Average Age 36, Average Annual Salary 200 Million KRW... 'Monster Company' with Length of Service as Its Only Flaw [Curiosity Lab]

Japan's Keyence, Factory Automation Specialist
Average Salary: 100M KRW at 3 Years, 200M KRW at 6 Years, 300M KRW at 9 Years
Sales Staff Sometimes Work 12-Hour Days but Rest on Weekends

Company promotional photo of Keyence [Photo by Keyence website]

Recently, the Japanese media outlet ‘President Online’ conducted an average annual salary ranking survey targeting 3,892 listed companies. Among them, 658 companies headquartered in the Kansai region were surveyed, and the ‘Kansai Edition Top 200 Companies’ was announced. The company that took first place is KEYENCE, with an average annual salary of 22.79 million yen (approximately 200 million KRW). This is only about 40 million KRW less than M&A Capital Partners (26.88 million yen, approximately 240 million KRW), which has the highest average salary across Japan.

The media described KEYENCE as "renowned for its planning and development capabilities and sales power that anticipate customer demands, achieving astonishing profit margins," adding that "a net profit margin of 80% and an operating profit margin of 50% are standard." It continued, "Naturally, the salary system is performance-linked, so if net profit increases, salaries also rise," but noted, "the average length of service is only 12.1 years."

◆ KEYENCE is a fabless automation specialist company

Headquartered in Osaka, KEYENCE is a factory automation specialist company with a 50-year history since its establishment in 1974. Its product segments include automation (sensors, laser marking machines, safety devices) and inspection (machine vision, measurement systems, microscopes, code readers). The company operates a fabless management model without its own factories. It only develops product designs and outsources manufacturing to partner factories and production facilities (other companies). The company states, "By having multiple manufacturing contractors, we not only have strong price negotiation power but also avoid costs related to land and labor, enabling us to procure products cheaply regardless of market conditions (cost ratio is about 20%), which is the secret to our high profit margins."

As of 2022, global sales reached 7 billion USD, and the company employs 10,580 people worldwide. According to KEYENCE’s disclosed 2022 performance, sales were 922.4 billion yen (approximately 8.3 trillion KRW), operating profit was 498.9 billion yen (approximately 4.5 trillion KRW), and the operating profit margin was 54.1%. In 2013, sales were 2 trillion yen and operating profit was 1 trillion yen, so over 10 years, sales increased sevenfold and operating profit increased 4.5 times. During this period, the average salary increased by 100 million KRW.

◆ The secret behind a 50% operating profit margin

The secret to the operating profit margin reaching 50% lies in the fabless management model and outstanding planning and development capabilities. Many products are industry-first or world-first. Although the R&D ratio is not high, salespeople directly listen to customer demands, which supports the planning and development capabilities. The sales force is also highly regarded. Unlike typical sales roles, KEYENCE salespeople have excellent product understanding and provide outstanding customer service, including after-sales support.

◆ How much do they actually earn?

According to the Japanese recruitment platform Talent Square, KEYENCE’s average annual salary (referred to as annual income in Japan) is 22.79 million yen (average age 35.8 years). This is top-class among Japanese companies and comparable to foreign consulting firms or investment banks. Starting salaries range from 6 to 7 million yen, similar to large Korean companies, but by the third year, salaries exceed 10 million yen. By the sixth year, they reach 20 million yen, by the ninth year 30 million yen, and senior managers or department heads with over 15 years of experience can earn more than 40 million yen depending on their skills. Average salaries by job type are 20-25 million yen for sales, 18-23 million yen for development and clerical work, and 13-16 million yen for administrative roles, with 10-20 million yen as the baseline.

Yukiens Nakata, CEO and President

◆ A black company squeezing employees dry?

Regarding KEYENCE’s average age of 38, some Japanese job seekers speculate that "high-intensity labor leads to many resignations," suggesting it might be a "black company" (exploitative company). Online and some reports mention phrases like "people in their 20s earn over 10 million yen, buy houses in their 30s, and have graves built in their 40s," or "employees are monitored by GPS."

A post on a job seeker community states, "KEYENCE’s standard working hours are from 8 a.m. to 8 p.m., totaling 12 hours. While it is not exactly a white (normal) company, there is almost no late-night overtime or weekend work, and compared to foreign consulting firms or investment banks with similar annual incomes, the working hours are relatively short." Another post says, "Weekdays are busy, working from around 7 a.m. to 8 or 9 p.m., but weekend work is rare, so people enjoy hobbies flexibly on their days off."

In 2019, Toyo Keizai Online interviewed current and former KEYENCE employees and reported that KEYENCE is not a black company. Sales staff sometimes work 12-hour days but are guaranteed weekends off. A former employee said, "Many people have a fixed notion that it is a black company because they receive high salaries while talking to outsiders." Regarding the GPS monitoring allegations, KEYENCE stated, "While cars have GPS, it is absurd to say that GPS is attached to sales vehicles or used for labor management."

Keyence Main Products [Photo by Keyence Website]

◆ Is the average age of 36 and average tenure of 12 years due to high turnover?

One suspicion about the black company claim is the low average age and tenure. A company representative explained, "The number of new university graduate hires is increasing, so the number of young employees is rising," adding, "The company’s history is relatively short, and many employees are reaching retirement age." As of 2019, KEYENCE had 2,388 employees and hired about 250 new employees that year, approximately 10%. The turnover rate after three years is reported to be 2.4%.

A former employee’s post on a recruitment platform explains why there are many new hires. He said, "You learn direct sales from A to Z. The reason for hiring only new graduates is to shape them in KEYENCE’s unique style," adding, "Over time, no company is tougher than KEYENCE, and even if you work at 10% of KEYENCE’s intensity, you can be recognized and live as a top performer."

Company promotional photo of Keyence [Photo by Keyence website]

Regarding drawbacks, he said, "If you focus on work, follow manuals, and improve your skills, you lose your life," adding, "If you stay, you compromise with reality to some extent, become stagnant, and after 7-8 years, changing jobs becomes impossible. The best time to change jobs is between 3 and 5 years." He also said, "The biggest drawback is being trapped in the well called KEYENCE, unable to see the bigger picture."

Meanwhile, KEYENCE Korea, the Korean subsidiary of KEYENCE, recorded sales of 294.5 billion KRW and operating profit of 15.1 billion KRW in 2023. Both sales and operating profit increased by single digits compared to the previous year, with an operating profit margin of about 20%. According to Job Korea, the starting salary for university graduates is around 43 million KRW.