Employing Foreign IT Engineers in Japan

March 6, 2025

The IT industry in Japan is facing a severe shortage of skilled workers due to the digital transformation (DX) movement and rapid technological innovation. Companies are struggling to secure adequate resources while the demand for engineers with specialized expertise in AI, cloud services, and data analytics keeps growing. The conditions are challenging given the constraints of the Japanese labor market — and even tougher when seeking English speakers with cross-cultural adaptation skills.

Hiring IT engineers with foreign backgrounds is one way companies are addressing the shortage. However, many Japanese companies hesitate when hiring foreign talent due to concerns about language and cultural differences. In this post, we will go over the benefits of hiring foreign engineers, what to consider during the hiring process, and what concrete actions to take to address potential issues. We hope this information will alleviate concerns and help enhance your global competitiveness.

1-1. Growing Demand for Talent Driven by Digital Transformation and Globalization

Companies undergoing digital transformation need staff who have special skills in areas like AI, cloud, and big data. In addition, companies expanding into global markets need to be able to communicate using English.

One manufacturing company, for example, was implementing a cloud-based system to increase the efficiency of its overseas supply chain management. However, the company lacked staff who could customize the system for the overseas locale, resulting in project delays. Cases like this are common, and demand for engineers who can handle global projects continues to grow.

1-2. Shortage of Skilled Workers in Japan

Meanwhile, Japan’s working population is declining, and there are not enough skilled IT workers to meet demand. According to a survey by the Ministry of Economy, Trade and Industry, there will be a shortfall of around 790,000 IT professionals by the year 2030. This shortfall is particularly apparent in fields which require highly skilled workers.

Also, the declining birthrate in Japan has led to a decrease in the number of new graduate engineers, creating a wide-ranging shortage of talent from entry-level to experienced professionals.

1-3. Challenges Presented by Current Hiring Practices

Companies only hiring within Japan often face higher costs and longer lead times. Many companies also report that staffing companies are having difficulty providing skilled workers who can immediately start contributing. Because of this, many digital transformation efforts and global projects fail to reach their desired outcomes.

2-1. Leveraging Technical Skills and Diverse Perspectives

Foreign engineers often excel in specialized fields such as AI, cybersecurity, and cloud technologies. At a certain company in the finance industry, a foreign engineer led a project to revamp the security system and succeeded in reducing risk by 50% in just six months.

Also, the diverse cultural backgrounds and experiences of foreign employees bring fresh perspectives to the team and foster innovation. A multicultural team is a great asset to companies trying to cultivate an environment which is conducive to new ideas.

Another factor is that global projects often progress more smoothly with team members who understand the local culture and business practices. Effective communication with the local clients and partners helps reduce misunderstandings or distrust, thereby enhancing overall project reliability.

2-2. Improving English Communication Capabilities

The multilingual abilities of foreign IT engineers are a powerful asset for good communication with overseas clients and offices. At a certain IT service company, a foreign engineer project lead enabled smooth coordination of specification changes with the overseas locations, greatly improving overall project efficiency.

Additionally, using English as a common language in global projects can deepen collaboration among team members from different cultural and linguistic backgrounds, thereby boosting team performance.

2-3. A New Approach to Securing Human Resources

For companies feeling the limitations of the domestic talent pool, hiring foreign engineers is an effective way to secure immediate expertise. In particular, it offers a notable advantage in obtaining the necessary skill sets while controlling both hiring speed and cost.

For global projects, adding talent familiar with local conditions can enhance a project’s adaptability to the local market. Such strategic talent acquisition is crucial to supporting a company’s global expansion.

3-1. Addressing Differences in Language and Culture

Issues
There are times when foreign IT engineers and Japanese team members may have difficulty communicating due to differences in language and culture. Sources of issues include Japanese-style workplace reporting (ho-ren-so, or report-contact-consult: bottom-up reporting where subordinates give regular updates without being asked) and the use of ambiguous phrases or expressions. Additionally, Japan is considered a high-context culture, while many Western cultures are considered low-context, which can further lead to misunderstandings.

Countermeasures

1. Establish a common language: If English is chosen to be the common language used by the team, provide language training to help improve members’ English skills. If necessary, provide Japanese language training to the foreign engineers and create an environment where they can learn vocabulary commonly used at work.
2. Training to improve cross-cultural understanding: Implement cross-cultural communication training to educate team members about cultural differences and communication styles.
3. Appoint a diversity officer: Employ an expert in multicultural environments who can help mediate potential conflicts.

3-2. Inadequate Internal Systems

Issues
Whether foreign engineers can adapt well to the workplace largely depends on the internal support structure. Unclear work processes or a lack of support systems can hinder their long-term retention.

Countermeasures

1. Implement a mentorship program: Assign an internal mentor to newly hired foreign engineers to address questions regarding work and culture.
2. Improve processes: Create documentation for workflows. Initial training and induction programs will help engineers to quickly get used to their work environment.
3. Regular check-ins: Hold regular meetings to address any worries or concerns that your engineers might have.

3-3. Complex Hiring Processes

Issues
When hiring foreign workers, significant time and resources are required due to the complexity of obtaining working visas, renewing visas, drafting employment contracts, and handling tax matters.

Countermeasures

1. Utilize specialized agencies: Reduce the burden of visa applications and other legal procedures by hiring a specialized agent.
2. Strengthen the legal team: Appoint dedicated legal personnel in-house to create employment contracts and working conditions specifically tailored for foreign employees.
3. Use templates: Improve efficiency by creating templates for employment contracts, working visa applications, and other required documents.

3-4. Mismatched Language Skills and Expertise

Issues
If an employee’s skills weren’t sufficiently assessed during hiring, there is the risk that they may not be well-suited for the project. Additionally, they may lack the necessary language skills.

Countermeasures

1. Set clear hiring criteria: Make the hiring process more effective by defining clear job requirements regarding skillsets and language ability.
2. Assessment tests: Implement technical and language tests to determine whether candidates have the necessary skills for the project.
3. Skill development after hiring: Provide training programs and self-study opportunities to cover any skill gaps after onboarding.

3-5. Low Retention Rates

Issues
When sufficient accommodation is not made for foreign engineers, the risk of them leaving increases. Major factors include feelings of isolation, lack of clarity in career progression, and dissatisfaction with living arrangements.

Countermeasures

1. Offer a career path: Ensure that foreign engineers are aware of attractive career development opportunities and chances for promotion.
2. Support for daily life: Have specialized staff available to help employees find housing, provide support for family members, and give advice for daily life.
3. Boost engagement: Hold teambuilding events and cultural exchange events to help foreign engineers feel like they belong in the workplace.

For Japanese businesses to meet the demands of globalization and digital transformation, securing the necessary IT talent is imperative. With the current Japanese labor market being very tight, hiring foreign IT engineers is a key consideration. The strong technical skills, English proficiency, and multicultural perspectives offered by foreign engineers can be a catalyst for improving your company’s competitiveness.

However, the challenges associated with differences in language and culture, as well as the increased complexity of hiring, cannot be ignored. Addressing these with specific measures — cross-cultural training, establishing a common language, preparing an effective support structure, and engaging specialized agencies — can be highly effective. By creating an environment which supports the long-term employment of foreign IT engineers, you will boost retention and increase the productivity of the company as a whole.

Furthermore, the hiring of foreign engineers isn’t simply to fill positions. A multicultural team which can handle global operations can create new business opportunities for your company. For example, with project leaders who understand the local culture and needs, you improve client satisfaction and contribute to the overall success of the project

However, many businesses face difficulties with language and cultural differences. They also have trouble implementing systems to accommodate foreign talent and the added complexity in the hiring process. In addition, there are times when there is a rush to fill positions or issues with the organizational structure. In such cases, consider reaching out to a foreign IT engineer staffing service.

By using a staffing service, you can significantly reduce the cost and labor associated with hiring and find people who will be able to hit the ground running. Also, with onboarding and retention support, you can minimize roadblocks and get things moving smoothly.

Here at ISF NET, we can support your business’s digital transformation and global business with our multilingual IT engineer staffing services. We provide highly skilled foreign IT engineers and help with the often complex onboarding and hiring procedures.

Want to boost your competitiveness? Turn to ISF NET for your staffing needs. We look forward to hearing from you!

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