interview=Ken Mitsui | Text=Aya Rikitake | Photographs=Kohei Nishiyama
Empowering Japanese Companies Through Proprietary, Cloud-Based Diagnostic Surveys
We interviewed Hiroaki Yasukura, who established ICONIC, a recruitment agency in Vietnam, in 2008 despite having little experience in the human resources industry. Yasukura’s business strategies evolved through an exploratory process of continued improvement. They helped clarify recruitment issues at Japanese companies, laying the groundwork for his company's growth in the global market.
An Exploratory Process Leading to Successful Business Strategies in Vietnam
―Can you tell us about your company?The core business of ICONIC is the “iconic Job” service, which supports people in developing international careers. The philosophy behind the service is summed up in our motto “create beyond.” Our business has five locations in the nations of Vietnam, Japan, Indonesia, and Malaysia. We occupy a unique place in the Vietnamese market due to our expertise in providing both recruitment services and organization-wide human resources consulting.
―Can you describe your career so far?
After graduating university in 2004, I worked in the franchise industry for three years before changing jobs to work for a year for a company in Vietnam. I founded ICONIC in May 2008. Ever since my university days I had an interest in other countries. I studied in the UK and traveled to the US for a month. This led me to realize that the best place to launch a future business that would have a positive impact on society would be outside Japan, and that feeling only grew stronger after I started my career.When I began my career in the 2000s, affiliate marketing was at the height of its popularity. Many affiliates only focused on making money in any way they could, even if they were ignoring rules and laws. It was really disappointing to see how those affiliates ignored the rules, placing awful advertisements all over the place and making ten times the money than I was. I started thinking about finding a company that could make good money with straight, honest methods that contributed to society. At the same time, I still had dreams of working abroad. With Japan’s population continuing to shrink, I decided to launch a business in Vietnam, which has a growing population and rising wages.
Hiroaki Yasukura"The philosophy behind the service is summed up in our motto "create beyond." "
―Why did you decide to launch a human resources business?
Before setting up the company, I spent a year working in Vietnam for a security consulting company. One of my customers told me that they wanted to hire Japanese engineers, and I intuitively thought that there will be a growing need for a company that brings together Japanese human resources and Vietnamese companies. And so I took the plunge.
But immediately after launching the business, I realized that I had not given it enough thought. At the time, salaries in Japan were still higher than those in Vietnam. It was not realistic for a company, unless they were doing extremely well, to hire a Japanese engineer for a management position for tens of millions of yen per year. I had no experience in the human resources industry or in sales, and I wasn’t even aware of the basic facts that I know now. When I approached companies, the first thing they said was “we would first like to hire Vietnamese engineers.” So I veered to introducing Vietnamese personnel.
―After those initial difficulties, how did you get the business back on track?
I was just 26 years old when I started the business, which is young enough to start over. So during the first year I considered it a trial, experimenting with many methods to gain experience in business and sales. I reduced the running costs to a minimum and led a spartan lifestyle to try and create even just a little profit. I got into the black after six months, and then was recording $10,000 in profit in some months. At the time, there were three employees, and we started successfully placing some Japanese people too. After making $20,000 profit in one month, I realized we could continue into a second year. We tripled our sales in the second year, and we continued expanding until the pandemic arrived.
―Are your sales returning to pre-pandemic levels?
The human resources industry in Vietnam is more difficult than before the pandemic for everyone, including us. One reason is that the work visa system has become stricter. This has led to a number of people losing job offers because they could not get a work visa. Our company has seen huge opportunity losses. Another reason is the worldwide economic slump. Some Japanese companies have returned to profitability on the back of higher inbound spending due to the weak yen, but the global economy is still sluggish. This is having a huge impact on Vietnam, a country that relies on demand from other nations. Another related development is the collapse of the real estate market.
The Vietnamese human resources market usually grows during the first half of the year before gradually falling back in the second half. But various factors are leading us to expect that in FY 2023, many companies will instead see a rebound in sales during the second half of the year.
Leveraging a Cloud Database of Salary Data of 250 Companies and 50,000 Workers Per Year for Organizational HR Consulting
―How did you expand to outside Vietnam?
We began operating in Indonesia in 2012. We expanded there after someone we knew moved there. In 2014, we launched another business in Japan. We rebuilt our business model as we opened more businesses in Malaysia in 2016 and Singapore in 2018. We shuttered our Singapore business due to the pandemic. But in each of the countries we operate, we provide support through services like “iconic Job” to Japanese people wanting to work overseas and to local hires wanting to work at Japanese companies. Rolling out our business in different countries was a good opportunity to learn about their labor markets.
We are now working to leverage our company’s advantage by shifting to an expansion strategy in the Japanese and Vietnamese businesses where we are strongest, rather than providing a wide range of recruitment media services in each respective country.
―How do you see the future of the business?
We are currently focusing on our business in Vietnam. But in future, I hope that we will continue expanding to other countries, using the exceptional quality of the human resources data we hold to provide organizations with human resources consulting services. But when it comes to the volume of data collected, a single human resources company cannot hope to beat LinkedIn, Facebook, or other social media companies that may emerge in the future. But we believe we can provide value as a data business specific to organizational human resources. For example, we began collecting salary data in 2010. Each year we gather real data on the salaries of 50,000 workers from 250 companies. We analyze and add that data to a report we sell, and those sales are increasing every year.
In January 2024, we will launch the Iconic Empower cloud service. This service will allow us to diagnose organizational human resources issues and deliver solutions. The diagnostic service starts with basic items such as salary amounts and employee benefits, but it also covers 100 smaller items such as employee empowerment and psychological support. “Empowerment” means to help people make the most of their capabilities and give them confidence. We included this word in the name of the product because Japanese companies are currently facing the need to localize. Our goal is to achieve appropriate delegation of tasks such as hire, train, and evaluate locally-hired staff, as well as employee growth and empowerment.
The Key to Business Success in Vietnam is Improving Organizational Human Resource Frameworks from Hiring and Letting People Go
―What differences have you found between Japanese and overseas corporations in your data-gathering?
The biggest difference is the salary. Many European and North American companies are prepared to pay their experts in Vietnam the equivalent of ¥1 million monthly, but no Japanese company will do that. But I think that rather than bringing someone new over from Japan every 3 to 5 years and teaching them the business from scratch, you get better retention by hiring someone locally at ¥1 million per month. In the end, it’s also cheaper. Sometimes it is appropriate to bring someone over from Japan, but if you are employing someone in a specific role, it is always hard to get good performance with the Japanese system of rotating people in and out of Japan.
The ongoing digital transformation also makes people’s performance more visible. All work is recorded, and this will lead to people who are not interested in productivity or efficiency being driven from corporations. In Japan, there are still some companies using fax machines, saying that they cannot change to an email system because it is too difficult, etc. It seems to be very Japanese that the other businesses they work with let them get away with that.
The social structure in Japan also makes it difficult for people to express their individuality or unique talents. I think this is another reason for Japan’s declining presence. Japanese companies prioritize teamwork and an instinctive understanding between colleagues. They don’t like people trying to stand out. These Japanese thinking patterns are grounded in history, and personally speaking, I think they do contribute to what is uniquely good about Japan. I think the reason we rarely see bloody revolutions in Japanese history is that Japanese people usually come together to figure out what everyone is thinking and to try to calm things down before they get out of control. I believe that it is possible to gain some benefit from these unique Japanese approaches. For example, the reason that Japanese retailers and restaurants provide such high service quality is rooted in the Japanese ideals of hospitality and teamwork. Some aspects of this service can only be provided by human beings, no matter how far digital transformation continues.
―I think the concept of “specialists with particular jobs” differs between countries. How does it work in Vietnam?
Companies might have various systems for determining specialist roles. In many cases, there is a fixed salary for each role, but in Vietnam, there is often a range of salary amounts. Vietnamese culture likes to reward good effort, and Vietnamese people will request more money for good performance. This is why many companies determine salary ranges. In Vietnam, things go more smoothly if evaluations do not focus 100% on results, but also take effort into account. This culture chimes closely with the Japanese approach, which is one reason why Japanese companies find it relatively easy to do business in Vietnam.
―What you think Japanese companies should do to improve their HR systems?
Companies that prioritize loyalty and affiliation, preferring generalists to specialists, tend to assume lifelong employment. In many cases, these companies struggle to offer higher salaries and lack the human resources systems required to boost retention of high performers or encourage under performers to try their luck at a different job. Alongside recruiting strategies, designing an appropriate exit for underperforming employees helps keep talented people longer and prevents workforce stagnation. To make this possible, companies must be able to manage employees on a defined job basis. That requires support through appropriate evaluations and salary systems. Many of our client companies are achieving growth by designing employee exits into their evaluation systems. I may sound like I’m being an expert here, but if I’m honest, I began to notice the importance of human resources management when I compared our company to other companies to identify why our people would sometimes leave. We have made improvements, and our retention rate has improved.
For Japanese companies to grow their businesses in Vietnam, they need to establish a human resources system appropriate for Vietnamese culture to hire strong candidates. Then they have to empower them and delegate authority appropriately to maximize their contribution while localizing the business. They also have to maintain the beneficial parts of traditional Japanese employment culture.
ICONIC Group
10F Citilight Tower, 45 Vo Thi Sau Street, District 1, Ho Chi Minh City
https://iconic-intl.com
Provides corporate recruitment services, organizational human resources consulting, and support for job seekers. The company has five offices in four countries, operating in the Vietnamese cities of Ho Chi Minh and Hanoi, and branches in Indonesia, Japan and Malaysia.
Born 1980 in Aichi, Japan. After graduating from the School of Policy Studies at Kwansei Gakuin University in 2004, Yasukura joined a venture company, working in their franchising business division. After moving to Vietnam and finding employment in sales at a Japanese company, he founded ICONIC in 2008, becoming its representative director. The company provides corporate recruitment services, organizational human resources consulting, and HR technology business across Asia. In line with their corporate motto of “create beyond,” the company brings together talented employees and companies across international borders.
