seekers to cultivate the mindset of becoming a real contributor in their new company, rather than merely seeking to maximize the number of job seekers placed in client companies.
  • Commitment to telling the truth about the hiring companies and the jobs being offered, making honesty a priority.
  • Makes available to client companies free-of-charge a recruitment support tool (the "engage" app).
  • Makes available to client companies free-of-charge the support tool "HR OnBoard," which assesses the employee's "risk of departure."

Trade-offs

  • en-japan does not put a priority on sales. The company's primary goal is to have job seekers become real contributors in their new company, and remain at that company for a long time.
  • Does not recommend impulsive job changes.
  • Does not forward applications to large companies with large advertising budgets.
  • Does not link the size of the advertisement to the size of the client company's advertising budget.
  • Does not carry advertisements from clients that are not committed to the truthful disclosure of information.
  • Only takes orders from client companies that allow their HR managers to be interviewed.
  • Does not offer discounts except during special campaigns. At campaign time, discounts are available to all clients.
  • Only hires people who agree with en-japan's corporate mission, and who possess the mindset to become a real contributor in their new companies.
  • Does not adopt a remuneration system that provides significant incentives for increasing advertisement sales.

Consistency of Strategy over Time

The "en TENSHOKU" jobsite has its origin in Japan's very first job information site, the "en EMPLOYMENT NET," created by Nihon Brain Center in 1995. en-japan inc. was established after the Digital Media division was spun off from Nihon Brain Center in 2000. In those days, job advertisements appeared in print media, and the available space was limited. As expected, companies willing to pay more for their advertisements were allocated a larger space. Companies with smaller budgets could get only the smallest advertisement, measuring one-sixteenth of an A4-size sheet of paper. Small ads provided minimal information, namely the type of work contract, the occupational category, and details regarding employment benefits. Job seekers were hesitant to apply for such positions, given the limited information. The other concern was that they might apply, but not get hired, possibly due to a mismatch. Because en EMPLOYMENT NET was on the internet, it could enjoy limitless space. Since the beginning, en-japan has been interviewing HR managers at the hiring companies, and has been providing a uniform amount of detailed information. The company deviated from standard industry practices by developing copywriters internally and selling advertisements directly, rather than through agents.

Since its establishment in 2000, en-japan has been using the tagline, "Cherish your current job, and think hard before changing jobs." The company wants job seekers to find the right job, and play an active role in their new companies. This desire is what has spawned the company's mission: To arrange jobs for candidates who will become real contributors, even though they may be new employees.

In 2002, en-japan made a commitment to include "truthful" (in other words, negative) information about the hiring company, and mention drawbacks about the job being offered in order to ensure that the candidate's expectations about the job will be realistic. The aim is to avoid a mismatch in hiring. It really is important to minimize the gap between the information being made available to job seekers through job announcements and the reality of the position in question. en-japan has augmented the information it provides to job seekers by including the "worthwhileness of the job," and "challenges faced on the job." The company also provides (1) comments made by the staff who conduct the interviews (offering a view of the client company from an objective perspective), and (2) a short video clip to give job seekers a look at the actual work environment. These were both firsts in the industry.

When the job advertisement market contracted rapidly in the wake of the economic downturn in 2008, en-japan changed its strategy. Its new target customers became more experienced workers. Furthermore, the company introduced changes that made the client companies the primary stakeholder. Such changes included making its fees contingent on the successful placement of candidates. When the market started to recover, so did its competitors, but not en-japan.

In 2014, when the company reconstructed its jobsite, en-japan changed its strategy again, this time returning to its earlier approach of making job seekers its primary stakeholder. The company's target customers are (1) young job seekers, and (2) SMEs. Accordingly, en-japan has selectively developed the services necessary for enabling job seekers to become real contributors in their new companies. Specifically, en-japan has developed candidate screening criteria and selection criteria. Moreover, the company offers follow-up support, to ensure that the newly hired individual will stay in the new job and play an active role in the new company. The company has allocated resources to extensively train an in-house team of interviewers. The company makes sure that all client companies are interviewed by en-japan employees.

There was a slight deviation from this strategy when the market entered a prolonged economic contraction. However, the company has maintained its core strategy of having en-japan employees conduct the interviews of HR managers at client companies since the beginning. Another core consistency is to offer job seekers high-quality services, taking into account the job seekers' needs. Based on this foundation, the company went one step further to create its current unique strategy, by adding various supports after hiring, including follow-up support for individuals who have successfully gained employment, and helping them to fulfill their goal of becoming a real contributor in their new company. The other unique feature of en-japan's competitive strategy is the recent decision to focus on both young job seekers and SMEs as target customers.

Profitability

he five-year averages for the return on invested capital (ROIC) and the return on sales (ROS) of en-japan's Job Advertisement Department exceeded the industry average by a wide margin. (Profitability analysis was conducted by PwC Japan.)
Profit

エン・ジャパン株式会社 中途求人メディア事業部の活動システム・マップ

Activity System Map

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