Corporate alumni system
Lifetime employment has long been the cornerstone of Japan’s labor system. It’s not uncommon to see companies treat employees that leave the company before retirement due to personal reasons as “traitors.” Given the rapidly evolving situation with more people switching jobs or leaving the organization to start their own business, the presence of an alumni network where companies and former employees stay connected and support one another outside of the employment relationship now brings more benefits than ever before.
For example, the alumni network of Dentsu Inc. is built with the aim of achieving open innovation. Dentsu’s operations are outsourced to approximately 230 ex-employees by entering into agreements of up to 10 years’ duration with them. Besides fixed compensations, ex-employees are incentivized with performance-based rewards based on the profitability of outsourced business. From spring 2020, Dream Incubator Inc. has also been outsourcing to about 170 former consultants (70% of its ex-employees). Corporate alumni system is expected to become a new model replacing the lifetime employment system in Japan.
Source: Nikkei
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