The Go-To Business Design Partner

Japan, as it stands today, is facing a demographic crisis, not only as the world’s oldest population but one that is looking at huge declines over the next 15 years. This is leading to a number of challenges, including a staffing issue, with experts predicting that by 2040, Japan will face labor shortages of 11 million people. How has this demographic shift affected your work, and to what extent do Japanese companies need to look overseas to secure future success?

For each and every industry in Japan, the shortage of manpower has become the pressing issue of the day. With each industry vying to secure human resources from the same smaller pool, it has become rather difficult, and this is compounded by those choosing to retire earlier or the increasing number of mid-career individuals who are choosing to change jobs, something that was never traditionally done in Japan. In the service industry, in particular, companies are now having to lower the level of their services to secure the required manpower, and as a result, we are seeing the impact in different ways.

In the logistics sector, for example, in the past, with the shortage, drivers were required to work over 12 hours to sustain businesses. However, the Japanese government has now strengthened labor laws and restricted the number of hours drivers are allowed to work. Companies, therefore, cannot rely on their existing workforce and need to find new solutions. Companies like ourselves have been actively engaging with workers who were restricted with the number of hours they work, for example, housewives or retired employees. We fully utilize these individuals within our industry.

Having said all this, in the post-COVID world we live in, there are many challenges. One such challenge is the increased number of inbound tourists, pushing demand for human resources in segments such as hotels and convenience stores. These business segments can accommodate part-time workers like us, making these segments our direct competitors. In order to combat the situation, we have been diversifying ourselves by providing more unique business opportunities for our labor force.

There is a theory called  Herzberg's Motivation-Hygiene Theory, which states that people will flock to jobs with better pay and better working environments, so in order for our company to secure more manpower, it is important that we provide motivation and additional value to workers. Something we take seriously is communicating the social impact and influence that our job offers candidates. We provide more holistic motivation for people to choose our jobs. We have also simplified the hiring process as a whole, expediting the transition from candidate to employee.

It was in the early 2000s that a lot of BPO companies made active moves to go more offshore for call centers and contact centers, and this was through the acquisition of local people living in countries like China and Malaysia who can speak Japanese. Since the salaries in these areas are lower, we were able to maintain operation costs. However, with the recent JPY depreciation, Japan has become cheaper to operate in, and we have decided to decrease overseas operations. This isn’t to say that we don’t see growth overseas, and the truth is it is quite the opposite: foreign workers will be required with the decline of the Japanese population. With the advent of AI, real-time translation will be possible, offering offshore staff the chance to take positions that usually require a Japanese speaker.

The reality of the demographic shift is that it isn’t just a Japanese problem, and many countries are now following the trend, with examples such as South Korea, China, and Italy all suffering from low birth rates and aging populations. This has led many experts to argue that it is an opportunity for Japan to develop solutions to these problems ahead of time. Do you agree? When you look at your own portfolio of services and products, which do you think has the potential to be replicated on a global scale?

It is true that Japan is a super-aging country and is at the forefront of creating new solutions for the elderly generation. This includes health care, nursing care, rehabilitation, and hobby creation. Over the past 20 years, many companies have exported these services overseas.

As a company, we are active in R&D for services for the elderly, particularly in regard to hearing difficulties. Companies like Phillips and Sennheiser are well known in Japan, but aside from these major firms, there are other companies involved in research projects aimed at hearing services and devices. We ourselves are involved in a collaborative project with local governments, the public sector, and local academia, discovering how aging leads to difficulty hearing. The project has a particular focus on identifying the specific sounds that the elderly have difficulty understanding. There are certain phonetic sounds that are difficult to hear in Japanese in old age, including sa, pa, and ka. At our call centers that deal with large numbers of elderly, we have a list of about 500 words that are to be replaced in order for the customers to understand the phone calls better. This service, along with our training for the elderly, can be applied overseas as a BPO service.

Looking to the future, how do you foresee the integration of AI and systems such as ChatGPT affecting your business? What kind of solutions are you currently working on that utilize AI systems?

We differentiate between front-end and back-end office work. The front end covers direct communication and human-to-human interactions. The back end, on the other hand, is more administrative and supportive, and it includes data gathering and analysis. AI right now will be applied to back-end processes rather than front-end. We are particularly interested in AI’s ability to generate data analysis and frequently asked questions (FAQ). In terms of direct contact with customers, AI utilization is limited to chat functions but is also used as a voice bot. This is because humans tend to be illogical when they are speaking, and the illogical nature of human speech confuses AI systems, leading to incorrect data and AI hallucinations. We are paying attention to the evolution of Autonomous AI that may lead to more integrated communication enhancement.

TMJ’s headquarters

TMJ’s headquarters

We saw that when you spun off from your previous company, one of the key reasons for your initial success was your ability to cater to foreign companies entering the Japanese market. This is very challenging due to Japan’s own language, culture, and consumers. Can you tell us more about how you catered to these foreign businesses? How important will it be to continue this aspect of your business model?

The strength of TMJ is the maintenance and improvement of our membership service, which can only be achieved when this lifetime value is shared together by and with the customers and ourselves. We represent the customers by having direct touchpoints with their customers. It is our duty to fully convey the necessary information to their customers and relay the feedback from their customers. This will all together elevate value. We’ve been following this approach even before the spin-off.

As for working with foreign companies, we provide a holistic methodology based on accumulated know-how. We provide the best means of communication before and after the service to these companies. The know-how, accumulated experience, and methodology give us strength.

One of the big strong points of your company is the ability to create touchpoints with your client's customers. While this is a big strength, it must also be a big challenge, especially when we talk about retail businesses that sell directly to consumers. Often, these businesses want to maximize the number of touchpoints that they have with their clients in order to better understand who buys their products, why they buy their products, and where they buy their products. TMJ, through Tim, has moved into an end-to-end comprehensive BPO partner that doesn’t just outsource simple call centers but handles a whole range of other services. How do you maximize or optimize the flow of communication between the information you gather and the information that your clients need in order to make decisions on future marketing, product developments, and other key decisions in their companies?   

Our company looks to strengthen and increase the touchpoints of our clients, and some companies feel satisfied just by having a website and a chatbot. The truth, however, is that leveraging these touchpoints and letting their customers know how to access these touchpoints is important. From our feedback, we’ve seen that 70% of users stop using the chatbot midway through since they feel it is not responsible enough. People who are dissatisfied turn to phones or email for inquiries. On the spot, we can analyze the chatbot’s responses and accuracy and then apply improvements. Simplifying and allowing customers better access to information is vital.

We have regular contact with the marketing staff at our client companies, so we can constantly provide feedback and offer new services or products. With the advancements in technology, we can extract certain words or phrases used by customers. From that, we can find the tendency toward demand. This includes social media crawling practices as well.

Honestly speaking, a lot of customers are actually silent, so understanding their needs is a little more tricky but equally important. With the help of AI systems, we can gather data on these silent customers more easily.

The company that used to be our parent company, Education Publishing Company, provides digital content services with a tablet. Through communication with clients and data analysis, we realized that the reason why customers exit out of membership is because setting up the table is quite arduous. We proposed that clients add an additional step once the tablet reaches customers, which would send a message asking if the customer needs support setting up the tablet. Since this is done during the operating hours of our call center, it isn’t an additional cost to our clients. By following this approach, we were able to reduce the number of membership exits successfully.

Part of your 2030 plan is to develop new services as well as value towards society. Could you tell us a little more about some of the key areas of value creation that you will be focusing on as part of this plan?

There are four pillars to our “2030 Vision” plan. The first is digitalization, with the idea of ensuring that nobody is left behind by this digital world we now live in. Our business scope includes a lot of customer care, but it is important that we integrate that with IT outsourcing, providing opportunities for everyone and anyone to access our digital tools and receive training. The second pillar is strengthening and diversification, providing job opportunities to all elderly people who want to work. Additionally, we are paying attention to those with disabilities. In society, often, those with disabilities are considered people who lack something, but what I believe is that society is forcing those people to be categorized as disabled rather than consider them their own individualistic identity. Our role is to augment their identity through education and training provisions. This will allow them to exert their abilities in the most appropriate way fully. In Japan, there are actually regulations on disabled employment percentages, for example, a lot of companies just make a subsidiary of agricultural firms and employ disabled people to satisfy the percentage required by government regulations. This is not the reason to employ disabled people, and it is my belief that the mindset of society needs to change. Inclusion can create a society that is comfortable for all and where all can contribute.

Your company clearly has a global mindset when it comes to the services you provide. Looking towards the future, are you planning on expanding your overseas presence further? If so, which markets or countries have the most potential for your firm?

Currently, in the Philippines, we provide a Japanese call center and also a digital service for the creation of websites. We have a cybersecurity monitoring service that analyzes the vulnerability of the websites.

Another aspect we want to strengthen is the digital cloud-based services. X as a service will certainly be mainstream in the near future, so it is important that we have our own engineers and response teams so that we can immediately respond to upcoming demands. Within the ever-changing society we live in, information gathering is key, with system and program development being done in English. Having a base in the English-speaking country of the Philippines allows us to gather more quick and firsthand information.

Our Philippines call center is becoming very multifaceted. Japanese companies that want to go overseas, want to have contact centers that cater to global audiences in English. Japanese companies looking to go abroad see us as a touchpoint with the global market, overcoming language barriers. We are also seeing demand from the domestic market in the Philippines, where local companies want the Japanese high standard of customer service, so growth in the Philippines is estimated with the growth of their population.

Imagine that we come back in 2032 and have this interview all over again. What goals or dreams do you hope to achieve by the time we come back for that new interview?

TMJ is a small company, and it is not well known in society. I want to lead the company to become one that socially contributes, where employees, their families, and all the stakeholders consider TMJ as a great company. There are many definitions of what makes a good company, but our core mission revolves around the creation of a social system structure with safety, security, comfort and convenience. This allows each person to enjoy their life fully.

For more information, please visit their website at: https://tmj-bpo.com/