What would you choose: Japanese-style job security or American performance-rated pay?
Nomura Securities, following its takeover of Lehman Brothers’ Asian units last year, is giving staff in Japan a choice of East v West.
Employees there can either stick with their current arrangements, which have traditionally offered stable employment, or they can sign up for Lehman-inspired contracts, which link compensation more closely to individual performance.
They can also opt to become specialists in a particular part of the bank, unlike the current system at Nomura, which trains bankers to be generalists by rotating them between businesses.
Will giving employment options to employees work out in practice? While it’s a radical shift for a Japanese bank, it’s not uncommon within American companies, says Deborah Sawyer, a partner at search firm Odgers Ray & Berndtson.
“Typically we see this at the professional services companies, including executive search firms, and within sales organisations. I’ve had a private equity client in the US pay its people on different programmes, to include allowing some to be contract employees,” adds Sawyer.
And the dual-track model could also help Nomura attract juniors, says Na Boon Chong, director of consultancy for Southeast Asia at Aon Consulting.
“When you are confronted with the reality of having to change the internal culture and operating model in order to compete globally, perhaps this is a good way to bring first movers onboard by offering them the Western package. Those who dare would take it, allowing the less daring to stay on the old system,” he says.
But while it might help with new hiring, recruiters warn that the plan could create more friction between existing staff at the merged bank. Nomura is said to be paying college graduates originally recruited by Lehman more than twice as much as those it hired on its own.
Some Japanese employees are also annoyed that English is becoming the main language of communication at Nomura’s Tokyo headquarters, according to the Financial Times.
Should more banks follow Nomura’s example and offer different types of employment contracts in order to attract and retain different types of bankers? Let us know below.