外資系企業は給料がなぜ高い?年収1000万円を目指せるか解説!Why are salaries so high at foreign-affiliated companies? Explanation of how you can aim for 10 million yen a year!

It is said that foreign-affiliated companies have higher annual incomes than Japanese-affiliated companies, but why?

In this article, we will provide information for those who are considering changing jobs for the first time to a foreign-affiliated company with the aim of increasing their annual income, including the reasons for the high annual income at foreign-affiliated companies, company rankings, and annual income by industry, type of business, and age.

To conclude this article first, the reasons for the high annual salaries at foreign-affiliated companies are that there is no retirement benefit system, they are performance-based, and they are large companies that attract talented people. In other words, it can be said that this is because they spend labor costs on personnel who can produce results immediately.

Characteristics of annual salaries at foreign-capitalized companies are high monthly pay, an incentive system, and the same treatment for both women and men, but with greater discretionary authority from the immediate supervisor. In other words, instead of bonuses several times a year, it can be said that incentives, higher monthly pay, and evaluation without gender discrimination can keep employees motivated.

While there are some foreign-affiliated companies with average annual incomes exceeding 30 million yen, there are also many companies by industry with average annual incomes in the 10 million yen range, and by age group, it is considered possible to aim for 10 million yen from the section manager level in one's 30s.

In order to achieve ¥10 million in annual salary, you will need to achieve results in your work, improve your English skills, negotiate with your superiors for salary increases and promotions, and appeal to them about your achievements.

We hope you will read this article carefully and succeed in your job change to a foreign company.

Here are some of the reasons why foreign-capital companies have higher annual incomes.

Foreign-affiliated firms often invest in people who can deliver results immediately, rather than guaranteeing long-term service to their employees, as is the case in Japanese-affiliated firms, which leads to higher annual salaries.

Here are four reasons why.

Many companies do not offer retirement benefits.

Many foreign-affiliated companies do not offer retirement benefits.
Therefore, instead of having a long-term corporate burden for retirement benefits, their annual income is said to be high.

Because of the strong culture of lifetime employment in Japanese-affiliated companies, retirement allowances are often one of the attractive benefits that motivate long-term employment. However, because the company provides the funds to accumulate retirement allowances, the company bears the burden of any shortfall in funds.

Even if there is no retirement benefit plan, some foreign-affiliated companies have corporate pension plans or defined contribution pension plans. In particular, many foreign-affiliated companies have adopted a defined contribution pension plan, in which individuals voluntarily contribute to a lump-sum payment and the pension is determined by investment income.

Remuneration commensurate with performance

Many foreign-affiliated companies use a performance-based system, which results in higher annual salaries.
The advantage for the worker is that he or she can receive compensation commensurate with his or her performance, and the advantage for the company is that labor costs can be distributed based on performance, regardless of position.

Large company scale

Foreign-affiliated companies are globally operating companies that have already established a strong brand and are highly profitable, and have expanded into Japan. Since they are already large, they are able to offer higher annual salaries.

Attracting excellent human resources

Foreign-affiliated companies tend to attract excellent human resources who can produce clear results because they are basically results-oriented.

In addition, they are proactive in hiring due to frequent organizational changes and mid-career recruitment, so they are able to attract excellent global human resources suited to their purpose, which allows the company as a whole to grow and increase earnings and annual income for employees.

Foreign-affiliated companies have different characteristics from Japanese-affiliated companies, which can have a significant impact on salary increases and promotions. Here are four characteristics of annual salary in foreign-capitalized companies.

Base salary + incentive salary system

In general, foreign-capital companies, especially in sales, pay a base salary plus incentives.

Incentive is a salary system in which you are paid if you achieve 100% or more of your set personal goals. The assumed annual salary at the time of hiring may include the incentive for reaching 100%, so if you do not achieve it, your annual salary will be lower. Therefore, check in advance whether the salary amount in the job offer includes incentives.

In the case of back-office and engineering jobs, there are cases where base salary + deemed overtime pay is included, and some companies offer the possibility of changing to an incentive system depending on the nature of the job. This depends on the company and industry.

Women and men are treated the same

In many foreign-affiliated companies, annual salary increases are possible with the same treatment regardless of age or gender. Therefore, the average annual salary does not differ greatly by gender as is the case in Japanese companies.

In addition, many companies have a culture of respecting diversity and provide a comfortable working environment that matches the stage of life, making it a rewarding environment especially for women who want to progress rapidly in their careers from their 20s.

Large monthly payouts and small bonuses

In foreign-affiliated companies, salaries are determined on an annual salary basis, which means that the monthly payment is higher when divided by 12 months. Bonuses are not always paid every year. Basically, they are paid based on the company's global performance, and the rate at which they are paid depends on the position. The amount paid also depends on the individual's performance.

Conversely, many Japanese-affiliated companies pay a small monthly bonus and a large bonus, so be sure to check this when changing jobs at a foreign-capital company.

Direct supervisors have a lot of discretion.

At foreign-affiliated companies, your work content, promotion, salary, and other evaluations are greatly influenced by the discretion of your immediate supervisor. This is because foreign-affiliated companies frequently change their internal organizations in order to adapt to acquisitions, mergers, business performance, and market trends, and their supervisors change frequently accordingly.

Therefore, in order to receive evaluation based on your performance, it is necessary to be flexible and adapt to the direction of your supervisor, and to do what you want to do.

So how high is the average annual salary of foreign-affiliated companies? Here we introduce the top 10 foreign-affiliated companies with the highest average annual salaries.

As a conclusion, the company with the highest average annual salary is Deutsche Securities, with an average annual salary of over 30 million yen. The top 10 companies are in the financial and IT industries, and most of the headquarters are in the United States.
The following is a ranking of the top 10 companies in order of highest to lowest average annual salary as listed on openwork, a word-of-mouth website.

No. 1 Deutsche Securities Inc.

Image credit: History (db.com)

The top domestic company by a wide margin from the second place is Deutsche Securities Inc. with an average annual revenue of 32.56 million yen.
The company's corporate culture puts the customer first and emphasizes harmonizing risk and profit, attracting and developing outstanding talent, promoting teamwork and partnerships, and caring for the communities in which it operates.
Company Website:Deutsche Securities Website

 

No. 2 Visa Worldwide Japan K.K.  

Image credit:[Official] Visa Visa Card - One-touch payment around the world

In second place is VISA, a payment brand, with an average annual revenue of 21.79 million yen.
VISA's services are deployed in more than 200 countries and regions around the world as an innovation that connects people, creating cutting-edge technology available to everyone in the world.

Company Website:[Official] Visa Visa Card, One Touch Payment in the World | VISA

No. 3 Facebook Japan, LLC

Image Credit: Company Information, Culture, Philosophy | About Meta
 

In third place is Facebook Japan LLC, the Japanese subsidiary of Meta, a provider of "Facebook" and other social networking services, with an average annual salary of 20.96 million yen.
Meta's products are used by more than 3 billion people worldwide to share ideas and provide assistance.

Company Website: About Us, Culture, Philosophy | About Meta

No. 4 - No. 10

Here is the list of foreign companies with the highest average annual salary from 4th place onward, again dominated by companies in the financial industry, especially securities firms, and the IT industry, especially those providing cloud services.
 

Next, we will introduce the average annual salary ranking of foreign-affiliated companies by industry, with the average annual salary of the top 8 companies by industry as listed on the review site openwork.

This time, we will introduce the IT industry, the financial industry, manufacturers, and the consulting industry. The average of the top 8 companies in all industries exceeds 10 million yen.

IT Industry

The average annual salary of the eight companies with the highest average annual salaries in the foreign IT industry is 16.23 million yen.

By job type, annual salaries are higher for IT consultants, project managers, and other management positions, as well as for salespeople who are paid incentive salaries.

Finance (Banking) Industry

The average annual salary of the eight companies with the highest average annual salary in the foreign financial industry is 19.98 million yen.

Since most of the jobs in this industry employ incentive pay, annual income tends to vary depending on the individual.

Manufacturers

The average annual salary of the eight companies with the highest average annual salaries among foreign-affiliated manufacturers is 11.65 million yen.

By job type, annual salaries tend to be higher for marketing and consulting positions and for managerial positions.

Consulting Industry

The average annual salary of the eight companies with the highest average annual salaries in the foreign-affiliated consulting industry is 13.04 million yen.

Companies in the consulting industry can be divided into three main categories: general, specialized, and strategic, with strategic companies tending to have higher annual incomes.

Next, based on the "2023 Report on Market Survey on Compensation in Japan" by Mercer Japan K.K., we will introduce the trend of average annual salary of foreign-affiliated companies by age and the situation of changing jobs. We will compare the annual salary by possible position by age with Japanese companies and the points that appeal to you for changing jobs.

In this report, we will introduce the following age groups: early 20s (1-3 years), late 20s (3-5 years), 30s (section manager class), and 40s and 50s (department manager class). The range of salary increases when romoted is greater at foreign-affiliated companies.

Early 20's

For general employees in their early 20s who are in their first to third year of employment, annual salaries at foreign-affiliated companies are around 5.25 million yen.

Salaries at Japanese-affiliated companies are 4.45 million yen, or 18% higher than those at foreign-affiliated companies.

When changing jobs at a foreign-affiliated company, the main points of appeal for those in their early 20s with little work experience will be their experience in a multinational environment, English language skills, and qualifications related to the job. In addition, quantifying the results of your previous job will also appeal to your reporting skills.
 

Late 20's

In their late 20s, general employees in their third to fifth year of employment earn around 6.49 million yen at foreign-affiliated companies.

Salaries at Japanese-affiliated companies are 5.59 million yen, or about 16% higher than salaries at foreign-affiliated companies.

When changing jobs at a foreign-affiliated company, the main point of appeal is your 3-5 years of experience as a specialist. This is the recommended age for changing jobs from a Japanese company to a foreign-capital company, as it is an advantage when changing jobs in the same industry and there are many job offers.

30's

A 30-something manager in his/her 30s is in the section manager class, and his/her annual salary at a foreign-affiliated company is around 13.98 million yen.

Salaries at Japanese-affiliated companies are 10,620,000 yen, and salaries at foreign-affiliated companies are about 31% higher.

When changing jobs at a foreign-affiliated company, the main point of appeal is a proven track record as a playing manager. In addition, since English proficiency is required, the difference in annual salary between Japanese and non-Japanese companies is even greater.

40's and 50's

In their 40s and onward, the annual salary at foreign-affiliated companies is around 19.16 million yen, while that at Japanese-affiliated companies is 14.08 million yen, or 36% higher.

Salaries at Japanese-affiliated companies are 14,080,000 yen, or 36% higher than salaries at foreign-affiliated companies.

When changing jobs at a foreign-affiliated company, the main points of appeal are English language skills, achievements, and personal connections.
Especially, personal connections are important for companies when starting a new business, so they will be very useful.

References: Mercer, Japan Total Reward Survey
Mercer releases the results of the Japan Total Remuneration Survey 2023 (mercer.com)

Those who have joined a foreign company as a general employee and wish to further increase their annual income, especially those who want to achieve an annual income of 10 million yen, should aim to be promoted to the section manager level. What actions are necessary to achieve this? Here are four key points of necessary actions.

First, produce results.

First and foremost, produce results and quantify them. In a foreign company, it is necessary not only to produce results, but also to clearly present those results to your superiors, and your presentation skills will be tested. Making a presentation with easy-to-understand graphs and other quantifiable information will be a major point of appeal.

Negotiate for a raise

Once you have made your appeal to your boss, negotiate for a raise. However, even if you are getting good results and your boss is willing to give you a raise, he or she may not immediately agree to your request if the company's performance is deteriorating or if there is a limit to the amount of pay increase within your team. Don't give up and keep accumulating results that appeal to your boss.

The most likely times to have your request honored are when the company is doing well, when you need to follow up on a retiree's work, or when you apply for an open position on a team. It is also a good idea to negotiate with the right people at the right time.

Improve your English skills

As you get promoted, you will be required to interact with and manage more team members outside of Japan, and you will be asked to concurrently assume responsibility for regions outside of Japan. You will also have more meetings and negotiations with the head office. Therefore, English proficiency is essential. If team members are also multinational, it is a good idea to be familiar with non-native English, as pronunciation can be difficult to understand.

For more information on the English language skills required for a foreign company, please refer to this article.

Making an internal transfer or changing jobs

Even if you are taking positive action, there may be times when your boss is not a good fit or does not agree to negotiate for a raise. In such cases, it may be a good idea to consider an internal transfer or job change. For this reason, it is important to always keep your antenna up to date on developments both inside and outside the company and to be proactive in networking with others.

If you are considering a career change, please use a recruitment agent. A recruitment agent has many years of experience and close connections with companies, and can be a strong ally for job seekers.

The reason for the high annual income of foreign-affiliated companies is that they do not have a retirement benefit system, are performance-based, and attract talented people due to the large size of the company. In other words, it can be said that this is because they spend labor costs on personnel who can produce results immediately.

Characteristics of annual salaries at foreign-capitalized companies are high monthly pay, an incentive system, and the same treatment for both women and men, but with greater discretionary authority from the immediate supervisor.
In other words, instead of bonuses several times a year, it can be said that incentives, higher monthly pay, and evaluations that do not discriminate between men and women can keep people motivated.

While there are some foreign-affiliated companies where the average annual salary exceeds 30 million yen, there are also many companies by industry where the average annual salary is in the 10 million yen range, and by age group, it is considered possible to aim for 10 million yen from the section manager level in one's 30s.

In order to reach 10 million yen, it is possible to achieve this goal by achieving results, improving English language skills, negotiating with your boss for a raise and promotion, and appealing to your boss about your achievements.

At United World Inc., our dedicated career advisors work closely with each and every one of our candidates to support their job search. After carefully listening to your detailed requirements and career plans, we will introduce you to the best job opportunities that suit you best, so please feel free to contact us if you want to conduct your job search efficiently.

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