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Jul 227 min read

The Evolving Japanese Consulting Market and the Impact of Digital Transformation: Latest Job Market Trends



Japan's consulting trend

1. Introduction


The management consulting industry is highly popular among top students worldwide, and Japan is no exception. This field is recognized as an attractive first career due to the opportunity to work on diverse projects across various industries.


In recent years, there has been increasing demand for growth strategies, digital transformation (DX), and Environmental, Social, and Governance (ESG) initiatives within Japanese companies. In response, consulting firms are actively hiring to meet these needs. Additionally, the demand for Project Management Offices (PMO) is particularly high, leading to an increase in recruitment for these roles.


In this article, we will provide an overview and trend of the Japanese consulting industry, discuss the necessary skill sets, explore potential career paths, and outline specific steps for the job application process.


2. Overview and Trend of the Japanese Consulting Industry


2.1 Industry History and Current State


Development and History of the Consulting Industry: The foundation of Japan's consulting industry was established during the post-war economic recovery period, experiencing rapid growth from the 1980s onwards. Management strategy consulting, in particular, has played a crucial role in developing corporate growth and competitive strategies.


Current Market Size: As of 2024, the consulting industry in Japan has become highly diversified. The market size has reached approximately 2 trillion yen, with an expected annual growth rate of around 3.5% over the next few years*1.


2.2 Major Consulting Categories and Firms


Strategy Consulting Firms: These firms provide consulting services on corporate direction, including management and growth strategies.

  • International Firms: McKinsey, BCG, Bain, A.T. Kearney, Roland Berger, Arthur D. Little, Simon-Kucher, YCP Solidiance, among others.

  • Japanese Firms: Dream Incubator, Corporate Directions, IGPI, and more.


Comprehensive Consulting Firms: These firms address business challenges from strategy to execution.

  • Accenture, BIG4 (Deloitte, PwC, EY, KPMG), ABeam, BayCurrent, etc.


Think Tank Consulting Firms: These firms conduct research and provide consulting services not only to private companies but also to public institutions.

  • Key firms in Japan include Nomura Research Institute (NRI), Mitsubishi Research Institute (MRI), and Japan Research Institute (JRI).



2.3 Future Directions


Acceleration of Digital Transformation: There is an increasing focus on supporting companies in adopting advanced technologies like AI and IoT to maintain competitiveness.


ESG and Sustainability: With a growing awareness of environmental protection and social responsibility, ESG investments are expanding.


Global Expansion and Regional Specialization: As Japanese companies expand globally, there is a demand for consulting services that are adapted to local business practices.


Impact of Generative AI: The significant advancements in generative AI in recent years have revolutionized the consulting industry. By automating traditional analyst tasks and extracting insights from vast amounts of data, consultants can now focus on higher-value activities.

  • Efficiency Improvements: Generative AI can quickly derive insights from large datasets, automating much of the traditional data analysis work and significantly improving efficiency. Examples include market size estimation and price calculation.

  • Cost Reduction and Quality Improvement: AI automation leads to cost savings and quality improvements in consulting projects, thereby increasing the added value for clients.

  • Promotion of Innovation: The development of new business models and solutions leveraging AI technology is underway. Consulting firms are expected to provide more innovative services.



3. Essential Skills for Consultants


3.1 Fundamental Skills


  • Analytical Skills: A strong ability to analyze data is crucial. This involves gathering and organizing data, identifying trends and patterns, and pinpointing the root causes of issues to propose actionable solutions.

  • Logical Thinking: Consultants need to use logical thinking to organize and systematize complex problems. This is essential for making persuasive recommendations to clients, especially during the problem-solving process where clear and consistent reasoning is required.

  • Communication Skills: Smooth communication with clients is vital for building trust and maintaining effective relationships.

  • Presentation Skills: The ability to effectively present proposals and analytical findings is essential.


3.2 Specialized Skills


  • Industry Knowledge and Expertise: Familiarity with the client’s industry and business model is necessary. In strategy consulting, in-depth industry knowledge is particularly important.

  • IT Skills: Proficiency in digital tools and systems is indispensable. Expertise in technologies such as AI, machine learning, and cloud computing is highly valued.

  • Project Management Skills: Skills in planning, progress tracking, resource allocation, and risk management are necessary for managing projects effectively.


3.3 Soft Skills


  • Leadership: Consultants must effectively lead project teams, enhance team motivation, and provide guidance towards achieving goals.

  • Teamwork: The ability to collaborate with other team members and facilitate smooth communication to advance projects collectively is crucial.

  • Adaptability: Consultants need to quickly adapt to new situations and challenges and respond flexibly.

  • Customer Orientation and Relationship Building: Understanding client needs and providing corresponding value is essential. Building strong relationships with clients is also key.



4. Career Path for Consultants in Japan


4.1 Entry-Level Positions


  • New Graduate Recruitment and Internships: Many consulting firms hire entry-level consultants through new graduate recruitment programs and internships.

  • Early Career Responsibilities: Entry-level consultants typically start with support tasks such as data collection and analysis, and creating presentation materials.


4.2 Mid-Career


  • Promotion from Consultant to Senior Consultant: At this stage, consultants are expected to perform more advanced analyses and engage directly with clients.

  • Specialist Career Path: Consultants may deepen their expertise in specific industries or functions, becoming specialists in those areas.


4.3 Senior Level and Partnership


  • Roles of Managers and Directors: Managers and directors are responsible for overseeing entire projects, building client relationships, and business development. Acquiring new clients and deepening relationships with existing ones are crucial as these directly impact the firm's revenue.

  • Requirements and Process for Becoming a Partner: Becoming a partner requires exceptional performance and leadership, strong networking skills, and the ability to drive business growth. Sales skills are particularly important for proposing solutions to clients and securing contracts.



5. Job Hunting as a Consultant in Japan


5.1 Job Market Situation


Recent economic concerns, such as inflation and potential recessions in the US, have led to negative news from some Western-based consulting firms, including layoffs, reduced partner promotions, and halted mid-career recruitment. This might make some worry about the outlook for the consulting industry in Japan. However, as mentioned earlier, Japan's consulting market is expanding, with the number of projects increasing yearly. There is a notable rise in projects related to Digital Transformation (DX) and Environmental, Social, and Governance (ESG) initiatives.

With the growth of the digital sector, there is a high demand for professionals skilled in the latest digital technologies, especially those with expertise in generative AI, data science, and machine learning. Many consulting firms are creating new specialized positions, valuing professionals who are well-versed in these advanced digital technologies.


However, the digitalization of the consulting industry does not necessarily lead to an increase in job numbers. The recent rise of generative AI has significantly impacted the future job market within the industry. As generative AI improves efficiency in data analysis and report generation, it automates parts of the consulting workflow. This could eventually lead to a decrease in the need for traditional roles, potentially reducing job numbers in the mid to long term.


The job market in the consulting industry shows a dual trend: on one hand, there's a demand for new skill sets and the creation of specialized roles; on the other hand, advancements in AI are automating traditional tasks. Therefore, the trend is shifting towards positions requiring strategic thinking and creative problem-solving. Additionally, there is an increasing demand for individuals with a global perspective who can respond to both domestic and international economic conditions and market fluctuations. These trends indicate that flexibility in skill development and career restructuring is becoming increasingly important in the consulting industry.


5.2 Steps for Job Hunting


Creating a Resume and CV:


Networking:

  • Obtaining first-hand insights from employees in the consulting industry is vital for industry analysis, making networking indispensable.

  • Employee Visits: Use tools like Jelper Club, LinkedIn, and BizReach to efficiently arrange employee visits. Many Jelper Club members are employed in consulting firms. You can directly message these members through Jelper Club to schedule appointments for employee visits.

  • In-Person Events: Attend seminars and conferences to interact face-to-face with industry professionals. The Soirée Tokyo, hosted by Jelper Club, is an excellent event to network with Jelper Club members active in the consulting industry. Participate in The Soirée Tokyo to engage with fellow members and build connections.


Interviews:



6. Compensation for Consultants in Japan


6.1 Salary and Benefits


Salary: Consulting offers high salaries compared to other industries. According to the "Industry Map 2023 Edition" by Toyo Keizai, the average annual income across all industries is 6.62 million yen, whereas the consulting industry boasts an average of 11.46 million yen. This ranks second out of 64 industries listed.


Benefits and Other Perks:

  • Medical Insurance and Pension Plans: Comprehensive medical insurance and pension schemes.

  • Training and Education Support: Opportunities for overseas study and support for obtaining an MBA.

  • Work-Life Balance Support: Options for remote work and flexible working hours.


6.2 Work-Life Balance


Working Hours and Leave Policies:

  • Working Hours: Long hours are often required during busy periods.

  • Leave Policies: In addition to legally mandated annual paid leave, there are special leave and long-term vacation options.


Stress Management and Health Support:

  • Mental Health Support: Access to counseling services and a strong understanding of mental health needs.

  • Fitness and Health Management: Memberships to fitness facilities and sports clubs, regular health check-ups, and vaccinations.



7. Conclusion


The consulting industry in Japan continues to grow and is expected to keep expanding over the next few years. With high salaries, excellent benefits, and diverse career paths, consulting is an attractive career choice. Jelper Club plans to continue registering consulting firms and providing exciting career opportunities, so be sure to regularly check the "Job Updates."

Furthermore, Jelper Club will continue publishing articles about various industries. Feel free to ask questions or share your curiosities in the "Feed" about any industry you are interested in.



(Editor: Jelper Club Editorial Team)

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