JPRI Working Paper No. 85: March 2002
Women in Japan’s Temporary Services Industry
by Charles Weathers

Japan’s temporary services industry reflects the rapid transformation of the nation’s white-collar workplaces over the past decade as firms have changed hiring and personnel practices to reduce labor costs and raise productivity. Large Japanese firms traditionally preferred hiring students directly from school and training them in-house, although only the men were expected to remain long-term. This mode of training, although time-intensive, was practical in part because the wages of young workers under the (partly) age-based wage system (nenko joretsu) were low. Women performed mostly routine tasks and were said to be the “flowers of the workplace” (shokuba no hana), supposedly brightening the environment for male workers. They were usually expected to quit by their mid- to late twenties, before they could start to earn significant seniority-based pay increases. Women re-entering the workforce after marriage tended to work as low-paid part-timers (paato) rather than as regular employees, creating an age-based as well as a gender-based division of labor.
Employers and government leaders in Japan have hailed the temporary service industry as a vital means of promoting labor mobility and responding to demands, from working people as well as businesses, for flexible work styles. However, critics charge that temporary services merely provide a new means of holding down pay and benefits. It is clear that many employers today are using temps to take the place of full-time employees to save on pension costs and make layoffs easier. The temporary services industry also reflects the prevalence of gender segregation and age discrimination in Japanese workplaces, since almost 90 percent of registered temps are women, and companies usually refuse to hire temporary workers over 35 years old.
Non-regular workers, including paato, contract workers, and temps (haken rodo-sha), have increased rapidly over the past decade and now account for an estimated 27.5 percent of Japanese employees. The majority of non-regulars are paato, but while agency temps (haken rodo-sha, also translated as dispatch workers) are far fewer in number, they afford an opportunity to examine how changing labor market conditions are affecting female non-regular workers (and hint at what lies in store for more men as employment safeguards deteriorate). Employers are placing greater importance on sokusenryoku—the ability to be immediately productive—and nearly all temps have relevant previous work experience. Fear of unemployment also motivates many of them to work hard and improve their skills. As in other countries, companies often evaluate temps as prospective regular employees.
The Temporary Worker Laws
The temporary service industry was banned after the war, although some industries have evaded the law since the early 1950s. These have been primarily manufacturing industries, notably steel, that have engaged the services of nominal subcontracting firms that simply sent their workers to the client firm’s plants (the common-sense definition of an agency temp is a worker supervised directly by the client firm’s managers). A temporary service industry serving white-collar and service-sector businesses slowly began operating in the 1960s, but it existed in a legal gray zone until the industry was legalized by the Temporary Worker Law (TWL), which took effect in April 1986.
The TWL served in part to help companies circumvent the Equal Employment Opportunity Law, which also took effect in April 1986, by making it easier to shift full-time women to non-regular status. In theory, the original TWL was supposed to prevent companies from using temps to replace regular workers by restricting them to just ten (some sources say thirteen) specified professional jobs—a number that was gradually increased to 26. However, employers often classify office jobs as “filing,” one of the approved occupations, regardless of the actual job content, making a sham of the supposed core principle. (A personal friend once temped in sales but was classified as a market researcher, another of the approved occupations.)
Years of campaigning by business and government led to the passage of the Revised TWL, which took effect December 1, 1999.  The revised law replaces the “positive list approach,” which allowed temporary workers to work only in approved occupations, with the “negative list approach,” which allows them to work in all but five specifically prohibited occupational areas: dockyards, construction, security, nursing and other medical fields, and manufacturing. In fact, it is an open secret that there are numerous thinly disguised temps in manufacturing and in nursing as well (although this article deals only with legally approved temps). The revised law has had little impact on office temps, who account for most of the temporary workers, since the original law’s categories were already routinely evaded. Other supposedly major changes brought about by the revised law were the establishment of a one-year limit on temporary assignments and stronger rules to protect temps. These too have been largely ineffective. The law also includes a maze of special rules, such as exemptions for elderly temporary workers, supposedly to help them find jobs.
The demand for temporary workers has grown steadily since 1994, but the entrance of hundreds of new firms into the industry has generated fierce competition and helped hold down pay rates and agency commissions. It is difficult to determine precise numbers, but in 2000, there were believed to be about 1,200 temporary service firms (TSFs) in Tokyo, which accounts for 60 percent of the national market. By the end of 2001 this number may have shrunk to 300 as a result of bankruptcies and mergers. Many TSFs are in-house firms (moppara-gaisha), meaning that they are subsidiaries that dispatch workers primarily or exclusively to their parent firms. These are illegal, since their main purpose is to provide temps in place of regular workers, but companies can easily evade the law by, for example, printing advertising brochures or otherwise making nominal efforts to attract new clients.
The clients of temporary service firms tend to be large companies because small and mid-size companies find that temporary workers hired in this way are too expensive. The temporary service industry is dominated by about ten large firms, including Pasona, Adecco, Manpower Japan, and Tempstaff. Pasona is Japan’s largest TSF and has recently joined the ranks of the country’s high-profile firms. The company legend is that President Yasuyuki Nambu founded it in 1976, while a fourth-year university student, after becoming frustrated by rigid hiring practices during his own job search. Pasona managers take an aggressive free-market stance, demanding that the government fully liberalize the labor market and chiding companies for not entrusting their hiring to temporary agencies. Pasona is both innovative and controversial. Its training programs and efficient personnel practices probably serve temp interests, and one of its subsidiaries has begun placing Japanese in positions in China, helping people who wish to work overseas or who have lost their domestic jobs. However, some observers argue that Pasona’s aggressive practices drive down wages and working conditions and skirt around the law by manipulating worker classifications (often to help clients avoid paying social insurance contributions). 
The main reasons companies use temps are to fill in for absent staff or to respond to business fluctuations, and to reduce labor costs. Pressures to reduce labor costs in service-sector industries have increased steadily since the mid-1980s and became especially intense from the mid-1990s. The cost of a temporary worker doing basic office work often differs little from that of a regular worker in his/her twenties performing the same tasks. The actual total pay is roughly the same as that of other office workers in their mid-twenties, and the agency fees may largely offset the savings on non-wage costs such as bonuses, social security, and health benefits. However, the use of temps can reduce the cost of personnel administration and make job recruitment much cheaper and more efficient. It costs clients virtually nothing to place an order for temps with a company and the Internet has helped make personnel searches fast and effective. The temporary service firms also perform screening functions forbusinesses by eliminating unsuitable applicants and helping the suitable ones to prepare for interviews.
While almost all regular workers have (until recently) received scheduled, largely age-based, raises, temps rarely get significant wage increases. One informant estimates that a temp earns about what a 27- or 28-year-old regular employee makes. A manager for a prominent company said his firm has stepped up the use temps because regular female employees have become stubborn (ganko) about quitting work once they pass the age of 25, when their wages and benefits would begin to rise significantly. Moreover, almost all temps are experienced—with few exceptions, the TSFs consider only people with at least one year’s relevant work experience.
Profile of Japan’s Temporary Workers
There were probably about 300,000 persons actually working as temporary employees (toroku-gata haken rodosha) in 2000. It is unlikely that this number has increased much, although the number of persons registered with agencies exploded to a reported 1.39 million in 2001. There were another 175,000 “regular” temporary workers, mostly men with specialized skills in areas such as software development. They are employed by their agencies as regular salaried employees, while registered temps are paid only if and when they are on assignment. In 1999, registered and regular temporary workers combined were said to account for about 1.1 percent of the workforce, and 3.9 percent of all non-regular workers. However, newspaper articles usually wildly overstate the number of temps because they conflate the number of persons registered with agencies with those actually working. Similarly, there are many firms with licenses to be TSFs, but apparently few actually dispatch workers.
While the absolute number of temps is small, they are demographically and geographically concentrated. Women accounted for close to 90 percent of registered temps through 1999, and they work primarily in service sector industries in large urban centers. A widely cited survey conducted in 1998 by the Tokyo municipal government (hereafter the Tokyo Survey) found that 50.3 percent of temps were 25 to 29 years old, and a further 26.8 percent were 30 to 34. This is largely because companies usually refuse to hire temps over 35. The vast majority of registered temp assignments have always involved routine office work. Of the temps who responded to the Tokyo Survey, 41.4 percent were registered as file clerks and 40.5 percent as office equipment operators. The other main categories include accounting-related work, receptionist, parking attendant, and document processing (especially for trading companies). During 2000, the proportion of male registrants rose considerably at some firms, but it remains low. Many temps are educated only to high school level, although the proportion of university-educated temps rose significantly from the late 1980s onward. This may reflect the demand for rising skill levels, especially in information-technology fields, or the problems even the college-educated were having by the late 1990s in finding entry-level jobs. 
People who temp by choice usually emphasize life-style over work or careers. The attractions of temporary work include the ease of the job search, regular work hours (generally without overtime or holiday work), clearly defined responsibilities, freedom from obligations such as socializing with co-workers, and the freedom to stop working to pursue other interests, such as foreign travel. Some people temp in order to sharpen their skills or to support themselves while they continue to search for more desirable permanent jobs or pursue alternative careers in areas like music. Even the relatively low 1,600-or-so yen-per-hour rate for basic office work (in Tokyo) is substantially better than the 800-900 yen that paato and side-job (arubaito) workers generally earn. Some informants knew of numerous women who turned down full-time job offers to continue working as temps. By temping, workers can avoid the stigma the Japanese attach to quitting regular jobs too soon or too often. Although the job tenure of Japanese women has been lengthening, many still quit (or are forced to quit) upon reaching the age of 24 or 25 (an age often regarded as a milestone for women) to spend time traveling or pursuing other interests. The development of temporary services has greatly eased life for many such women since TSFs perform the time-consuming tasks of gathering job information and arranging interviews.
Though some people temp by choice, the number of so-called involuntary temporary workers has been rising for several years. Some 37 percent of the respondents  to the Tokyo Survey said that they could not find a suitable regular job. Some informants believe that the proportion of temps who would prefer to be regular employees is much higher than surveys indicate and that survey results indicating a high preference for non-regular work are misleading. Whatever the benefits of temping, many women probably choose it because the gender barriers to pursuing real careers or earning substantial incomes are so high.
Placing and Protecting Workers
In 2001, I interviewed managers and coordinators at eight TSFs (the large firms Pasona and Manpower and six small and midsize firms), and two persons (a labor law professor and a community union official) actively involved in assisting troubled temps. Managers and coordinators must coordinate their tasks effectively, but they tend to view industry conditions quite differently. The managers, who negotiate contracts with client firms, tend to be upbeat. They rarely fault client firms, although most acknowledge that temporary workers suffer discrimination. The coordinators screen applicants and work closely with the registered temps. They typically handle up to one hundred active temps at a time and must deal with the problems the workers encounter—or cause. In contrast to the managers, three of the four coordinators I spoke with were critical of the client firms, saying that they usually emphasize cost-cutting over productivity and worker well-being.
The four coordinators I interviewed work for small and midsize TSFs in central Tokyo. The firms (all pseudonymous) are Clerical (which dispatches about 100 workers), Tech (200), Ginza (400 to 500), and Upscale (500). The Upscale coordinator was the most positive. Her relative optimism may reflect her firm’s clientele, mostly large firms and foreign firms, which seem to emphasize quality of personnel over cost cutting. In addition, foreign firms in Japan seem to be much more inclined than Japanese firms to respect gender equality.
In Japanese TSFs, the standard practice is for Business Department (Eigyobu) representatives or the manager (usually a man, and sometimes called eigyoman) to visit clients directly, discuss the job(s), and assess the working environment. He must also clearly inform client firms about his own firm’s procedures, and accurately communicate the client firm’s needs and work environment to the coordinator(s). Although managers’ and coordinators’ perspectives on business conditions may clash, good communication between them is essential to the smooth operation of temporary agencies. The coordinator, after interviewing and evaluating applicants, has two basic tasks: matching (assigning) workers to jobs and following up workers on assignment. Matching persons to jobs requires making judgments about intangibles, especially personalities, as well as actual skills. Following up involves dealing with any problems or complaints, whether by temps or clients. Coordinators also provide some degree of career counseling, especially on upgrading skills. The demands of properly placing temps and then following up create considerable stress, and many coordinators quit in less than a year. Since most office temps are women, it is widely believed that most good coordinators are female or else men (especially young men) who get along well with women.
The three most important factors involved in placing temporary workers in Japan are job skills, experience, and ningen kankei (personal relations or social skills). Japanese generally believe that personal relationships are important to performing jobs satisfactorily and achieving personal job satisfaction. Some managers and coordinators say that the Japanese prefer wet (uetto) workplace relationships rather than the dry (dorai) relationships favored in the West. When managers assess the workplaces of prospective client firms, they try to determine what kind of person would fit well as a temp—someone talkative (oshaberi) or quiet (otonashii), and so on. Similarly, surveys indicate that temps are very concerned about whether they will feel comfortable in workplaces, and that poor personal relations are a leading cause of terminated assignments.
TSFs give prospective temps tests on their personalities as well as their skills. One goal is to identify personal characteristics such as seikakusa (accuracy) that relate to competency, so they can dispatch people who not only know the basic skills but also work quickly and accurately. Some firms, including Pasona and Upscale, increasingly use the English term human skills in place of ningen kankei, but according to Clerical’s coordinator, it still mainly means the worker’s personality (seikaku). Politeness, cheerfulness, and perseverance are all highly valued personal attributes, but perhaps most important is flexibility, in terms of being able to adapt to new workplace environments and get along with new people or groups. Upscale’s coordinator believes that personal relations have become even more important recently because so many people have become adept at computer work and English. Therefore, she believes, agencies find it harder to differentiate their staff on the basis of skills and instead emphasize their temps’ personalities when soliciting clients. Despite this, there are frequent disparities between the ideal of good personal relations and the reality of temp work.
Many temps are concerned with the status attached to their jobs because it can influence marriage prospects. Speeches at wedding dinners in Japan still dwell at length on a person’s work experience and career prospects. As a result, coordinators say, many women want to land the highest-profile job possible, either by working for a well-known TSF like Pasona or by being placed in a prestigious large company, and they often accept lower pay in order to do so.
The coordinators were at times surprisingly critical of the temps. They believe that many younger women who would prefer to be regular employees simply fail to search diligently for regular jobs. The coordinator from the Clerical firm stated that many temps could not work without supervision and constantly pestered her (often via late-night phone calls) with minor complaints or threats to quit assignments. The more upbeat Upscale coordinator said she had seen a steady increase in the number of temps who take their jobs seriously, but also in the number who do not try very hard or soon want to quit. She was not sympathetic to complaints about rough rush-hour commutes, a standard occupational hazard in Tokyo.
It is illegal for client companies to interview prospective temporary employees but this rule is routinely ignored. Clients interview almost all prospective temps, even for short-term jobs, before deciding whether to employ them. Coordinators usually accompany the temps to their interviews. The Tech coordinator said this is a kindness for persons who are young and inexperienced, and that it is important to be supportive when they do not get the job. Typically, the client contacts seven or eight agencies, considers the work experience, age, location of residence (partly to avoid long commutes), and school record of the initial applicants, and then selects three women to interview. Experience, age, and attractiveness of appearance are the most important factors, although the one that matters most varies by company. There is an economic angle as well, since the TSFs in effect are bidding against each other when they send applicant information and rates to the prospective clients.
Most coordinators and managers believe that interviewing is useful because workers usually want to get a feel for where they might work and might feel uneasy about walking into a company about which they knew nothing. The Ginza coordinator said that interviewing allows both sides to meet and reduces the risk of bad matches. He tells his people that they should judge as well as being judged. The preference for interviewing is an indication of the importance placed on personal relations.
The nature of the interview process and the relatively long assignments for temps suggest that Japanese employers place less emphasis on short-term flexibility than American employers do. American temps are frequently under pressure to report to assignments on very short notice, but in Japan it generally takes seven to ten days to get a temp into a job after it is posted, even with e-mail speeding the process of notifying workers about job openings.
The Representation Problem
The Japanese legal and regulatory framework does not encourage the TSFs or  their coordinators to protect temps effectively. The main concern of most TSFs is to stay in business, which usually means not pressing misbehaving client companies and not irritating the Ministry of Labor (which was merged into the new Ministry of Health, Labor and Welfare in January 2001). Many union officials believe that the law does not clarify the responsibilities of either the TSF or client firms, leaving temps vulnerable to harassment or arbitrary firing. Some of the temps commenting in the Tokyo Survey expressed frustration with their agencies’ inability or unwillingness to support them.
Japanese employers seem to be able to pressure women into changing from regular to non-regular employee status, although the acceptability of such practices probably varies by industry. (Recent news reports indicate that men have also become vulnerable to such practices as the economy has worsened.) When the original Temporary Worker Law was passed, many regular female employees were induced by their companies, especially banks, to become temps in their employers’ newly-established in-house TSFs. Whether or not the companies “forced” the women to change statuses is murky, but some people believe that they probably gained the women’s acquiescence by threatening to subject them to the long work hours and mandatory transfers faced by regular male employees. Such conditions are virtually impossible for mothers, and even regular women employees who perform the same work as men may therefore not receive comparable promotions. According to the Clerical manager, personnel relations at in-house TSFs are poor because they lack the independence from parent firms to protect their temps properly.
Major unions are reluctant to undertake the admittedly difficult task of organizing non-regular workers, but a number of activists and small local unions specialize in assisting them. Two small organizations, Tokyo Union, a so-called local or community union, and the mostly web-based Rodo Haken Nettowoku (Labor Dispatch Network), have achieved a degree of minor prominence for assisting temps. Tokyo Union and some major unions, including Rengo, the main national labor federation, have established or have considered establishing their own TSFs in order to encourage unionization and curb problems such as contract termination.
Temps often face a “triple punch” of discrimination on the basis of gender, age, and status. Despite the Equal Employment Opportunity Law, gender segregation is still common in Japanese workplaces, and this is reflected in the temporary work force, which is overwhelmingly female. Both TSFs and their clients frequently hire temps based on their appearance and age. Tokyo Union’s Shochiro Sekine says that a company once dismissed a temp who showed up for work with a bandaged arm on the grounds that she was unsightly. Most coordinators agreed that the larger the company, the more likely it is to pick a younger, more attractive woman. Smaller companies have less margin for luxuries like pretty but low-skilled women.
Female temps over 35 are rarely hired. I often heard the expression “35-year-old wall” (sanjugosai no kabe)—although the Ginza coordinator said the cut-off age was probably more like 32—and sarcastic critics say that there is a 35-year-old mandatory retirement age (teinen) for temps. A representative of one mid-sized TSF told Asahi Shinbun that many clients request women who are in their twenties and unmarried, and that they were often made to work as tea-servers. Tokyo Union official Noboru Takai says that agencies tell temps once they are about 35 that there is not much work and refuse to renew their registrations. According to the Clerical coordinator, the ideal office temp—from the point of view of a typical client—is a woman 23 to 26 years old who has two to three years’ experience at a single company. Working at more than one firm, she said, might be a good way to improve one’s skills, but managers tend to regard it as “sort of promiscuous” (uwaki-mitai). Apart from their appearance, one reason companies tend to prefer young temps is that they are easy to order around. The maximum age a client sets for temps often depends on the ages of the rest of the client’s employees, since the firm’s managers fear that regular women workers will feel uncomfortable giving directions to temps older than themselves. The Ginza coordinator observed, however, that clients usually state an age limit even for jobs where people work alone. A few TSFs specialize in placing older workers. Although older workers earn low pay and sometimes possess desirable skills, their placement rates are low, partly because many companies refuse even to consider them.
The Revised Temporary Worker Law, uniquely among Japanese labor laws, prohibits age-based hiring of temps. Unfortunately, the regulation has proven ineffective. Client companies typically evade the regulation by asking for “the youngest possible worker” or otherwise stating their preferences indirectly. The TSFs themselves frequently state age preferences when advertising. This does not violate the law because, technically, they are not recruiting temporaries, but rather people to be dispatched as temporaries. The fundamental problem in Japan is that age-based hiring is legal for all employees except temps.  It is also routine. A 1999 Japan Institute of Labor survey found that 90.2 percent of companies impose anupper-age limit on new hires, with the average limit being 41.1 years of age, and just 35 years for general clerical positions, secretaries, and software engineers. Highly skilled persons are, of course, less subject to age discrimination, but skills alone do not guarantee employability. Many information-technology workers believe they face an age limit of around 40. The manager of Specialist, which dispatches only skilled professionals, said that his company’s temps, male and female alike, could rarely get jobs after the age of 35.
Seniority- and age-based pay is commonly cited as a reason for age limits. In addition, it is a mantra among Japanese managers that people have much greater difficulty learning workplace skills as they get older. The Clerical manager, for example, stated that the 35-year-old wall exists because people do not learn new skills readily after that age. My interviews and the surveys together suggest that there are both social and economic reasons for age discrimination, and that they are probably mutually reinforcing.   
All the coordinators and most of the managers agreed that temps suffer the stigma of low status. The Ginza coordinator stated that client companies’ employees tend to treat temps as people with whom they need not interact (kankei no nai hito) or whom they can make do anything. Companies frequently do not allow temps to use facilities such as company cafeterias; the Ministry of Labor, although lacking statutory authority in this area, has urged them to grant access. One woman who worked as a temp for about ten years starting in 1987 said that even her employed friends looked down on her, although she worked regularly and earned roughly the same income they did. This reflects the traditional value placed on holding a full-time job and demonstrating long-term commitment.
Some comments by temps in the Tokyo Survey suggest that client firm managers do not take responsibility for temps. Temps complained about working in isolation or being given inadequate instructions or information. One female file-clerk in her thirties wrote, “In the company where I was working, I suffered a lot of nasty harassment from a regular employee. When I complained, the supervisor acknowledged it 100 percent but . . . said that the employee was backed by the union so he couldn’t lift a finger.”
Low status makes temps potentially vulnerable to sexual harassment, but the extent and seriousness of the problem are difficult to gauge. The coordinators noted that different women have greatly varying opinions about what they consider offensive. The Upscale coordinator did not regard sexual harassment as a common occurrence, but acknowledged that her firm had occasionally terminated contacts with firms that failed to resolve problems. Pasona maintains a department that specializes in dealing with sexual harassment complaints, no doubt relieving its coordinators of significant stress. This is one way in which the large TSFs seem to use specialization to raise efficiency. Small client firms are widely believed to be the worst sites of sexual harassment, as their managers often act with little restraint.
Most harassment probably takes indirect forms such as creating an unpleasant or threatening work environment with lewd or suggestive language and e-mail messages. The most common form of direct harassment seems to be unwanted or deceptive invitations (like invitations to “parties” where an unwitting temp discovers that she is the only “guest”) or repeated requests for phone numbers. Several informants believe that sexual harassment is becoming a less serious problem in Japan. If so, it undoubtedly stems largely from a new consciousness promoted by activists and new government policies that have made seku-hara (sexual harassment) one of Japan’s high-profile social issues. The Revised Temporary Worker Law includes a provision that makes client companies responsible for taking steps to prevent sexual harassment (as does the Revised Equal Employment Opportunity Law, which took effect in April, 1999). The provision by itself probably means little but, more importantly, it is one result of a broader campaign that has also brought the mandatory establishment of anti-sexual harassment resource centers in large companies.
Terminations, Temp-to-Perm, and Time Limits
Discrimination is unpleasant, but the greatest concern for most temps is how long they will be employed, assuming they can get an assignment. Most TSF coordinators concurred with critics that contract termination is common. Tokyo Union established a hot line for troubled temps in 1991, and officials say that 30 to 40 percent of the complaints since then have been about contract termination. Sekine claims that “structural defects” in the Temporary Worker Law allow client companies to fire temps, who are indirectly hired through TSFs, more easily than workers they hire directly, including paato. A common reason given for dismissals is “does not fit the atmosphere” (funiki ga awanai) or something similarly vague. In contrast, TSF managers generally claim that clients rarely terminate contracts without good reason. Some 57.1 percent of the temporary agencies responding to the Tokyo Survey said they had experienced clients releasing temps before their contracts expire, but 65.8 percent of that group stated that a common reason was that a temp’s skills were not commensurate with the position. Coordinators believe that such reasons are often excuses to dismiss unwanted temps. Clerical’s coordinator, for example, stated that client companies often establish work quotas to provide a means of justifying dismissals. Client companies are required to provide one month’s notice of dismissal to temps or to pay one month’s wages to prematurely terminated temps, but they can avoid doing so by (at least nominally) justifying the dismissal. Alternatively, managers may pressure unwanted temps to request early termination.
On the other hand, in the interviews I conducted at TSFs, several interviewees said that there are more cases of early quitting by temps than of contract terminations by clients. Managers tend to emphasize those that are justified (a typical example is a woman who quits because her husband is transferred). When the reasons are deemed frivolous, coordinators may devote considerable time and energy to persuading temps not to quit assignments in order to protect an agency’s reputation for reliability.
Further clouding the issue is the common practice of hiring temps to evaluate them as potential regular employees. This was in theory illegal until December 2000, when introductory temporary work (shakai yotei haken) was legalized, but the real issue is that the clients usually want to avoid paying the fee required for hiring temps as regular workers (the standard TSF commission is 30 percent of the worker’s first year‘s wage). A client may therefore dismiss a temp—often, of course, with the temp’s connivance—in order to rehire the person on the sly. Advocates of market-oriented employment practices have hailed introductory temporary work—more commonly called temp-to-perm—as a means of improving the functioning of the labor market. Proponents of labor market deregulation frequently claim that “mismatches” between supply of and demand for skills, or between particular workers and jobs, are a major source of unemployment. Thus, the logic goes, temp-to-perm will improve matters by allowing workers to get a feel for particular jobs, and by allowing employers to observe and evaluate the temps. It is too early to judge, but since client firms can already use temping as a de facto job screening process and seem highly averse to paying agency fees, it appears unlikely that introductory temporary work will increase significantly.
Japanese temps hold assignments considerably longer than their Western counterparts. That is a plus for most temps, although it reflects the widespread but unadmitted practice of hiring temps to replace regular workers. While the overall length of assignments is rather long—considerably longer than in Western countries—the individual contract periods have been getting shorter. Six-month and one-year contracts used to be common, but three months may be the most common length at present. Companies are opting for shorter contracts in order to be able to release workers rapidly in response to business fluctuations, or to be able to dismiss unsatisfactory persons quickly. Accordingly, some companies use one-month contracts to begin with. Many temps are agreeable to short contracts at the start of assignments when they do not know whether they will feel comfortable in their new workplaces. However, shorter contracts mean more job insecurity, especially for temps over 30.
Managers of TSFs complain that the revised law’s limit of a one-year maximum for temporary assignments has discouraged the use of temps. They may be right, but if so the problem exists only in newly approved occupations such as sales. For the 26 occupations approved before 1999—covering virtually all female temps—the time limit continues to be three years. It is believed that some client companies probably release temps within a year to avoid any possible legal hassle—an example of how the law is probably hurting some persons it is supposed to protect. But for the most part, the time limit is disdained and often ignored, by temps and client firms alike. Occasionally, companies use temps for years on end. One reason they do so rather than hire them as regular employees is to avoid disrupting the permanent staff structure in what would be the equivalent of a mid-career hire.
Perhaps the most frequent complaint by temps is that the actual content or working conditions of a job differ from the client company’s description. Some coordinators and managers think that in many cases the real underlying problems are that the work does not meet the temp’s expectations, which may result from communications failures by managers of either the agency or the client, or because the temp holds unrealistic expectations. A Pasona manager stated that the problem occurs most frequently with client companies new to using temps, and largely disappears as the clients learn more precisely to communicate their needs.
When problems arise, coordinators, managers, or outside troubleshooters generally try to resolve matters quietly. In the case of a real (but non-dangerous) sexual harassment complaint, for instance, coordinators and even troubleshooters may encourage the worker to stick out (gaman) the remaining period of the contract. Women are often told that they cannot afford to be labeled complainers if they want to continue getting new assignments. Some believe that there are blacklists of temps. This is unconfirmed, but the Ministry of Labor has published notices emphasizing that blacklists are prohibited, which is a good sign that they probably exist. Tokyo Union sometimes engages in collective bargaining to get satisfactory settlements, most commonly in the cases of contract termination and sexual harassment. The union often takes up the two as a “set” since temps who complain about sexual harassment frequently find themselves dismissed. The settlement for unjust dismissal is payment of the balance of the contract or quick placement in a new job; for sexual harassment, it includes apologies from both the TSF and client firm (including the relevant supervisor), plus payment of remaining wages (from the TSF) and damages (from the client). Tokyo Union’s Sekine claims that the union settles all cases of sexual harassment that it presses. Others, more pessimistic, believe that few cases are satisfactorily resolved.
Protecting personal information is growing into a major employment controversy. Traditionally, employee personal information has been treated as the property of Japanese employers, but concerns about problems such as sexual harassment have prompted unions and critics to demand new policies. They claim that Japan does not meet OECD standards for protecting workers’ personal information, and that temps are often forced to provide unneeded confidential information, particularly about vital statistics and bank accounts. It is a serious offense for agencies to grant clients access to temps’ personal histories (rirekisho) or any other information not necessary to the job, but the rule occasionally gets broken anyway. Client firms sometimes demand the information, and managers may come under heavy pressure to provide it, especially if it seems necessary to win a contract.
The information issue was underscored in an unusually blatant fashion in January, 1998, when Tempstaff, one of the major TSFs, posted personal as well as job-related information of some 90,000 registered temporaries on its home page and offered for sale “a list of women ranked by appearance.” The incident occurred just as labor, business, and public interest representatives were entering the final phases of negotiating revisions to the Temporary Worker Law and the Labor Standards Law. The timing reportedly helped the unions and opposition parties to push through rules mandating stronger worker protection. In July, 1998, six of the women, all members of Tokyo Union, sued in Tokyo courts. The final settlement stipulated that Tempstaff should not discriminate on the basis of sex, age, or other factors unrelated to work, and that it should cease gathering such information. Other companies were asked to observe the same conditions. In March, 2000, Tokyo Union concluded an agreement with the industry’s main association, the Temporary Work Services Association of Japan, to protect personal information.
Pay, Productivity, and Skills
Low incomes are the lot of registered temps (pay and income are frequent subjects of complaint in surveys). The weak economy and slack job market create a strong downward pressure on temp pay, although the competition to recruit qualified people also creates something of a floor. Wages for temps and fees for TSFs appear to be fairly standardized; pay levels fluctuate constantly, but within a narrow range (usually one to two hundred yen). In 2000, basic clerical workers in Tokyo were earning from 1,500 to 1,700 yen an hour, probably a slight rise over previous years. Rates are substantially lower elsewhere in Japan. A few companies like Pasona and Upscale command small premiums of one to two hundred yen an hour for both the temps’ pay and their own fees, partly because of their reputations for providing quality staff. Large TSFs also have some negotiating leverage because they can quickly meet virtually any demand for one or many temps. Small firms like Clerical and Tech that have to scramble to register competent people have no leverage. Clerical tries to provide raises in the 20- to 30-yen range for temps upon the completion of each year of service, but even these tiny increments can soon wipe out an agency’s small commissions (since they are not passed on to clients), so they are not guaranteed. The temps do not demand raises since they don’t want to risk pricing themselves out of jobs.
Temps rarely receive bonuses, and few temps receive all of the fringe benefits, social insurance benefits, or travel allowances that regular workers receive. These benefits have been designed primarily for regular workers, and little effort has been made so far to adjust them to meet the needs of non-regular workers. Part of the problem is that the Ministry of Labor and the Ministry of Health and Welfare could not agree on revisions (perhaps their merger will facilitate a solution). A worker is supposed to have a yearlong job to be eligible to enroll in unemployment insurance, for example, but almost all office temps have contracts of less than one year. Workers have to re-enroll in health insurance every time they receive a new assignment. Pasona maintains specialized sections to handle such tasks, but they are major burdens for smaller firms. Client companies naturally balk at the additional costs or paperwork needed to process social insurance forms on behalf of non-regular workers. One result was that in 1999 only about 60 percent of paato and temps were enrolled in employment insurance. The Revised Temporary Worker Law tightened the rules considerably, but coverage is still short of universal.
Most temps do not receive travel allowances, which are provided tax-free to virtually all regular workers, and they are thus taxed on the income that goes for transportation expenses. In Japan, where the public transportation system is mostly unsubsidized, the cost to low-paid workers can be substantial. Since the TSFs are not about to ask clients to pay travel allowances, the Labor Dispatch Network has tried lobbying Diet members for compensating tax breaks. Temps are due ten days’ paid vacation time upon completing six months’ work, but comments on the Labor Dispatch Network website (and by a TSF manager) indicate that they are usually pressured to forego the vacations, generally on pain of getting no further assignments. 
Hiring temps is not the only way in which managers can hold down pay. Some companies, for example, simply cap pay raises for non-career (sogo-shoku) workers, who are mostly women. During a 1998 rally, a group of so-called “full-time part-timers” voiced fears that managers would replace them with temps—the temps might earn higher wages but would still be cheaper because they would be “disposable” and would not receive benefits the paato had won as full-time (although non-regular) employees. Daiwa Securities has reportedly redesigned its personnel system to force present non-career workers either to improve their skills or to retire, while having temps take over the routine work they used to perform.
Japanese firms have steadily expanded the use of performance-based pay during the 1990s. It is being increasingly used for part-time and side-job employees (notably at McDonald’s), and may soon spread to temps. Pasona already uses an evaluation-based increment that varies the pay of employees in the same job classifications. The use of performance-based pay may intensify the personal information controversy. There is reportedly a growing demand by temps to be allowed to see performance evaluations, even though regular employees do not have this right. Mami Nakano, a prominent temp-rights activist and the voice of the Labor Dispatch Network, argues that granting temps the right to see their evaluations would put employers on notice not to judge workers by age, gender, or appearance. The Ministry of Labor reportedly does not back mandatory disclosure on grounds that the issue should be handled by labor and management at the company level, and because no consensus has yet formed.
Information technology has transformed the work of office temps. Starting around 1997, there was a so-called qualifications boom that greatly raised skill levels. Competence in Word and Excel, once a strong qualification, is now a bare minimum. Companies are seeking more advanced skills such as database management or the ability to make manuals. They are also increasing demands on temps, who are usually worried about job security. In March, 2001, Clerical’s coordinator said that a new and growing practice used by large clients to raise productivity is to hire a “set” of temps (say ten), and then dismiss the slowest ones. In a follow-up conversation in early January, 2002, she said that the one significant change she had observed was that client firms increasingly use several TSFs rather than one primary provider in order to maintain competitive pressure on the firms.
Despite the importance of IT skills, most training seems to be acquired either on the job or at the worker’s own initiative. Cost-cutting pressures make it difficult for most TSFs to conduct more than rudimentary training. The Tokyo Survey indicates that temps most often gain technical skills while working as regular employees, with temping and vocational schools being the next most important means of skill acquisition. Clerical abandoned an attempt to conduct joint training with other TSFs because the cost of employing teachers was too steep even for group lessons. Another problem for small firms, in addition to the expense, is that training would put a heavy burden on their own staff, which often consists of only five or six people. Upscale and Ginza conduct some training, but the Upscale coordinator acknowledged that it serves more to boost workers’ confidence and provide experience than to impart new skills. Large TSFs have the resources to conduct more substantive training. Pasona runs a variety of programs, including full-time month-long courses. Manpower and a Pasona subsidiary, Pasona Tech, offer free training in IT fields for their registered workers. Since specialists such as systems engineers and English-capable secretaries are always in demand, some agencies have entered into tie-ups with firms that conduct training, such as U.S. Education Network, which helps students study accounting.
The large TSFs are developing strategies that could significantly reshape both the personnel services industry and workers’ career patterns. In 1995, Pasona became the first company to register students approaching graduation, and TSFs now register and train a few junior college and university students. Typically, these students (virtually all women) are assigned to client firms as one- or two-year contract employees, generally as secretaries, file-clerks, and office equipment operators. The practice reduces recruiting costs for clients, and gives them two to three months to ensure that incoming workers are trained in basic tasks before starting work. TSFs typically claim that at least 60 percent of such workers are offered regular jobs, but union and school officials fear that they simply allow companies to employ young workers at a low cost while retaining the right to dismiss them at any time.  Only a few people—perhaps between 1,000 and 2,000—are involved at present, but the agencies have been planning to increase recruiting.
Japan’s business leaders argue that increased use of non-regular workers is one of the steps essential to reviving the sagging economy, but they have generally avoided discussing who will bear the costs. Temporary workers possess significant skills, yet they suffer low status, low incomes, lack of protection from harassment and arbitrary dismissal, and declining job security as new technologies and management practices lead to the routinization of skills. Their situation is a poor omen for the growing ranks of non-regular workers.
CHARLES WEATHERS is an associate professor teaching political economy in the Faculty of Economics, Osaka City University. Recent articles of his appear in The Politics of Labor in a Global Age, Christopher Candland and Rudra Sil, eds. (Oxford University Press, 2001) and Marketization and the American Impact: Analyzing Postwar Japan's Social Economy, Hiroshi Shibuya, Makoto Maruyama, and Masamitsu Yasaka, eds. (Tokyo University Press, 2001). Mitsuko Miyazawa provided important research support for this article, a different version of which appeared in Social Science Japan Journal, October, 2001.

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