Great Tokyo Exodus | financial times

When Akiteru Teraoka, 37, was working as a sales manager at the Tokyo headquarters of one of Japan’s largest recruiters, Basuna Group, he would leave home at 7 a.m. Five days a week carry an hour’s journey on an overcrowded train. Now, since moving last October to a remote island resort 600km away, he has been enjoying sea views on a 10-minute drive along the coast to work, after having a relaxing breakfast with his wife and two sons.

Teraoka heads a 110-person team on Awaji Island in western Japan. He still deals with his clients based in Tokyo but remotely – scheduling recruitment meetings, coordinating resumes for job applicants, and working closely with former colleagues in the Japanese capital. “Not only can I now spend more time with my family, but I can continue to build my career within the company from my Awaji,” he says. “I am doing tasks that I previously thought were only possible in Tokyo.”

Teraoka is one of 350 Basuna employees who have moved to the island since the company made headlines in September 2020 by announcing a plan to relocate many of its headquarters jobs there, along with 1,200 employees, by May 2024. Basuna is just one example of how companies are doing Japanese companies, from entertainment agencies to breweries to software developers, are rethinking their patterns of operation as a result of the coronavirus pandemic.

In his office in Awaji, with panoramic views of the blue Seto Inland Sea, Basuna Group CEO Yasuyuki Nambu says younger generations of employees, especially those with young children, are “increasingly changing their values, from being centered in Tokyo to seeking an environment surrounded by the sea.” and mountains.”

While hybrid work and remote work have changed workplace cultures around the world, the changes are particularly striking in the world’s third largest economy. Japan is notorious for its long working hours and low productivity, whereby being in the office – and leaving after your boss – is often more important than what actually gets done.

A series of natural crises, most notably the 2011 Tohoku earthquake and tsunami that triggered the Fukushima disaster, have been wake-up calls to Japan’s executives about the need to diversify risks. This was in line with the government’s policy, which provides subsidies for resettlement of businesses, primarily to support regions and “remove risks” in the capital. However, before the pandemic, the country’s decades-old work habits made the idea of ​​leaving Tokyo seem almost impossible, as clients, universities and ministries are concentrated there.

Now, this firm belief is being dismantled. According to business information firm Teikoku Databank, more than 350 companies moved their head offices from Tokyo and its neighboring prefectures to the countryside last year — a record number. For the first time in 11 years, the capital left more companies that moved to it. These figures backed up the population trend from the Ministry of Internal Affairs and Communications, which showed that in 2021 more people left 23 wards in central Tokyo than they had arrived, for the first time since records began.

The trend of companies moving to regional areas is unlikely to stop. “Companies will carefully select what works best in Tokyo,” says Yutaka Okada, chief research officer at Mizuho Research and Technology. Today, he adds, with increasing uncertainty amid the pandemic and Russia’s invasion of Ukraine, “the rest of the work is expected to be moved elsewhere in the cost-cutting effort” in order to prepare for the future.

Basuna’s Nambu, who moved to Awaji Island in 2020 and has barely returned to Tokyo since, said earthquake danger has always been one of the problems that kept him awake at night. He embraced the new work habits sparked by the pandemic to eventually help him relocate the head office away from the capital. As the company had been in agriculture and tourism in Awaji since 2008, the island was the option he had in mind. Nambu says executives from various industries have visited Basona’s new offices to understand how the process works.

Since announcing its resettlement plans, Basuna has opened five offices on Awaji Island, which has a population of 130,000. Some employees have moved to a new head office that opened in May, but the company has left other offices open. The company — which has not changed the salaries of relocated employees, despite the lower cost of living compared to Tokyo — has had to overcome challenges in everything from internet connectivity to the availability of schools and hospitals, and has bought land to build apartments to fill shortages. at home.

Being a pioneer in the transportation boom has brought unexpected benefits. Companies still reluctant to move their head offices out of the capital are beginning to outsource accounting and other back office functions, to gradually reduce their operations in Tokyo. Taking advantage of this demand, Basona enhanced its business process outsourcing services and expanded facilities by renting a floor in the island’s large mall.

Nambu says the company is attracting the attention of tech engineers who want to return home to the island, enabling Basuna to start new businesses that include avatars and metaverses. “We couldn’t attract these engineers in Tokyo, even if we paid high wages,” he says. The company plans to employ about 10 percent of its planned 1,200 employees locally on the island.

Other companies that have moved away from the capital are also creating new businesses. In July 2021, Tokyo-listed talent agency Amuse set up a new headquarters combining studios and practice rooms at the foot of Mount Fuji, about a two-hour drive away.

The company has kept its offices in Tokyo – which has reduced them significantly – as a “transit area” for preparing documents when meeting clients, for example. “The new head office serves as a creative content workshop,” said Nobuhiro Kashiwagi, CEO. “It’s not that we intend to move the whole process in Tokyo to the foot of Mt Fuji, but we want to encourage a way of working where places don’t matter.” So far, 20 people have moved to the mountainous region, but others mostly make the trip when necessary from their homes in the capital.

Not everyone is excited about the transition. Experts warn that it cannot succeed without proper consultation with staff, including providing allowances to enable them to visit Tokyo regularly. “Management should spend a significant amount of time explaining the purpose of relocation, because it means forcing employees to change their life plan,” says Yuji Kobayashi, principal investigator at Persol Research and Consulting. Since people still want to live in the booming capital, “companies can even be seen as using transportation as an excuse to lay off employees,” says Takeshi Hiyuki, a management consultant.

Although Nambu says living in Awaji contributes to the “spiritual wealth” of employees, some workers in Tokyo have mixed feelings. “I’m not going to the island,” says a Basona employee in her forties. “I have my family with a child here, and honestly, I have no problem living in Tokyo.”

Building relationships with local authorities and businesses is also key to a successful transition. “We were initially flooded with waves of questions like ‘Are you sure of the decision? “,” Will you stay here long? “,” Aren’t fish hurt in a nearby lake? Kashiwagi, who took months to impress the locals. Nambu echoes the challenge, saying that the community initially thought Basuna would leave if things didn’t go well.

“Just moving a company to a remote area cannot be a goal of stimulating regional areas,” says Keisuke Muramatsu, who heads KPMG Azsa’s public sector business, as the government had hoped. Although it is believed that more companies will make the decision to move away from Tokyo, the areas that welcome these newcomers are expected to play a vital role in arranging infrastructure and providing public services. He adds that how closely the public and private sectors work together will determine the future of decentralization in Tokyo.