Tackling Childcare: The Business Case for Employer-Supported Childcare CASE STUDY The Bank of Tokyo-Mitsubishi UFJ, Ltd. Financial Services, Japan ABOUT IFC IFC, a member of the World Bank Group, is the largest global development institution focused on the private sector in emerging markets. Working with more than 2,000 businesses worldwide, we use our capital, expertise, and influence to create markets and opportunities in the toughest areas of the world. In FY17, we delivered a record $19.3 billion in long-term financing for developing countries, leveraging the power of the private sector to help end poverty and boost shared prosperity. For more information, visit www.ifc.org COPYRIGHT AND DISCLAIMER NOTICE © International Finance Corporation 2017. All rights reserved. 2121 Pennsylvania Avenue, N.W. Washington, D.C. 20433 Internet: www.ifc.org The material in this work is copyrighted. 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International Finance Corporation is an international organization established by Articles of Agreement among its member countries, and a member of the World Bank Group. All names, logos and trademarks are the property of IFC and you may not use any of such materials for any purpose without the express written consent of IFC. Additionally, “International Finance Corporation” and “IFC” are registered trademarks of IFC and are protected under international law. September 2017 Policy Overview Japan Leave policies Paid maternity leave Yes 98 days Paid paternity leave No Parental leave is available to men Economy name: Paid parental leave Yes 309 Japan Main business city: Legal obligation for employers Tokyo* to support childcare 0-2 years 3-5 years Region: Obligation for employers to support childcare? Yes Yes OECD high income Based on the number of female employees? No No Based on the number of employees regardless of gender? No No Income level: Special legislation on employer-provided High income childcare? No No Population: 127,131,800 Government incentives to Female population: employers to support childcare 65,306,963 Tax benefits to employers to support childcare? No No Non-tax benefits to employers to support Yes (subsidy Yes, (subsidy childcare? (monetary and/or nonmonetary benefits) to cover to cover Labor force nursery nursery participation (15+): building and building and 49% female operations operations 70% male expenses) expenses) Compulsory primary education Quality of private childcare services enrollment age: License or registration required? Yes Yes 6 years Zoning requirements? No No Pupil-teacher ratio required? Yes Yes Penalties for non-compliance with laws? Yes Yes *The Women, Business and the Law data are based on domestic laws and regulations that apply to the main business city of the economy. For more information on the methodology including the maternity/paternity/parental leave calculation methodology, visit wbl.worldbank.org 3 The Bank of Tokyo- Mitsubishi UFJ, Ltd. The Bank of Tokyo–Mitsubishi UFJ, Ltd.’s Employee Profile in 2016: Financial Services, JAPAN • 49.5% of The Bank of Tokyo- Mitsubishi UFJ, Ltd. (the Bank)’s 31,800 permanent employees in Japan and 90% of its 11,425 contract workers are women; 60% when PARENTS, WORK, AND CHILDCARE IN JAPAN including its temporary staff • 17% of the Bank’s permanent female The large majority of Japanese women under the age of 65 are in the workforce, and male employees have children and most married women work, a stark reversal from 35 years ago (Gender younger than age five Equality Bureau Cabinet Office, 2016). Yet, mothers are less likely to be employed in Japan than in many other high-income economies (OECD, 2016) and more The Bank supports employees with than 60 percent of working women leave the workforce when they become children through: mothers, often for several years (Gender Equality Bureau Cabinet Office, 2016). • One year of job-protected unpaid This loss of experienced women from the workforce is costly to Japanese parental leave before the child’s second birthday (in addition to employers, and the Japanese economy more generally. By their late 40s, government-provided year of leave many of these women have returned to work, but are concentrated in low- paid at two-thirds salary) wage, part-time, or temporary positions (Statistics Japan, 2016). Many large • Support programs for women companies continue to follow a dual-track career system, where opportunities during pregnancy, maternity leave, for advancement to management are limited to those who have continuity of and reentry employment and are able to relocate across the country. Employees are typically • Childcare subsidies hired straight out of university and those who interrupt employment, and/or are • Consulting service for finding unable to relocate, are typically limited to less senior and/or more administrative childcare or babysitters positions. The options for mid-career recruitment and reentry are limited. • Childcare leave of up to 10 days Japan, moreover, has a large gender wage gap, reducing incentives for educated • Part-time work option until child women to return to employment (Kato and Kodama, 2015). reaches age nine; overtime time exemption, flexible working hours Being a working parent is difficult in Japan (OECD, 2016). There are long waiting lists for daycare, and privately run centers are expensive (Osaki, 2016). Long Main business impacts of providing commute times can act as an additional barrier to combining employment childcare supports: with family care (Abe, 2011). The gender division of unpaid family care work is • Dramatic improvements in retention particularly unequal in Japan (Addati et al., 2016). A culture of long working hours of new mothers further impedes work-family balance, and reduces fathers’ scope for sharing • Enhanced customer satisfaction family work (OECD, 2015). Although parental leave policies apply to both parents, • Several awards and positive publicity only 2 percent of fathers took such leave in 2014 (Gender Equality Bureau • Important building block for the Cabinet Office, 2016). Bank’s gender diversity strategy The difficulties of combining employment with parenthood are one factor in the dramatic fall in birth rates in Japan (Kato and Kodama, 2015). Japan has one of the lowest birth rates in the world (Gender Equality Bureau Cabinet 4 Case Study: JAPAN The Bank of Tokyo-Mitsubishi UFJ, Ltd. This case study discusses how the Bank supports workers with family care obligations in its Japanese operations through “In any institution, the childcare subsidies and other supports for employed parents. diversity of the employees The Bank has realized dramatic improvements in the retention and management is the real of new mothers, and childcare supports are an important driver to make the institution component of its diversity strategy. 1 more powerful. If you have more diversified staff, you have COMPANY BACKGROUND diversified ideas, views, and The Bank of Tokyo-Mitsubishi UFJ, Ltd. (the Bank) is Japan’s premier bank and was established by a merger in 2006 working style. That will enlarge between The Bank of Tokyo-Mitsubishi, Ltd. and UFJ Bank the scope of the business and Limited. The Bank’s parent, Mitsubishi UFJ Financial Group, Inc. create more energies. Diversity is (MUFG) is one of the world’s leading financial groups, with critically important for any firm.” total assets of approximately 303.3 trillion Japanese yen or $2.7 trillion, as of March 31, 2017. Headquartered in Tokyo and with Nobuyuki Hirano, President and Group CEO approximately 350 years of history, MUFG’s global network of Mitsubishi UFJ Financial Group has more than 2,000 offices in more than 50 countries. The Group has more than 150,000 employees and about 300 entities, offering such services as commercial banking, retail financial services, trust banking, securities, credit cards, Office, 2016). Low birth rates are a major contributing factor consumer finance, asset management, and leasing. to the aging of Japanese society and to comparatively high levels of skill shortages experienced by Japanese companies THE BANK’S BUSINESS CONTEXT (Ganelli and Miake, 2015). In recognition of the economic FOR SUPPORTING CHILDCARE costs of low birth rates and women’s lower economic participation, the Japanese government has introduced policy Retaining and promoting female employees is a high priority measures to reduce barriers to being a working parent, for the Bank, and for Japan in general. In April 2016, the including a year of paid parental leave for both mothers and Japanese Act on Promotion of Women’s Participation and fathers, a right to work part-time until a child reaches age Advancement in the Workforce came into force with the goal three, and substantial investments to increase the availability of improving women’s rates of employment and participation, of childcare (Gender Equality Bureau Cabinet Office, 2016). and of supporting enhanced work-life balance for female and The Japanese government also announced targets to male employees. Under the Act, companies need to analyze increase women’s share of senior management positions to and monitor progress and develop action plans for improving 15 percent in the private sector by 2020. Private companies gender equality. As the largest bank in Japan, the Bank shares are expected to play an active role in promoting gender and actively supports the goals of the Japanese government of equality and women’s economic participation. Under the improving gender equality at work and proactively addressing 2003 Act on Advancement of Measures to Support Raising the childcare needs of its employees (Kambayashi and Kato, Next-Generation Children (extended in 2013), all companies 2017; Araki, 2006). As Nobuyuki Hirano, President and Group with more than 100 employees must develop and publish CEO of Mitsubishi UFJ Financial Group and Chairman of plans for achieving work-family balance for employees the Bank, explained, “In any institution the diversity of the raising children (Umeda, 2014). employees and management is the real driver to make the institution more powerful. If you have more diversified staff, 5 Case Study: JAPAN The Bank of Tokyo-Mitsubishi UFJ, Ltd. you have diversified ideas, views, and working style. That will In 2016, women at the Bank in Japan were enlarge the scope of the business and create more energies. Diversity is critically important for any firm.” The Bank is particularly aware of the need to grow the number 4.5% senior managers/heads of departments of women employees ready to take senior management positions. Currently, only 4.5 percent of senior management positions and 14 percent of all management positions are held 14% middle managers by women, although half of the workforce is female. As is still common for many large Japanese corporations, employees are typically recruited straight out of university, at age 23, and are 20% people in the management expected to stay and grow with the company (Kambayashi succession pool and Kato, 2017; Araki, 2006). The Bank hires employees into three different categories: Core Officers, expected to be fully mobile across different locations (50.9 percent of employees, 49.5% permanent employees 7.9 percent female); Limited Area Specific Core Officers, exempted from mobility and transfer requirement (18.6 percent employees, 93.5 percent female), and Associates (30.1 percent 77% employees without of workforce, 97.7 percent female). Traditionally, it has been supervisory responsibilities difficult for women to leave employment and return to a career position later. 90.1% temporary and contract employees The typical age for first birth for women in the Bank who become mothers is 30 or 31. Losing an employee because of motherhood at that stage means losing several years of training and experience. Moreover, given the Bank’s focus on growing talent from within, vacant positions are typically not filled through external recruitment. The costs of losing experienced female workers have grown as a result of PHOTO: COURTESY OF THE BANK OF TOKYO-MITSUBISHI UFJ, LTD. changes in retail banking, where most of the Bank’s female employees work. As technology and the customer base have changed, routine aspects of work have decreased, and demand for expertise has increased. Success in retail banking increasingly depends on providing customized advice to customers, developing long-term relationships, and having in-depth knowledge of a range of sophisticated options. Feedback from customers suggests that the loss of continuity of contacts and expertise when women employees leave after childbirth is detrimental to customers’ perceptions of quality. Recognizing these factors, in 2005 the Bank’s board instructed it to investigate how to increase women’s retention by setting up a Women’s Working Environment Promotion team for promoting the role of women in the workplace. ILLUSTRATION FROM TOMO-NOBI-MAMA, A BROCHURE FOR WOMEN WORKING AT THE BANK. 6 Case Study: JAPAN The Bank of Tokyo-Mitsubishi UFJ, Ltd. Approximately 17 percent of the Bank’s employees have HOW THE BANK SUPPORTS ITS children under age five, with no difference in this rate between EMPLOYEES WHO ARE PARENTS female and male employees. This shows the success of the The Bank’s focus on supporting working parents and reducing Bank’s policies, which are encouraging mothers to stay rather the loss of talent represented by the resignation of new than leave the Bank to take care of young children as was mothers began in 2005, when the Bank formed a Women’s the case before the policies were introduced. Yet, because in Working Environment Promotion team. The team consisted the past most women left employment when they became of eight female managers who began by conducting a survey mothers, male employees are more than twice as likely as of female employees at the Bank on the working environment female employees to have children under age 18. for women and steps for creating a more women-friendly working environment. Responses to the survey highlighted difficulties with finding childcare, the desire for leave beyond Figure 1. Overview of the Bank’s policies in support of employees with children 7 Case Study: JAPAN The Bank of Tokyo-Mitsubishi UFJ, Ltd. the one-year statutory maternity leave, and the lack of role Maternity leave models and clear communication to emphasize that working In 2016, more than 1,500 women in the Bank were on mothers were welcome and supported at the Bank. The maternity leave, according to the Bank, a higher number of working group presented its finding to the Board in 2006 women than in any other Japanese company. The take-up of and an Equal Partnership Office, subsequently renamed maternity leave has increased steeply since the Bank began its the Diversity and Inclusion Office, was formed in the HR focus on greater gender equality a decade earlier (see Figure division to take the strategy forward. Several Diversity and 2). In 2007, only 294 women took maternity leave. Inclusion (D&I) Working Teams were formed to contribute ideas and help with implementation. Initially, these were Under Japanese law, mothers are entitled to 14 weeks of women-only, but in 2012 they were expanded to include male maternity leave, starting six weeks before childbirth and paid at representatives because it became clear that change would two-thirds of their salary by a government insurance program. not happen if initiatives focused solely on female employees. Both women and men are entitled to partially paid job- The Bank now has diversity teams in three locations across protected parental leave until the child is 12 months old.2 When the country. Teams deal with issues of gender diversity as the Women’s Working Environment Promotion team well as other aspects of diversity around disability, aging, and conducted its survey in 2006 it became clear that many women sexual orientation. felt that returning and having their child in a childcare center after 12 months was too soon. In response, the Bank added the The Bank has seen two phases in the evolution of its work- option of an additional 12 months of unpaid, job-protected life balance policies, the first phase beginning in 2006, and leave. Many women were also not able to see how they would the second in 2014. During the first phase, activities focused combine work and motherhood given the long work hours (see primarily on mothers, through extended maternity leave, the next section). The D&I team’s work on encouraging women childcare supports, reduced and flexible working hours, and to take maternity leave has evolved over time. Initially, its focus the highlighting of female role models. During the second was on encouraging women to stay with the company and use phase, the emphasis shifted on gender equity and cultural the leave available to them. Although this remains important, change more generally, particularly on tackling the long work since 2014 there has been a more explicit focus on helping hours culture. The Bank’s benefits are available to both male women return to work earlier because an absence of two years, and female employees, yet shifting men’s behavior has been much more of a challenge. The Bank has designed resources specifically for fathers and, as with women, is pursuing an Figure 2. Women on Maternity Leave at The Bank of active communication strategy to identify role models of men Tokyo-Mitsubishi UFJ, Ltd. who are actively engaged in fatherhood. The Bank supports its employees with extended maternity 2,000 1,525 leave, childcare subsidies, childcare leave, assistance with 1,293 finding childcare, flexible starting times, reduced working 1,000 750 hours and overtime exemptions for new parents, and 294 initiatives to create healthier working hours (see Figure 1). 0 2007 2010 2013 2016 8 Case Study: JAPAN The Bank of Tokyo-Mitsubishi UFJ, Ltd. or four years for women who have two children, is a substantial gap in terms of their career development. An additional “One of the mothers I supervise incentive for coming back earlier is that it can be easier to find a childcare place before the child is two years old; demand for was able to relocate to a childcare increases strongly once children are two. During the branch 10 minutes’ walk from first phase, between 2006 to 2013, the average length of the childcare center when she parental leave taken was more than one year in addition to returned from maternity leave, maternity leave; since the second phase of the policy began in 2014, the average length of parental leave for those who and because of this she was able returned by March 2017 has been less than one year. to work until 7 p.m. and pick her kids up straight after work.” Supports for pregnant women and new mothers Yuuko Nishio, Chief Manager, Retail Branch Management Division The Bank has introduced policies to support new mothers before, during, and after maternity leave. Prior to beginning maternity leave, all women meet with their line managers, While on parental leave, all employees have access to the who encourage their return and help them address any “wiwiw” online support program. The wiwiw program is concerns about being a working mother. All new line designed to make it possible for new mothers to keep in touch managers are trained to conduct these discussions (with role with the workplace; provides access to online resources related play and suggestions for how to address different concerns to their return to work, such as information about childcare and questions) and can link women to resources and tips for facilities and tips for working parents; and helps them keep working parents. The new mother and her supervisor have their skills up to date or develop new ones, through English another dedicated meeting before she returns to smoothen language courses or new technologies classes, for example. the reentry. Just as important as providing resources for parents is wiwiw’s role in encouraging communication between line managers Parental Leave at the Bank and employees, and to provide resources for managers on how best to manage and support employees on parental leave. The wiwiw program will send a monthly reminder to In 2015–2016, 1,525 women were on maternity/ the line manager, such as “your employee’s child is now three parental leave months old [or 11 months old],” to emphasize the point that, even though she is on maternity leave, the employee is still a In 2015–2016, 555 men (26% of new fathers) took member of the supervisor’s team. It encourages supervisors parental leave to reach out to their employees on leave and to keep communication open. In 2015, over 90% of women who returned from Wiwiw is managed and administered by an outside company, maternity leave were still employed one year and the Bank does not produce any of the webpages or later content. Staff at the D&I Office came across a similar program run for a large cosmetic company and worked with the In 2016, 761 women returned from maternity program designers to develop a customized product relevant leave to the Bank employees. 9 Case Study: JAPAN The Bank of Tokyo-Mitsubishi UFJ, Ltd. Childcare supports The Bank provides generous financial subsidies toward “I took five days paternity leave at the costs of a place in a childcare center for its employees. year-end when we were less busy. Subsidies were introduced in 2007 and are available for I often talk about my family at employees’ children from birth to the third year of elementary school (for aftercare). For women wanting to return to work work, and everyone is supportive before the child reaches age one, which is rare in Japan and of me taking an active part in also at the Bank, subsidy levels are higher in recognition of raising my children. I always try the higher costs of infant care. Supply of infant care is limited; to do my work swiftly and use using a nanny to provide in-home care is expensive and uncommon. Parents of infants under age one need to cover my time effectively so that I can the first 100,000 Japanese yen ($900), and are reimbursed respond to that unexpected call for any remaining fees up to 200,000 Japanese yen ($1,800) from daycare if I have to.” for up to six months. The Bank pays half of the costs of center or afterschool care, up to a capped maximum of 20,000 Father of two and married to a spouse Japanese yen ($180). Subsidies are available to female and who is also employed (MUFG Diversity male employees and take-up is high; in 2016, more than 4,000 Report, 2016) female and 1,000 male employees received childcare subsidies. The benefits are open to all employees with children in the age range. work at the end of her two-year maternity leave she has had For many families, the biggest barrier to finding childcare is to find a daycare no fewer than three times, once because not cost but supply. Finding a space can take a lot of time she moved to Tokyo from another location, once because her and create frustration. One mother of a four-year-old and daycare facility simply closed, and once to move from the less- member of the D&I team explained that since she returned to than-ideal private nursery she chose on an emergency basis to a higher-quality center where she and her daughter were happy. To make it easier and less stressful to find childcare, in 2016 the Bank entered into a contract with an organization “When we started the second that will help its employees identify suitable childcare centers phase, training for line managers with vacancies. Employees can use this service free of cost. on how to support their female To supplement childcare resources, Bank employees can employees during pregnancy and also use a babysitting service at a subsidized rate. The Bank pays for the membership of the babysitting network, and the return to work was a compulsory employee pays the babysitter’s hourly rate. Since both services program. Now we only need such were only introduced recently, no information is yet available training for new managers. It has on their impact. become a standard part of our To support returning mothers, the Bank also introduced culture.” a relocation option for new mothers to move to a branch closer to their home or childcare place. Yuuko Nishio, Chief Nobue Kamba, General Manager, Manager, Retail Branch Management Division, explained how Diversity & Inclusion Office 10 Case Study: JAPAN The Bank of Tokyo-Mitsubishi UFJ, Ltd. this option helps working mothers: “One of the mothers I doctor visits and check-ups, or to attend important school supervise was able to relocate to a branch 10 minutes’ walk events. The childcare leave is a well-used benefit, particularly from the childcare center when she returned from maternity for parents of children under age five. In 2015, almost 1,400 leave, and because of this she was able to work until 7 p.m. women used the benefit, primarily women with children and pick her kids up straight after work.” under age five. Although women mainly use this benefit, in 2015 97 fathers, including 72 fathers of children under age five, The Bank does not offer workplace crèches at any of its used the benefit. Although employees can take up to 10 days facilities because working mothers in the Bank are primarily of leave, the average is well below that, for both women and employed in the retail branches, and while several mothers men (3.9 days used on average by mothers, and 2.8 days may work in each branch, typically there are not enough in by fathers). any one branch to warrant a dedicated crèche facility. Reduced working hours and flexible schedules Childcare leave The Bank’s internal 2006 survey and external research show Employees with children under age nine can take up to 10 days that long and rigid working hours are almost as important of paid leave per year (up to five days for employees with one a reason for new mothers to delay returning to work as child, and up to 10 for employees with more than one child) lack of childcare. To meet these concerns, the Bank offers to deal with childcare-related emergencies or appointments, an extensive set of options for making working hours more in addition to the annual paid time off all employees receive. manageable. These options are available irrespective of Such leave can be used when a child is sick, for children’s gender, and several are open to all employees, whether they have children or not. Under Japanese law, new parents, both mothers and fathers, “Sometimes it can be difficult to have the right to work a reduced schedule (with prorated pay) keep a balance between what of six hours per day until the child reaches age three (Nakazato I’m doing in the home and in and Nishimura, 2014). The Bank has extended this option until the youngest child reaches age nine. Parents can also choose the workplace. The flex option different schedules, with earlier or later starting times, to fit in scheme gives many choices to with their childcare arrangements. For example, many parents working mothers. Depending on work from 9:10 a.m. until 4:40 p.m. The reduced hours option their situation, they can pick up is popular and take-up has grown in line with the number of women taking maternity leave, from fewer than 100 workers whatever is appropriate to their in 2007 to more than 1,000 in 2016, two of whom are fathers. needs. I recently used flexible New parents are also exempted from working overtime. working option when my husband Workers can choose from a range of start and finish times to couldn’t send the kids off like find a pattern that works for them. he usually does, and instead of Having many employees working reduced hours is not coming in early, I just switched to necessarily easy. Daycare and school do not cover evening the later start time of 9:10 a.m.” hours when branches are still open, or when workers at the headquarters may need to be available for meetings Member of D&I team, mother with colleagues or clients in other time zones. Yet, having a manager work reduced hours can provide opportunities for 11 Case Study: JAPAN The Bank of Tokyo-Mitsubishi UFJ, Ltd. routine and nonroutine work, and differentiating between tasks that could be done by associates or by junior professional “One of the team leaders I employees as part of their career development, and tasks that supervise has three kids, and is required a more senior staff member. In the process, it was using the shorter working hours possible to eliminate some tasks, to cover the required work, option, she leaves at 4:40 p.m. and to substantially raise productivity per hour. She added, “To make the flexible working hours system work, it is important to The extra work that someone be aware of potential backlash from workers who do not have in her position would usually kids. I make clear that everyone should have some time off, do is covered by her younger that younger or childless workers should not feel obligated to colleagues. While this may look forgo their leave because they feel the work will not get done.” Although the Bank initially focused on encouraging women to difficult it has two benefits: the use the reduced working time option, as it has become more younger workers learn about the common for mothers to return to work, the focus has shifted to kind of work she does; and they encouraging mothers to return to work full time and not wait have her as a role model, showing until their children are three years old. that it is possible to be a manager Promoting more effective working time with as a woman and mother.” “My Style” cards Reiko Sugou, Deputy General Manager, Although mothers are encouraged to work more hours, Global Service Center and full time if they can, everyone is encouraged to work fewer hours overall to find a more reasonable, productive, and healthy middle ground. The goal of the D&I Office is to ensure that shorter working hours become more common more junior staff to step in and learn, in addition to sending for all workers. As long as only women with children use the the important message that it is possible to be a working flexible and reduced hours options, it is unlikely that they mother and a manager at the Bank. Reiko Sugou, Deputy will have an equal opportunity to progress. As a member General Manager, Global Service Center, explained, “One of of the D&I team explained, “Some managers think ‘Oh this the team leaders I supervise has three kids, and is using the woman is using shorter working hours so I won’t give her shorter working hours option to leave at 4:40 p.m. The extra many tasks,’ but that will discourage her and make her less work that someone in her position would usually do is covered willing to perform. Change is a joint responsibility: managers by her younger colleagues. While this may look difficult, it has should treat all workers the same, and should focus on their two benefits: the younger workers learn to do the work she ability irrespective of how many hours they work. And at the does; and they have her as a role model, showing that it is same time, employees shouldn’t simply take advantage of possible to be a manager as a woman and mother.” these options, and should focus on contributing to the Bank.” The reduced and flexible working hours system at the Bank Younger women may observe that those who use the flexible has led to a search for more effective working. Yuuko Nishio, options are not taken as seriously or are perceived as less Chief Manager, Retail Branch Management Division, described career motivated; this might discourage them from stepping how in response to an increased number of women with into leadership positions. reduced schedules and overtime exemptions in the branch she As a fun way to change the working time culture, the Bank managed, she and her staff conducted a systematic review of has developed a system of simple cards that workers can the type of work that was usually done, prioritizing between 12 Case Study: JAPAN The Bank of Tokyo-Mitsubishi UFJ, Ltd. display on their desks, indicating when they intend to leave the office that day (see Figure 3). For workers who need to “It still causes surprise when a leave early, the card eliminates surprises from colleagues who know they should approach them before they leave. For male worker with kids needs to workers who stay late, especially if they do so frequently, it is take leave because his kids are a message to their manager to discuss why such long hours sick. The reaction is ‘Oh, really?’ are necessary, and to work with the employee to find a way It is important to change the to distribute work in a more manageable way. Apart from communicating their working hours to colleagues, employees culture so that everyone who can use the cards to communicate about working hours has kids–regardless of whether and work organization with their managers. Under the Iku they are men or women–can be a management style,3 line managers are encouraged to sit down good parent and benefit from the with their employees and develop a five-point statement on how to improve job satisfaction and create a productive childcare policies.” work environment. The Iku system was started in 2016 and Male employee, father, and member resulted in over 500 Iku declarations from managers in just of a Diversity & Inclusion Team two months. Fathers at the Bank who has kids—regardless of whether they are men or Encouraging fathers to use the Bank’s parental policies is women—can be a good parent and benefit from the childcare an important part of the Bank’s diversity strategy. The D&I policies and the family-friendly culture.” Office is keenly aware that both male and female employees have children, In 2016, the Bank published “HUG- and that it will be difficult to create Figure 3. Two “My Style” kumu,” a booklet on ECD highlighting cards, one for an employee a workplace where employees with the positive role fathers play in their intending to stay late, and one children can succeed as much as others announcing that he will leave children’s development.4 The booklet if only female employees with children earlier illustrates that how much fathers do at use the childcare benefits. Although home impacts how much mothers can men at the Bank are as likely as women do at work. It includes a daily schedule to be parents of preschool children, (see Figure 4) with crunch times in PHOTOS: COURTESY OF THE BANK OF TOKYO-MITSUBISHI UFJ, LTD. and are the majority of those who terms of childcare tasks to encourage use childcare subsidies, it is much less fathers to share childcare-related tasks common for them to take parental and more equally divide their time leave. Altogether in 2015, 235 men between work and home. To strengthen used parental leave, compared with its message to men, the D&I Office 1,995 women. As a male member of disseminates internal communication the Tokyo D&I team explained, “It still materials with male employee role causes surprise when a male worker models who are active fathers and use with kids needs to take leave because the benefits. his kids are sick. The reaction is ‘Oh, really?’” He continued, “It is important to change the culture so that everyone 13 Case Study: JAPAN The Bank of Tokyo-Mitsubishi UFJ, Ltd. Cultural change and diversity which focuses on valuing and supporting workers of different genders, ages, and family arrangements, and also The Bank is dedicated to changing cultural attitudes toward draws attention to any unconscious bias that influences work and family within the Bank. Activities include encouraging how managers support and evaluate women employees, Kagaya Kids’ Day, or “bring your children to work” days; the irrespective of whether they have children. As General dissemination of stories of women and men who successfully Manager of the Human Resources Division, Hiroshi Takekawa combine parenthood with a career; mentoring opportunities; explained, “Our goal is to create an environment where and a training program for managers to better support women can succeed without thinking ‘This is because I am a employees with kids. woman,’ an environment where they no longer feel that their Diversity management at the Bank is integral to developing gender matters and they can continue to work just as their good managers, and all managers receive diversity training, male colleagues.” BUSINESS IMPACT OF THE BANK’S Figure 4. Daily schedule provided in the “HUG-kumu” booklet to encourage fathers to SUPPORTS FOR WORKING PARENTS share childcare-related tasks The Bank’s policies for supporting working parents are informed by a clear business rationale. Childcare subsidies and other policies to support working mothers were initiated to address the negative impact on consumer service of the loss of experienced women workers. By providing these supports, the Bank has dramatically improved retention and positively impacted recruitment, and has addressed the factors that negatively affected customer development. These policies have some costs, but once the costs of training a new worker are accounted for, they are more than fully recouped. That said, CEO and President of Mitsubishi UFJ Financial Group Nobuyuki Hirano explained: “This is not a project where we “Our goal is to create an environment where women can succeed without thinking ‘This is because I am a woman,’ where they no longer feel that their gender matters and they can continue to work just as their male colleagues.” Hiroshi Takekawa, General Manager of the Human Resources Division 14 Case Study: JAPAN The Bank of Tokyo-Mitsubishi UFJ, Ltd. PHOTO: COURTESY OF THE BANK OF TOKYO-MITSUBISHI UFJ, LTD. view return on investment as a high priority; this presents a long-term investment for us to achieve the diversity that will help the Bank succeed in years to come.” Implementing the new policies involved some costs for the Bank. The costs of salaries during the statutory maternity and parental leave (of 12 months) are mainly covered by social insurance. The Bank pays for childcare subsidies, membership in the babysitting service, the wiwiw portal to support new mothers and their managers, and for the childcare leave paid time off. KAGAYA KIDS’ DAY IN 2016 WAS HOSTED BY THE BANK’S 125 OFFICES AND INCLUDED 1,400 EMPLOYEES AND CHILDREN. BUSINESS BENEFITS OF SUPPORTING new employees, or lost productivity or customers because EMPLOYEES WITH CHILDREN the employee has left. Using this estimate as a baseline, the growth in the number of women who have stayed at the Bank Retention instead of leaving when they became mothers by more than The clearest impact of the Bank’s childcare and maternity 1,000 translates into notional financial returns of 5,000 million support policies have been improvements in the retention of Japanese yen (or $45 million). women. By pursuing its targeted maternity leave and childcare support policies, the Bank has more than halved its turnover Recruitment rate for women, from 6 percent in 2007 to 2.4 percent in 2016. The Bank operates in a highly competitive labor market. Most Even though the rate for women is still higher than that for recruitment efforts focus on recent college graduates, and the men, this represents remarkable gains. Bank annually hires approximately 1,000 young graduates for its Compared to the costs of recruiting and training a new career and other professional positions. The Bank’s innovative employee, the direct expenditures related to childcare and childcare and maternity leave policies are an important factor parenting are modest. In their first year of employment, in attracting smart and ambitious young women and signaling professional workers at the Bank are mainly typically trained to them that the company is willing to invest in them, whether and are not yet expected to be productive. It takes two to they choose to have a family or not. A member of the D&I team three years of work experience to make a full contribution in who was recruited when the D&I Office began its work, and lower-level jobs. After eight or nine years, employees are ready now herself speaks on recruitment panels, recalls, “I attended to step up to their first level of leadership. When an employee one of the Bank’s recruitment panels when I was a student. leaves because she becomes a mother (typically after about Hearing about the different options available to employees eight or nine years on the job), her replacement has to be made with children made me feel confident that I would be able to internally, through a more junior employee, because the labor continue to work once I got married and had children. When market for experienced professional workers is limited in Japan I recently represented the Bank on a recruitment panel, I got and rarely used by the Bank. Sugou estimates that it takes at many questions from female students such as ‘Are you really least 12 to 18 months for a worker to become fully productive able to get that maternity leave?’ and, ‘Is it possible to come in his or her department. She conservatively estimates the back to the Bank after the leave?” It is important that I was able wage-related replacement costs for one employee at about to say ‘Yes’. “ 5 million Japanese yen ($45,000); these costs do not take into account the time taken by colleagues and managers to train 15 Case Study: JAPAN The Bank of Tokyo-Mitsubishi UFJ, Ltd. Productivity of new mothers and improving gender equality has led to a substantial improvement in women’s share of leadership The success of the childcare and maternity leave policy and positions. In 2006, when diversity efforts began, women were the promotion of reduced and flexible working schedules is only 5 percent of middle and senior managers; by 2010, their encouraging a more effective organization of work, helping share had doubled to 10 percent, and by August 2016, it had staff organize their work to achieve as much if not more in increased even further, to 19 percent (MUFG, 2016). Addressing less time. the loss of female talent because of childbirth has provided the impetus to focus more broadly on gender equality, open Customer service communication, and effective management in the Bank. The Bank’s focus on diversity and the retention of mothers began in response to concerns by the Bank’s Board about the negative Corporate reputation impact of the loss of female staff on the quality of service and The Bank has received several awards for its focus on gender market development in its retail branches. The maternity and equality and support for working mothers, including recognition childcare policies have helped the Bank address this problem. by the Japanese Ministry of Economy, Trade and Industry and Encouraging and enabling women to return to work after the Tokyo Stock Exchange as an exceptional enterprise in maternity leave helps maintain experience and customer encouraging women’s success in the workplace. Such positive relations in the branches. publicity makes the Bank more attractive to potential recruits and supports its image with customers and clients. Diversity Diversity is critically important to the Bank’s business strategy and long-term vision. CEO and President of Mitsubishi UFJ LESSONS LEARNED Financial Group Nobuyuki Hirano emphasized, “When it comes The Bank’s policies for supporting parents at work have to nurturing human resources, diversity will be key to securing evolved over time. During the first phase, from 2006 onward, competence.”5 The Bank’s focus on reducing the attrition the Bank focused primarily on encouraging more women to take maternity leave and continue in employment. Policies were designed in response to feedback from female employees. Providing supports such as childcare subsidies, “When I recently represented the extended maternity leave, reduced hours option, and childcare Bank on a recruitment panel, I leave, was as important as changing the perception of women got many questions from female and managers through communication and management training that it was possible for working mothers to be students such as, ‘Are you really successful employees. The dramatic increase in the number of able to get that maternity leave?’ women taking and returning from maternity leave showed the and, ‘Is it possible to come back success of the Bank’s efforts. to the Bank after the leave?’ It Yet the policy’s success has created its own problems. The is important that I was able to dramatic increase in the number of women taking maternity answer ‘Yes.’” leave and working reduced hours created the potential of human resource shortages in departments with a high number Female member of D&I team of women, and of creating a backlash against mothers, with other employees feeling that they had to make up for the 16 Case Study: JAPAN The Bank of Tokyo-Mitsubishi UFJ, Ltd. work left undone due to their absences. Part of the response doing hobbies; everyone is balancing with something besides has been a much more concerted effort to encourage men to work. So everyone, if the productivity got improved, can use use parental leave and other childcare options. At the same those extra hours to do something else besides work.” time, there also has been a focus on organizing working hours Although the formal leave and reduced hours entitlements more productively and tackling the long hours culture for all remain unchanged, the Bank at the same time is encouraging workers, not just parents. As Nishio explained, “Some people and supporting women to return to work, or change from see it as a burden to have working mothers as coworkers. I part-time to full-time work earlier than the formal policy want to change that mindset and see it as a benefit that can entitlement. Long periods of leave and reduced working hours raise the productivity of everyone. If someone can finish up the may limit women’s advancement opportunities, and might work that used to take until 5 p.m. by 4 p.m., that extra time make it less likely that the Bank will achieve its goal of gender means they can do something besides work. Everyone is doing equality in management. something besides work: raising kids, taking care of parents, or The Bank has made dramatic progress in making parenthood more acceptable at work and reducing the loss of female talent, yet the lack of childcare remains a substantial barrier. The Bank’s “Some people see it as a burden financial subsidies help make childcare more affordable but they to have working mothers as do not significantly expand the availability of childcare. Although coworkers. I want to change that the Bank is working to address these challenges, these factors are unlikely to change quickly. mindset and see it as a benefit that can raise the productivity CONCLUSION of everyone. If someone can In just a decade, the Bank’s investment in supports for working finish up the work that used parents have made a dramatic difference by raising the number to take until 5 p.m. by 4 p.m., of working mothers in the Bank and creating a more inclusive that extra time means they can culture for its employees. The Bank’s Diversity & Inclusion policy do something besides work. has been successful in improving the retention of women and increasing women’s share in management. A number of Everyone is doing something challenges remain, including the limited supply of childcare, besides work: raising kids, men’s low uptake of parental leave, and the culture of long taking care of parents, or doing working hours. The Bank’s responsive D&I approach is evolving hobbies; everyone is balancing to tackle each of these challenges. with something besides work. So everyone, if the productivity got improved, can use those extra hours to do something else besides work.” Yuuko Nishio, Chief Manager, Retail Branch Management Division 17 Case Study: JAPAN The Bank of Tokyo-Mitsubishi UFJ, Ltd. Endnotes 1 Interviews for this case study were conducted in person in Tokyo 2 The parental leave is paid at two-thirds of earnings for the first in January 2017 with a cross-section of the Bank management 180 days taken by each parent, and at half pay thereafter, financed and staff, including the President and Group CEO of MUFG and by the Employment Insurance System (Nakazato and Nishimura, the Bank, the Director for Planning, the Director for Human 2014). Resources, HR staff responsible for diversity management, and 3 Iku is the Japanese word for raise or foster. three departmental managers from different parts of the Bank. A discussion was also held with members of the Diversity and 4 HUG-kumu is an Anglicized version of the Japanese word Inclusion (D&I) Team (Tokyo). hagukumu, which means to nurture a child. 5 Message from the CEO; Appendix to MUFG Diversity Report 2016 (MUFG, 2016). References Abe, Yukiko. 2011. “Family Labor Supply, Commuting Time, and Nakazato, Hideki, and Junko Nishimura. 2014. “Japan.” 10th International Residential Decisions: The Case of the Tokyo Metropolitan Area.” Review of Leave Policies and Related Research 2014, ed. Alison Koslowski, Journal of Housing Economics 20 (1): 49–63. Sonja Blum, and Peter Moss. United Kingdom: International Network on Leave Policies and Research. http://www.leavenetwork.org/ Addati, Laura, Florence Bonnet, Ekkehard Ernst, Rossana Merola, and fileadmin/Leavenetwork/Annual_reviews/2014_annual_review_korr. Jessica Wan. 2016. Women at Work: Trends 2016. Geneva, Switzerland: pdf (accessed April 17, 2017). 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Tokyo: Diversity & Inclusion Office, Human Resources Division. 18 Contact Information IFC 2121 Pennsylvania Avenue, NW Washington, DC 20433 USA +1 (202) 458-2262 BMurti@ifc.org www.IFC.org/gender @WBG_Gender ifc.org September 2017