“Salary gaps are no object” is the new common sense! The internal competition and radical shift to meritocracy brought about by hiring super-high-spec new graduates

Tama-chan and GG Yumeta's witty talk!! [Economy]

The day a starting salary exceeds Grandpa's salary? Japan's era of massive salary disparities

GG Yumeta:Oh my, Tama-chan, your eyes are wide open at today's news, aren't they?

Tama-chan:Yeah! This article titled 'From super-high-spec new graduates to seniors: Internal disparities create competition; salary gaps are no object'—what does it mean?Is it really true that a new graduate can have a higher salary than a veteran who has worked for many years?

GG Yumeta:Hahaha! As expected of you, Tama-chan, you've spotted something important. Yes, it's about the 'tectonic shift in salaries' currently happening in Japanese companies. The great mountain of traditional 'seniority-based promotion' is starting to crumble.

Tama-chan:A tectonic shift! That's scary. So, how much does a 'super-high-spec new graduate' actually get? How many times my allowance is it?

GG Yumeta:It's on a different scale than your allowance. For example, there are cases where foreign-affiliated companies and major IT firms are offering an annual salary of 10 million yen to new graduates with skills in AI (artificial intelligence) or cutting-edge technology.

Tama-chan:Whoa! An annual salary of 10 million yen is amazing. Isn't that higher than my dad's annual salary?

GG Yumeta:Heh heh. That is exactly the core of this story. Many mid-career and senior employees are facing the phenomenon of 'salary reversal.' In a normal company, the annual salary of a new graduate (for example, 3 million yen) used to be one-third to half of an employee with 10 years of service.

Tama-chan:I see, I see.

GG Yumeta:However, now, some top-tier trading companies have raised their starting salaries for new graduates to 330,000 yen per month (an annual salary of over 5 million yen). In other words, we have entered an era where a new graduate suddenly receives almost the same salary as a mid-career employee with several years of service. This is the company's resolve that the article refers to as 'salary gaps are no object'.

Tama-chan:Then, don't seniors like you get angry? Like, 'I've worked hard for so many years!'

GG Yumeta:Of course, there is confusion and dissatisfaction. That is precisely why companies are sending a clear message that they only pay for 'ability and results.' In the past, there was value in 'staying for a long time,' but from now on, 'what you can do' is everything. Companies are doing this to not let talented new graduates slip away, and also to urge existing employees to compete by saying, 'If you're not careful, you'll be beaten by a new graduate!'

Tama-chan:I see! So, if I become a genius who develops super AI in the future, my starting salary might be higher than your pension, Grandpa!

GG Yumeta:Hahaha! That would be perfectly fine! By all means, try competing with Grandpa's pension. When that happens, I'll secretly buy some stock in the company that invested in your talent, Tama-chan!

Tama-chan:Hehe. Grandpa, that's sneaky!

[Details] Examples of compensation for 'super-high-spec new graduates' (maximum salary disparity)

The corporate stance of 'we don't mind salary gaps' is most clearly reflected in compensation for new graduates with high levels of expertise.

Company/Industry Compensation Level Benchmark Examples of Required Talent Implications of Disparity Foreign Financial/IT Firms Annual Salary of 10 Million Yen or more Investment banking divisions, AI engineers and data scientists with advanced specialized knowledge, etc. Offering annual salaries at the new graduate stage that rival or exceed those of section manager-level employees in their late 30s to 40s at traditional Japanese companies. Japanese IT/Tech Firms Annual Salary of 8 Million to 10 Million Yen New graduates capable of producing top-level results in specific technical fields (e.g., DeNA, specific specialized roles at NEC, etc.) Completely separating new graduate hiring from the framework of seniority-based promotion and adopting Western-style job-based, meritocratic systems.

Because public data regarding specific salary gap cases and ratios is internal company information, it is almost never published as an accurate **salary ratio (multiplier)** between specific 'ultra-high-spec new hires' and 'senior employees'.

However, from the cases of **'significant increases in starting salaries'** progressing at many Japanese companies, we can decipher the reality that internal disparities are widening.

1. Compensation cases for 'ultra-high-spec new hires' (maximum value of salary gaps)

The corporate stance of 'we don't mind salary gaps' is most clearly reflected in compensation for new graduates with high levels of expertise.

Company/Industry Compensation Level Benchmark Examples of Required Talent Implications of Disparity Foreign Financial/IT Firms Annual Salary of 10 Million Yen or more Investment banking divisions, AI engineers and data scientists with advanced specialized knowledge, etc. Offering annual salaries at the new graduate stage that rival or exceed those of section manager-level employees in their late 30s to 40s at traditional Japanese companies. Japanese IT/Tech Firms Annual Salary of 8 Million to 10 Million Yen New graduates capable of producing top-level results in specific technical fields (e.g., DeNA, specific specialized roles at NEC, etc.) Completely separating new graduate hiring from the framework of seniority-based promotion and adopting Western-style job-based, meritocratic systems.

Ratio of disparity (estimate)

If, in a traditional seniority-based company, the 'average starting salary for a new graduate was 3 million yen per year,' the compensation for an ultra-high-spec new hire offered 10 million yen per year is approximately 3.3 times that of an average new graduate at the entry stage. This disparity becomes the foundation for the 'reversal phenomenon' that occurs between them and senior employees.

2. Raising starting salaries for the general workforce and the risk of 'salary reversal'

What is accelerating internal disparity is not only the high offers to a portion of the ultra-high-spec layer, but also the significant raising of starting salaries for the general new graduate layer. This movement is creating a 'reversal phenomenon' with the salary levels of existing mid-career and senior employees.

Starting salaries after corporate/industry revisions (guidelines for university graduates in general positions), annual salary conversion estimates, and the issue of suggested disparitiesMajor General Trading Companies (Mitsubishi Corporation, Itochu Corporation, Marubeni, etc.)325,000 to 330,000 yen/monthAnnual salaryapprox. 5 million yen or more (including bonuses). A "reversal phenomenon" where new graduates' monthly salaries exceed those of mid-career employees with several to 10 years of service is likely to occur.Construction/Real Estate (Daiwa House, Open House, etc.)300,000 to 360,000 yen/monthAnnual salaryapprox. 5 million yen or more. To maintain salary balance with existing employees, there is a need to raise the base salaries of existing mid-career employees and chief-level staff in tandem, not just new graduates. IT/Consulting (CyberAgent, Nihon M&A Center, etc.)400,000 to 420,000 yen/monthAnnual salaryover 5 million yen (annual salary system). Starting salaries are reaching levels comparable to the annual income of non-managerial staff with 10 or more years of service at typical major companies.