TOKYO -- Workday, a U.S. provider of cloud-based human resources software, is eyeing a stronger presence in Asia. The Nasdaq-listed company is doubling its regional staff this year from the current 200 or so out of 6,600 globally by opening new offices in Seoul and Bangkok, as well as strengthening its current offices in the region, according to David Hope, president of Workday Asia Pacific Japan.
Founded in 2005, the fast-growing rival of Oracle and SAP now has over 1,600 global customers, including Nissan Motor, which fully adopted the system this year. As competition for qualified workers rises in Asia, its retention-risk analysis uses big data to analyze factors including job title, compensation and time between promotions to predict and identify potential employees who may be open to changing jobs.
Hope, who was appointed to his current position in January, sat down with the Nikkei Asian Review to discuss the company's regional focus.
Q: Workday fully launched its system for the Japanese market in 2015. How is its current operational structure in Asia?
A: During the first six years [since founding], we were growing in the U.S. and then in Europe. For fiscal 2017, our total revenues were $1.57 billion, showing significant year-on-year growth [up 35%]. In Japan, we now have over 350 companies as customers, including Nissan Motor, Hitachi and Sony. We are now moving into an aggressive ramp-up within the whole of the Asia-Pacific region. We see exciting potential here.
As part of our growth strategy, we opened our new Asia-Pacific headquarters in Singapore. In May, we opened a new global support center in Auckland, New Zealand. We are adding new offices in South Korea and Thailand this year. In addition, we are strengthening our current offices in Tokyo, Hong Kong, Melbourne and Sydney. From a sales force perspective, we are almost doubling this year.
Q: How are the opportunities in the Japanese market?
A: Japanese companies are starting to see the importance of investing in human capital management. It's very hard to generalize about the market here because you have some of the most traditional companies in the world, as well as some of the most cutting-edge, growing companies.
But the traditional Japanese manufacturing industry is probably the most conservative segment, where human resources is seen as a part-time job for the planning department. These companies typically have the luxury of a very committed long-term workforce with lifetime employment, which is very different from companies outside Japan.
You are starting to have more millennials entering the workforce, as well as increased globalization and competition, and structural changes within the Japanese economy. On top of that, you have cloud computing becoming more pervasive. We see that our business opportunity in Japan is significant.
Q: What are the trends in the Japanese market in terms of human resource management?
A: Japan is probably seven to eight years behind what a company of equivalent size and scope is doing in the U.S. in terms of the overall function of the human resources department. Now the investment is coming back to the people, because if you don't have the right people in the right roles, it's very hard to grow and develop them.
One of the first customers we were able to acquire were global companies like Nissan Motor, Hitachi and Sony. Typically, the demand first came from their overseas employees, because the complexity of managing them was much more than the Japanese workforce. They started using our system offshore, and then as the solution rolled out, it came back to the headquarters, and now they have one single global system.
We are starting to see a new breed of human resource leaders becoming more empowered in Japan, who are driving change. They are starting to insist internally because they understand from a competitive standpoint that they need to transform even in some of those traditional companies.
Q: What are the trends in Asia that Workday can address?
A: Retaining talent is a common issue in the region as millennials can be a little bit more fickle in terms of commitment to a company. You have the more mature markets like Australia closely aligned with the U.S. You have Southeast Asian companies that have grown quickly. They are all facing similar challenges.
If you are a traditional Japanese manufacturer serving the domestic market alone, you might still have a few more years to leverage the traditional workforce. But globalization is happening everywhere. It's forcing change and transformation. In Japan, the younger workforce is starting to become more demanding, wanting more benefits and clearer steps for their future careers.
Interviewed by Nikkei staff writer Tsubasa Suruga