Misconceptions about Foreign Benefits: A thorough explanation of why they are not good and the types of benefits available.

2024.07.31

  • Industry Information
外資系福利厚生の誤解:よくないといわれる理由や種類を徹底解説

Many people have the image that foreign-capital companies do not offer good benefits compared to Japanese companies, such as retirement benefits and no housing allowance.

In this article, we will thoroughly explain the concept of benefits at foreign-affiliated companies and the benefits available at foreign-affiliated companies. We hope you will find it useful!

The reason why people say that foreign companies do not offer adequate benefits is a difference in mindset.


Foreign-affiliated companies that do not offer benefits such as retirement and housing allowances may be inferior to Japanese-affiliated companies. However, the reason why these benefits are not available in foreign-affiliated companies is because they are different from those offered by Japanese-affiliated companies. The reasons for this are explained below.

 

Japanese-affiliated companies are assumed to employ people for life.

A major characteristic of Japanese-affiliated companies is “lifetime employment,” in which employees work for the company they joined after graduation until retirement. With the aim of attracting and retaining talented employees, they are working to enhance their benefit packages.

Japanese-affiliated companies are increasing employee satisfaction by providing housing allowances and subsidies for physical examinations to ensure stability in the lives and health of employees and their families, and by creating a better work environment, including the establishment of in-house cafeterias. Retirement benefits are meant as a consolation payment to employees who have contributed to the company over the years, and are an expression of Japanese companies' awareness of “supporting employees for the rest of their lives.

For employees, a full range of benefits is one of the factors that determine whether or not they can enjoy a stable life if they work for this company.

Many Japanese-affiliated firms aim to have their employees contribute over the long term, so they provide a good working environment with a full range of benefits.

 

Foreign companies have a culture of changing jobs.

Foreign-affiliated companies do not have the concept of lifetime employment, and it is common for employees to change jobs and advance their careers.
Since employees are expected to change jobs after a few years, they tend to offer benefits that “support skill development and personal growth” and “maintain work-life balance.

Some foreign-affiliated firms have introduced sabbatical leave or volunteer leave to help employees review their careers, acquire new skills, and maintain a work-life balance, or they pay for the purchase of books to improve their skills.
Foreign-capital companies, where meritocracy is deeply rooted, offer benefits that support lifestyle and career development.

In foreign-affiliated companies where you change jobs and have a short tenure, you will rarely see benefits such as retirement and housing allowances like those offered by Japanese-affiliated companies. The funds that Japanese companies accumulate as retirement allowances are added to salaries at foreign-affiliated firms. The salaries of foreign-affiliated firms are higher because the benefits are included in the salary. The fact that the use of the money is not limited also allows for more flexibility in the use of the money.

Even foreign-capital companies offer minimal benefits.


There are two types of benefits: “statutory benefits” and “non-statutory benefits. Even foreign companies, which have a different approach to benefits, are required by Japanese law to provide “statutory benefits. Let's take a look at “statutory” and “non-statutory” benefits.

 

legal welfare

Statutory benefits are benefits that a company is required by law to provide. There are six types of statutory benefits

Health InsuranceInsurance for employee injuries, illnesses, and other emergencies
Employee Pension InsuranceInsurance for employees to save for their retirement or in case of severe disability.
Long-term care insuranceInsurance to reduce the cost burden of nursing care for the elderly from the age of 40.
Unemployment insuranceInsurance designed to protect employees from unemployment, leave of absence, and job loss.
Workers' accident compensation insuranceInsurance for employees who are injured while working or commuting to and from work, or who become ill as a result of their work.
Child and child care contributionA system designed to reduce the cost of childcare and promote the development of the next generation.

Companies that do not provide legal benefits, even for foreign companies, are in violation of the law and will be penalized.

 

non-statutory welfare program

Non-statutory benefits are benefits that are not required by law to be implemented. They are set up and introduced by companies on a voluntary basis and vary from company to company.

Non-statutory benefits include the following

  • Retirement allowance
  • Housing allowance
  • Periodic medical checkups
  • Company cafeteria (free or low-cost)
  • Discounts for use of sports clubs
  • recreational facilities

In many cases, foreign-affiliated companies do not provide non-statutory benefits or provide a minimal level of benefits, and instead set the annual salary at a higher level.

The benefit that employees really want is a “vacation program.


According to a 2017 survey conducted by the National Institute for Labor Policy and Training (NILPT), the following benefits were desired by employees

 

Survey period: October 28-December 20, 2017; number of persons surveyed: 8,298
Reference: “Survey on the Actual Status of Welfare Policies in Companies - Results of Company/Employee Questionnaire Survey - P52,” by the Japan Institute for Labour Policy and Training (JILPT)

The top 10 most popular leave systems were: congratulatory or condolence leave system, sick leave system (other than paid leave), sick leave system, refreshment leave system, additional paid leave, and childcare leave system that exceeds the legal limit.

This suggests that the benefit that employees really want is a “leave system. Since many foreign-affiliated companies offer benefits aimed at maintaining work-life balance, their leave systems are also well-developed.

Flexible foreign capital! Benefits related to working style


Compared to their Japanese counterparts, foreign-affiliated firms offer benefits that improve work-life balance.
Here are three examples

  • Abundant vacation time
  • Full remote
  • Flexible working hours

Abundant vacation time

In addition to paid leave, foreign-affiliated companies offer a variety of other leave programs as part of their benefits package. Although the types of leave offered vary from company to company, the following are typical leaves of absence.

  • Sick leave (paid leave for physical illness)
  • Family care leave (leave to care for a sick family member)
  • Pregnancy leave for medical checkups
  • Birthday leave
  • Maternity/paternity leave
  • Christmas leave
  • Sabbatical leave (extended leave given to employees who have been with the company for a long period of time)
  • Volunteer leave (leave to participate in social contribution activities)

Not only are vacations available, but they are easy to take at foreign-affiliated companies. The environment is such that you can take these leaves, including paid leave, simply by applying for them, as long as you produce results in your own work.

 

Full Remote

A characteristic of foreign-affiliated companies is that you are free to work wherever you want as long as you are producing results. Some employees utilize full remote while leaving their children at daycare while they are young, to cope with hectic daycare pick-up and drop-off times or sudden illnesses of their children.

 

However, this is not the case for all employees. It is operated when there is a positive aspect, such as increased productivity, considering the nature of the job.

 

Therefore, depending on the type of job, if you have just changed jobs, or your immediate supervisor's way of thinking, there may be cases where a full remote system is not utilized. When changing jobs, be sure to check the conditions carefully.

 

Flexible Work Hours

Many foreign-affiliated companies have introduced flextime. Since you manage your own work, you have control over your working hours as well.

Flexible working hours are divided into core hours, during which all employees must come to work, and flexible hours, during which employees are free to come and go before or after core hours. This allows employees to balance work with their personal lives, such as going to the hospital before coming to work.

Recently, an increasing number of foreign-affiliated companies have introduced a “super-flex system” in which there is no core time at all.

Some foreign companies have! Benefits that cover retirement


Most foreign-owned companies do not offer retirement benefits as a benefit. However, some companies offer the following benefits to cover retirement costs

  • RSU (Restricted Stock Unit)
  • Defined contribution pension plan
  • Full social insurance premiums

 

RSUs

RSUs are benefits that offer significant financial advantages. When an employee achieves conditions set by the company, such as “a certain period of continuous service,” he or she is granted shares of the company's stock free of charge.

For example, suppose an employee signs an employment contract that provides 300 shares of the company's stock in addition to salary and bonus if he or she continues to work for the company for three years after joining the company. The employee would receive 100 shares in the first year, 100 shares in the second year, and the remaining 100 shares in the third year. At this time, the employee will receive the number of shares promised, even if the stock price fluctuates.

This makes RSUs a highly beneficial benefit that employees are sure to receive.

 

Defined Contribution Pension Plans

An increasing number of foreign-affiliated companies are introducing defined contribution company pension plans as a substitute for future retirement benefits.

The company sets aside a set monthly contribution, and the employee selects and manages his or her own investment from funds that the company has partnered with. The invested money is received as a pension when the employee reaches retirement age, and can be used as a substitute for retirement benefits.

The advantage of a company defined contribution pension plan is that the premiums are registered as personal assets, so even if the company goes bankrupt, the full amount is protected, and the money can be invested as is even if the employee changes jobs.

 

Full Coverage of Social Insurance Premiums

Although social insurance premiums are usually paid by both the company and the employee, some foreign-affiliated companies pay the full amount. As a result, the amount of take-home pay increases.

In this case, although the money is not the same as retirement benefits, the financial benefits are significant, and the employee can prepare for the future by investing the money himself/herself.

Foreign companies need to improve their skills! Self-development benefits


Foreign-affiliated companies prefer people who learn to improve their skills on their own. That is why we support our employees with the following benefits

  • Book purchase expenses
  • English conversation lessons
  • Qualification support system

 

Book Purchase Expenses

Many foreign-affiliated companies are committed to self-development. As part of this effort, there are benefits programs that allow companies to pay for the purchase of books.

Generally, the maximum amount of money for book purchases is set on a monthly or yearly basis. This reduces the financial burden and makes it easier to obtain expensive technical books and other materials, which helps to improve skills.

 

English Conversation Lesson

English conversation is a necessity at foreign-affiliated companies. Many foreign-affiliated companies offer benefits that support English conversation lessons to improve English skills.

There are two types of English conversation lessons.

  • Cases in which companies provide them to employees as training during or after work hours.
  • Employees choose an English conversation school of their own choosing, and the company pays a portion of the cost.

In addition to English conversation lessons, companies may also pay for TOEIC exam fees or English conversation app purchases.

 

Qualification Acquisition Support System

The Qualification Acquisition Support System supports foreign companies in acquiring qualifications necessary for their work.

There are three main support methods.

  • The company pays all or part of the cost of acquiring qualifications, such as course fees.
  • Rewards are provided after certification acquisition.
  • Providing a qualification allowance after acquiring a qualification

Since many qualifications are expensive to obtain, companies provide support to lower the hurdle to obtaining them, thereby providing an opportunity to obtain qualifications.

Convenient to have! Unique Benefits for Foreign Affiliates


There are three other unique benefits that only a foreign-affiliated company can offer.

  • Free snacks and drinks
  • Babysitting support
  • Team building

 

Free Snacks and Drinks

Many foreign-affiliated companies offer a benefit program that provides free drinks and snacks.

Coffee, tea, and snacks are placed in patenries and other locations, and employees are free to drink them. Some people also place souvenir snacks and other items, making it a place for employees to relax.

 

Babysitter Support

Babysitter Support is a program designed to help employees balance work and child-rearing.

The program provides financial assistance for the use of babysitters until the children reach a certain age. This system is beneficial to both employees and the company, as it allows employees to work without worrying about the time required to take their children to and from daycare, creating an environment in which they can concentrate on their work and improve their performance.
The program is beneficial to both employees and the company.

 

Team Building

Another feature of foreign companies is “team building” expenses aimed at improving team productivity.

Team building expenses are for holding lunch meetings, social gatherings, and other events to promote communication. In Japanese companies, employees may also pay for social gatherings, etc., but in foreign-affiliated companies, the team-building expenses cover the costs.

Although foreign-affiliated companies are often thought to be dry in terms of human relations, they provide opportunities to promote communication among employees and foster good teamwork.

Three ways to find out about benefits at a foreign company


There are three ways to find out about benefits at a foreign company

  • Use an agent with a strong background in foreign-affiliated companies
  • Company websites
  • Word of mouth and SNS sites

 

Recruitment agents strong in foreign-capitalized companies

Using a recruitment agent that specializes in working with foreign-affiliated companies is recommended when considering a career change to a foreign-affiliated company. Not only can a recruitment agent introduce you to the company of your choice, but they can also provide detailed information on the company's benefits package and position, as well as ask questions on your behalf.

Job postings do not always list all of the benefits offered. If you want detailed information, use a recruitment agency that is strong in foreign companies. With United World, your dedicated career counselor will contact the company and make sure all your questions are answered.

 

Company website

The career site within a company's website contains information about the company's benefits. In order to attract the best talent, it is a good idea to check out the company's benefits as well as the ease of working there.

 

Word-of-mouth sites and SNS

There are ways to refer to a company's reputation through word-of-mouth websites and social networking sites. You can find specific figures such as monthly overtime hours and paid vacation rate, as well as real voices from employees and former employees on various items such as “work-life balance” and “reasons for leaving”. Sometimes, information on benefits is also included, which may be helpful.

However, please note that in some cases the information may be out of date.

Foreign-affiliated company benefits support the way we work! Let's understand the difference from Japanese companies!


Unlike Japanese-affiliated companies, foreign-capital companies' benefit packages emphasize “skill improvement and self-development” and “emphasis on work-life balance. If you consider the total package, including salary and work-life balance, you may be able to find a foreign company with better conditions for you than you have now.

It can be time-consuming and difficult to find a company that suits you and the way you want to work alone. In such a case, please leave it to United World! We will introduce you to companies that are a perfect fit for you and support you until you successfully change jobs!

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