RetireJapan

We're looking at employing our first full-time staff and we've no idea what salary to pay.

I came across this excellent blog post: https://www.retirejapan.com/blog/salaries-in-japan/ which says, for 2017, "average starting salary for university graduate: 3.25 million". If I divide this by 12 it comes to ¥271,000 per month. If I divide by 14 (meaning 12 months salary plus 2 x monthly bonus each year) it comes to ¥232,000 per month.

I found this date from the horse's mouth (Ministry of Health, Labour and Welfare): https://www.mhlw.go.jp/english/database ... alary.html For 2018 the figure for university graduates for all size companies is ¥210,000 for men and ¥202,000 for women. For the smallest companies it's ¥203,000 for men and ¥197,000 for women. As a note it says, "as to 'starting salary',see the explanation of this survey" which I couldn't find but I assume this is basic monthly, excluding bonus.

Me and wifey totally out of the scene when it comes to this kind of stuff. Does it seem right that starting salary for a mom and pop company like mine for a uni graduate is around ¥200,000 per month? How many times is monthly bonus usually paid? Once a year or twice? BTW, I'm down in Kyushu so I guess salaries are a bit lower here than the big cities.

Wonder how much extra I would need to pay for someone with good English

Any constructive comment / input is welcome, thanks.

Lots more information needed before I can comment further.

Like a job description....

Yeah, the job description and qualifications/skills needed would be helpful

My thinking was that graduates don't really have any specific skills except (presumably!) being literate, numerate and proficient with a computer. I imagined that by hiring a fresh graduate we would be hiring a blank slate ready to be trained. The duties will be those involved with being a travel agent but I don't expect any graduate to have those skills already. I'm looking for certain personality traits rather than specific skills or abilities. I'm trying to gauge an average salary that fresh graduates with no relevant experience might expect.

Once I have this figure I can advertise the position as "salary from ¥XXX" and if I do get candidates with relevant skills (for example excellent English ability like my current part-timer) and/or relevant experience then I need to add to that basic figure depending on the specific skills or experiences they can bring to the position.

Hope this clarifies.

If I divide this by 12 it comes to ¥271,000 per month. If I divide by 14 (meaning 12 months salary plus 2 x monthly bonus each year) it comes to ¥232,000 per month.

Well, I'm not sure what to think about the Japanese system, and i have had some of my friends who work for companies actually say it their salary being with held. If your paying someone a salary at 271,000 yen per month that should be their salary. Full stop. Doing some slight of Figurey pockery, by withholding some of their salary, handing it over and then saying this is a bonus, when in reality it was never a bonus. It was their salary. Further more, bonuses can alway be taken away for what ever reason.Or not even payed out at all.

On top of that the person may wish to use the near 40,000 yen you're with holding, for investment purposes. IMHO, A bonus should be ON TOP Of their salary.... not by holding their salary. I personally would not like any of my salary being with held, because i would like to do something else with my money, but that is just me.

I would define a bonus as a sum of money added to a person's wages as a reward for good performance.
eg " Christmas bonuses"
synonyms: extra payment, gratuity, tip, handout, gift, present, honorarium, reward, prize, commission, dividend, premium, percentage; More
BRITISH
an extra dividend or issue paid to the shareholders of a company.
BRITISH
a distribution of profits to holders of an insurance policy.

If I divide this by 12 it comes to ¥271,000 per month. If I divide by 14 (meaning 12 months salary plus 2 x monthly bonus each year) it comes to ¥232,000 per month.

Well, I'm not sure what to think about the Japanese system, and i have had some of my friends who work for companies who actually say it part of their salary being withheld every month. If your paying someone a salary at 271,000 yen per month that should be their salary. Full stop. Doing some slight of "Figurey pockery", by withholding some of their salary, handing it over and then saying this is a bonus, when in reality it was never was a bonus. It was their salary! Further more, bonuses can alway be reduced for what ever reason.Or not even payed out at all. Personally i think it's a way to cream off a bit of the salary for the company itself.Sorry if that offends but thats how I see it if someone is with holding some of the salary!

On top of that, the person may wish to use the near 40,000 yen you're with holding, for investment purposes. IMHO, A bonus should be ON TOP Of their salary.... not by withholding part of their salary. I personally would not like any of my salary being withheld, because I would like to do something else with my money ,eg pay for juku, hospital, savings, investement, but that is just me.

I would define a bonus as a sum of money added to a person's wages as a reward for good performance.
eg " Christmas bonuses"
synonyms: extra payment, gratuity, tip, handout, gift, present, honorarium, reward, prize, commission, dividend, premium, percentage; More
BRITISH
an extra dividend or issue paid to the shareholders of a company.
BRITISH
a distribution of profits to holders of an insurance policy.

I think this depends on how seriously you plan on competing for new university graduates. Salaries in Japan start relatively low for "seishain" (正社員) because they have extraordinary employment protections and are very hard to let go. If you are hiring contract employees (i.e. for fixed terms) you need to pay more, and don't need to pay bonuses while if you hire as permanent company employees you should expect to honor that long term employment commitment, can start at a lower salary but should expect to pay a bonus.

With all respect to what Bubblegun posted about bonuses, they actually allow salaries to be higher than they otherwise would be because they fluctuate with company performance and the jobs in Japan which pay bonuses (which are usually paid twice a year but at the very top of the company tend to be paid only once a year) usually provide higher compensation than those that don't. They are important because it is easier to reward outstanding performance by adjusting the bonus than by committing to an increase in yearly compensation. My bonus ranges from 0 (if I or the company do poorly) to 40% (if we both do very well) of my salary and I would be much the worse if I were not in the bonus system.

Thanks Tokyowart.

With all respect to what Bubblegun posted about bonuses, they actually allow salaries to be higher than they otherwise would be because they fluctuate with company performance and the jobs in Japan which pay bonuses (which are usually paid twice a year but at the very top of the company tend to be paid only once a year) usually provide higher compensation than those that don't. They are important because it is easier to reward outstanding performance by adjusting the bonus than by committing to an increase in yearly compensation. My bonus ranges from 0 (if I or the company do poorly) to 40% (if we both do

I fully understand what you're saying, and i think it depends on the company/job, but to say salaries are higher because they have a bonus, is I think a slight of hand,or how shall i say..................... colourful accounting!
As you rightly said if the company does well, or the worker does well, then a bonus can be given, however this can be rather subjective. I would hate a teachers job/salary/bonus being dependant on a 14 year old really loving the lesson, liking the teacher, or a test result.In my case as a health care worker, I would never get a bonus because everyone dies in the cancer unit, but in the other wards, everyone survives, because its opthalmology.The psychiatric wing really has a problem because nobody gets cured. So somethings are impossible to equate or calculate.

But the OP is trying to decide if they should pay, 270,000 yen per month over a 12 months or to pay 232,000 (14months) and then give the worker the rest of THEIR salary by pretending the rest is a BONUS. From my perspective it was a salary being withheld and then given to the worker in the GUISE of a BONUS.
While I have never worked under the bonus system, mainly due to the sector I worked in above, for some jobs a bonus can be impossible to calculate, and can be subject to relationships, power, and sometimes a persons physical/mental ability, and sometimes you just can't calculate.
Someone who for example, suffers MS/depression, etc may be working much harder physically, mentally but may have had more sick time, worked harder,(resulting in more sick time, or in japans case even suicide) put in more overtime, of even turn up to work when they shouldn't, can end up get a lower bonus.

By pretending that a BONUS is a Salary I believe it is a way for a company to NOT increase the hourly rate, which has to be paid legally, thereby the company don't have to increase the prices and pass this on which results in deflation.Certainly wage deflation! It kind of seems as though Japan is in vicious circle of wage restraint, that japan is trying to dig itself out of.
Bonuses can skew what the real salary is for the majority of the people who do not receive a bonus.
I certainly think a BONUS is great,(depending on the sector) so in this case, I believe the OP should pay 271,000 yen, because that is the "true salary",they can say they can pay over 12 months,( 1 year is 12 months not 14 months as the OP said) and anything over and above that, as you rightly point out is a BONUS, because they did a good job, or the company made a a profit.
So IMHO, pay the 271,000 per month, don't pay a bonus, and let them decide what to do with their salary.
This kinda point out how although we appear to be getting more in a salary, because of the bonus, but real salaries are going down.
With so called difficulties in hiring, and so the theory goes, wages should increase, and sadly that is not happening.

https://tradingeconomics.com/japan/wages

https://tradingeconomics.com/japan/wage ... ufacturing

https://tradingeconomics.com/japan/wages

Bubblegun,

I think you make several good points including the difficulty in evaluating job performance to award a higher or lower bonus and that if the bonus is not going to really equate with what we intuitively mean by "bonus" then it is effectively just withholding monthly compensation until the payout periods. (Although it does get better tax treatment when awarded because inhabitants tax (住民税) isn't taken out of the bonus at the time of payment.) I also agree that bonuses confuse (or skew) understanding of what compensation really is when people only report monthly income and the listener doesn't realize that yearly income is going to be 16+x that monthly figure.

That said, performance does differ, even among us healthcare workers (I'm a physician) and within companies the bonus system helps reward outstanding performance especially for younger employees because they are evaluated relative to expectations for their salary grade. For the small business KyushuWoozy is running this might not be as big an issue but in the department of 50-odd employees that I manage, the bonus system is seen as an important tool to give feedback (both positive and negative) to people about how they are doing. We put a lot of effort into those bonus evaluations. They get reviewed by the employee's immediate manager, the manager's manager and a committee I chair with all departmental managers twice a year. Then in addition I have to defend our assessments to our personnel department.

TokyoWart wrote: ↑Sun Jun 16, 2019 12:27 pm I think this depends on how seriously you plan on competing for new university graduates. Salaries in Japan start relatively low for "seishain" (正社員) because they have extraordinary employment protections and are very hard to let go. If you are hiring contract employees (i.e. for fixed terms) you need to pay more, and don't need to pay bonuses while if you hire as permanent company employees you should expect to honor that long term employment commitment, can start at a lower salary but should expect to pay a bonus.

I'm absolutely looking for someone who will stay with us indefinitely, somebody who can expect their rewards and responsibilities to increase as the company grows and prospers. That's why I'm happy to take a person with zero experience in the field and who will take some considerable time to train. Assuming it works out for both parties this is intended to be an open-ended placement.