Hiring Your First Japan Employee

Hiring Your First Japan Employee (Top 3 Roles + Common Salary Ranges)

You’ve done the market research, got a little traction, maybe won a few Japanese customers. It’s time to start planning your first hires in Japan. Where to begin?

Who you hire first sends a big message to the market about your company, brand, and strategy. You already know you need someone who understands both your customers and your business, who can communicate well with all stakeholders. But what level of experience to target, what responsibilities to give them, what specific role to recruit for–these decisions will depend on your business model and expansion goals.

Here are the 3 most common patterns for the first Japan hire, how much they cost, and a few alternatives (including mistakes to avoid).

#1 – Japan Country Manager

Most global startups that have decided to build a Japan office will start at the top of the org chart with a Country Manager, also known as a Managing Director or General Manager. There are a few reasons for this:

●  Sales. A Country Manager will be a seasoned sales executive who can bring in substantial revenues in their first year via existing CXO relationships.

●  Communication. A Country Manager will generally have experience reporting overseas and working closely with executive managers.

●  GTM & Operations. Planning a detailed account strategy, managing a P&L, and operational service procurement for Japan are a lot easier when you have an employee who has done it before.

●  People management. If you’re planning to expand the team, having an experienced people manager in place from the start saves energy on training & rehiring later on.

●  Recruitment skills. A well-respected executive with hiring experience and a broad network can significantly ease the pain of scaling the team as you grow.

The benefits of hiring a strong Japan Country Manager are too many to list. It can make the difference between spending years finding market fit, and strong revenues from year one. Our most established, fast growing clients all have a dynamic leader in place.

Substantial advantages aside, this strategy isn’t without its own unique risks. Here are a few reasons why some choose an alternative solution:

●  Payroll costs. A Country Manager is a big investment, with typical salaries ranging from 25M-40M JPY and often some kind of equity in the company. Mis-hiring can be expensive.

●  Talent acquisition cost. Executive searches require significant time and investment, generally including external agency support.

●  Brand exposure. The wrong Country Manager can bring a lasting negative image to your company. Without local insights, it is difficult to know who is loved and who is hated in the market.

In general, the pros of a “Country Manager first” approach far outweigh the cons—that’s why it’s the most common strategy. However if it’s not for you, there are other options.

#2 – Japan Sales Director

Some companies choose to move one step down the org chart and start from an individual contributor sales person, usually targeting someone with potential to scale to a team manager. Rather than the experienced executive, this strategy focuses on the “challenger”.

Here are a few reasons why companies take this path:

●  Pure sales focus. When plans and resources aren’t in place to quickly invest in scaling your Japan business, sometimes the right hire is someone who already spends all day selling.

●  Cost control. Given the more limited responsibilities of the role, it’s possible to hire at a relative discount. Standard Sales Director salaries range from 18M – 25M JPY.

●  Testing traction. Depending on your solution and sales strategy, it can be difficult to get traction from overseas. A Sales Director can be a lower commitment way to test the market directly.

●  Motivation. The challenger profile usually wants to prove themselves across billings, communication, and growth potential so they can step up to a Country Manager role.

This type of hire can take different forms—lead generator, account manager, partner manager—depending on your priorities. If taking this path, you’ll want to recruit for sales accomplishments and growth potential rather than past leadership experience. Candidates will want to hear they have a real chance to grow into the Country Manager role and need to feel secure they won’t be hired over.

Hiring this way can add additional complexity to your expansion plans. Here are a few difficulties we often encounter with this approach:

●  Defining the search. A current Sales Director may see your 1st-in-Japan role as a risky horizontal move, while most Account Executives aren’t ready for the responsibilities. Dialing this in is critical.

●  Operational management. This person likely won’t have experience with corporate filings, bank accounts, HR & compliance, etc. You’ll need to source local support for this.

●  Scalability. This type of profile often won’t have the experience with hiring and people management necessary to grow in the mid-term. There is a high risk they will look for the door if a Country Manager is slotted in above them to bring more scale.

Despite the risks and limitations of this kind of hire, it can be a good option for startups that are looking to give Japan a try without diving in completely.

For some, the cost of recruiting and employing at the Director level may still be too high, especially bootstrapped startups counting on a short path to profitability. There is a third option we have seen work in this case.

#3 – Representative Director or Japan Advisor

Some companies without a large cash reserve to invest in a Japan sales office—including early stage startups and pure open source plays—bring on a local representative & advisor instead of a more traditional sales profile.

This is a senior profile, usually someone who has played one of the above roles in the past and whose passion lies in bringing new technologies to Japan. They will know the ins-and-outs of Japanese business requirements, GTM, local executive groups, partner ecosystems, and what it takes to work as a remote member of a global startup. Here are the main benefits of taking this path:

● Network. This person will already be connected with local C-suite executives that you want to be in touch with, including potential leads you wouldn’t think of on your own.

● Expertise. They will be able to tell you from personal experience what has worked for other global startups in Japan and what mistakes they have made.

● Affordability. You may find someone willing to do this kind of role in exchange for a stable base salary with a bit of commission on top, possibly between 10M-15M JPY total.

A local representative with the right background can make your Japan plans real, opening doors for your global team and eventually stepping aside when you have enough traction to invest in a more robust commercial leader.

As with any hiring profile, there are risks of taking this path. Here are a couple of them:

● Low energy. It’s important to screen for the motivation to execute on your GTM beyond planning. They may not be a pure sales hunter any more, but you still need them to sell.

● Resistance to new approaches. If you aren’t fully aligned going into the relationship, you may find this kind of hire won’t take action on initiatives they disagree with.

A senior representative can lay the foundation for a long and successful Japan strategy, supplying you with first hand data about who to target and how they respond to your messaging while establishing your operation. The key here is finding someone with a real passion for your business.

Any of the above strategies can be a suitable way to get your business established in Japan. It all depends on your situation and goals.

#4 – Alternative Approaches

The tried and true patterns described above are the most common. Some break the mold based on unique company position or market conditions, while others do it out of pure inexperience. Here are a few alternatives from the tactical to the inadvisable:

● Director of Presales, Customer Success, or Consulting

A kind of middle road between hiring local sales or post-sales customer support, we see businesses lead with these positions when they are successfully opening doors from abroad but need someone to take their customer relationships to the next level. These searches are more specialized, but the opportunity can be very attractive for the right candidate. This strategy will look similar to the Director of Sales approach described above.

● Evangelist or Community Manager

Certain businesses that have a product-led growth model will lead with an evangelist type position, someone whose role is to increase awareness and adoption among the user community. Sourcing the right person can be difficult because this isn’t a common role in Japan. Your best bet taking this approach will likely be to find an avid user of your tool who is unafraid to do public speaking and customer facing. For highly technical solutions, this is likely to be a challenging search.

● Technical Support

If you have successfully won accounts that are either willing to be managed from overseas or don’t require any hand-holding but expanding in Japan isn’t on the strategic agenda, maintaining the business stream by supplying local support can be a functional first hire. Finding someone with senior enough experience to work independently but who is still hands-on with the technology can be a challenge, but in general this search will be on the easier end of the spectrum.

● Pure Commission Contract

Sometimes we see businesses try to start their Japan branch with a commission-only sales contractor as a way to take the minimum possible risk. This is almost always a mistake. First, it will be incredibly difficult to find someone both qualified and willing to take this position—bilingual talent is a tiny talent pool in high demand, and Japan is fully employed as it is. Even if you manage to hire this way, customers won’t want to deal with a company with such little commitment to the local market. Not to mention that protecting your negotiating position and brand won’t mean as much to a sales representative who is desperate to close business.

● Junior Business Developer

Similar to the pure commission sales person, some businesses try to reduce their exposure by hiring a young up-and-comer on a lower base salary “with high commission potential”. We do not recommend this approach. This is not as attractive an offer in Japan as it may appear in other markets. Japan is an aging society and the junior talent pool is small as it is. High potential, bilingual sales people are rare and their inboxes are saturated with offers. Here again, you are also likely to suffer when it comes to closing business. Japanese executives typically expect to deal with senior people when it comes to domestic dealings.

In Conclusion

There are as many different approaches to making a first hire in Japan as there are companies planning a Japan market entry. What hiring strategy is best for your organization will come down to a combination of factors, including your business model, growth plan, sales style, financial position, and the way they all look through the lens of the Japanese market.

Peloton K.K. is a Tokyo recruitment boutique that specializes in planning and executing strategic searches for Japan sales offices. Get in touch to learn how you can land and expand in Japan.

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