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Business

Aeon updating personnel policy to better serve local markets

TOKYO -- Japanese retail giant Aeon will make it easier for employees tied to a specific region to get promoted, aiming to nurture and retain valuable talent as labor grows increasingly scarce.

The new personnel system will be introduced next spring at core general-merchandise-store unit Aeon Retail.

Aeon Retail has about 20,000 full-time employees. Staffers who have agreed to work anywhere can build managerial experience at smaller stores outside major metropolitan areas, so they are more likely to rise to higher positions than their geographically limited counterparts. Of the 800 Aeon Retail managers who oversee large stores or shoulder equivalent levels of responsibility, just one is a local employee who does not face transfers.

The new system will cover staffers at the midcareer level and above. Compensation will be based on performance in a given role, regardless of past experience. A little over a quarter of all full-time staffers fall in this regional-staff category. The aim is to eventually bring the share of higher-level managers hailing from this group closer to that. They could even be promoted to corporate directors.

The effective annual pay cap for local employees will rise about 40% to 10 million yen ($98,000). Aeon will make this happen without raising overall labor costs. 

General-merchandise stores offering such diverse items as apparel, food and household goods face the challenge of meeting the varying needs of consumers in each locality. Re-examining cookie-cutter store planning led by corporate headquarters is crucial to serving local demographics with different income levels.

Aeon Retail revamped its organization last year to have six local companies draw up their own strategies. Rival supermarket operator Ito-Yokado -- a unit of Seven & i Holdings -- reorganized operations into 13 districts across Japan, assigning product development staff to each.

Aeon Retail is extending these "localization" efforts from product development to its own personnel system. A new career track will be created for store clerks and others. People with deep knowledge of merchandise and store layouts, for example, could skip over midlevel managerial posts to a higher level.

With the company rewarding results, more of the 100,000 or so hourly workers will rise to full-time status.

Retailers, which in general pay less than manufacturers, employ local staffers to maintain their nationwide store networks. The workers settle for lower pay in exchange for not having to worry about being relocated.

(Nikkei)

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