---
title: Manager and Specialist Tracks in Japan Need One Grade Scale
description: Japan's department heads earn 2.05 times untitled staff, so specialist tracks become holding pens. Why one grade scale, with management as an allowance, works.
image: https://nobusato.jp/hubfs/covers-2026-11/manager-and-specialist-ladders-cover-en-2026-10-m.png
---

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In this article

1. [Where do the pay steps sit in Japan?](https://nobusato.jp/en/blog/manager-and-specialist-ladders#s1)
2. [Why Japanese specialist tracks turn into holding pens](https://nobusato.jp/en/blog/manager-and-specialist-ladders#s2)
3. [Two ladders or one ruler?](https://nobusato.jp/en/blog/manager-and-specialist-ladders#s3)
4. [What does "equal at the top" have to cover?](https://nobusato.jp/en/blog/manager-and-specialist-ladders#s4)
5. [The test: can a manager go back?](https://nobusato.jp/en/blog/manager-and-specialist-ladders#s5)

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# Manager and Specialist Tracks in Japan Need One Grade Scale

Why specialist tracks become holding pens

[Nobu Sato](https://nobusato.jp/en/profile?hsLang=en)7 min read

Contents5

1. [Where do the pay steps sit in Japan?](https://nobusato.jp/en/blog/manager-and-specialist-ladders#s1)
2. [Why Japanese specialist tracks turn into holding pens](https://nobusato.jp/en/blog/manager-and-specialist-ladders#s2)
3. [Two ladders or one ruler?](https://nobusato.jp/en/blog/manager-and-specialist-ladders#s3)
4. [What does "equal at the top" have to cover?](https://nobusato.jp/en/blog/manager-and-specialist-ladders#s4)
5. [The test: can a manager go back?](https://nobusato.jp/en/blog/manager-and-specialist-ladders#s5)

Most dual career ladders in Japan fail for a simple reason: they are two ladders. The pay steps in Japanese companies sit on management titles, so a specialist ladder built beside them looks like the place people go when there was no manager seat left. The fix that works is one grade scale for everyone, with management paid as a responsibility on top.

## Where do the pay steps sit in Japan?

On titles. In the Ministry of Health, Labour and Welfare's 2025 Basic Survey on Wage Structure, regular employees on open-ended contracts earned these monthly scheduled wages in June, overtime excluded: department-head level ¥635,800, section-head level ¥529,200, sub-section-chief level ¥399,200, and people with no title ¥310,500. Department heads earn about 2.05 times what untitled staff earn.

Discount that a little. Untitled staff average 41.8 years old and department heads 53.1, so part of the gap is seniority, and the untitled group includes new hires.

The direction is still clear. In Japan, the people in the top two pay bands almost all hold a management title.

For a senior engineer, lawyer or data analyst who doesn't want to manage, that is the ceiling. They can take a section-head job they don't want, or leave. The company loses either way. One road gives you a reluctant manager. The other gives you one person fewer.

Japan's pay steps sit on management titles: department heads earn 2.05 times untitled staff

Regular employees on open-ended contracts, scheduled monthly wages in June 2025 (¥10,000, overtime excluded); bar length is the wage. MHLW Basic Survey on Wage Structure 2025

**By title level**　small text: average age and index (untitled = 100)

- Department head53.1 yrs, 204.8

  63.58
- Section head49.5 yrs, 170.4

  52.92
- Sub-section chief45.4 yrs, 128.6

  39.92
- No title41.8 yrs, 100

  31.05

Without a title, average pay stays on the bottom step. A specialist track only counts if it reaches the top two.

Figure 1. In Japan's 2025 Basic Survey on Wage Structure, June scheduled monthly wages for regular employees on open-ended contracts were ¥635,800 for department heads, ¥529,200 for section heads, ¥399,200 for sub-section chiefs and ¥310,500 for untitled staff, a ratio of about 2.05 to 1 at the top.

## Why Japanese specialist tracks turn into holding pens

Because most of them were built to solve a shortage of manager seats.

Specialist tracks are old news in Japan. The labor ministry's Employment Management Survey asked companies whether they had one: 16.2% did in 1990 and 19.5% in 2002, almost no change in twelve years. Size mattered. About half of companies with 5,000 or more employees had one (50.7%), against 15.9% of those with 30 to 99. The question was not repeated in the same form later, so 2002 is the latest year I could find.

The Japan Institute for Labour Policy and Training (JILPT), publishing those figures, was blunt about it. Because nobody defined what "specialist" meant, the systems often didn't work, and in many companies they were run as a way of handling the shortage of posts.

In practice that means printing business cards. There aren't enough section-head seats, so the people who didn't get one become "specialist department head" or "department head in charge of" something. Everyone in the office reads those cards correctly.

A track built that way is easy to spot. Its ceiling is a step or two below management. Nobody wrote down how you get in, so everyone assumes you get in by not being promoted. And there's no way back. A young engineer who actually wants to go deep looks at it and concludes the road is meant for someone else.

## Two ladders or one ruler?

I would use one ruler. Grade describes the person: ability, depth of experience, how fast they learn, how independently they work. In my [four-layer model](https://nobusato.jp/en/blog/method-four-layers?hsLang=en) that's the patterns and equipment layers. Leading people, owning a budget and sign-off authority are responsibilities of the seat. They're paid as a role allowance that stops when the appointment ends. That's the rule in [three-track pay](https://nobusato.jp/en/blog/method-pay-tracks?hsLang=en).

Management then stops being a separate ladder. It's one responsibility a role can carry. A manager and a specialist can sit in the same grade on the same base pay.

Mercari, the Tokyo marketplace company, did something close to this in public. In January 2024 it introduced a Principal system for engineers and product managers. According to an article on mercan, the company's own media site, individual contributors had mostly sat at grades MG1 to MG5, and anyone who wanted MG6 or above had to switch to the management side. Under the new system an MG6 engineer gets the title Principal Engineer, and MG7 becomes Distinguished Engineer.

Look at what they didn't do. They didn't build a second grade system. They kept the one MG scale, opened its upper steps to people who don't manage, and gave those steps names that engineers outside the company recognize. The same article says a Principal could move to a VP role or the reverse, and that people on the management path moving back to an IC role is not unusual.

## What does "equal at the top" have to cover?

Money and names. A policy line saying the two tracks are of equal standing convinces nobody.

On money: one grade, one base pay range. The only thing a manager earns above a specialist in the same grade is the allowance for leading people. Make it a fixed amount and write it down, so anyone can do the arithmetic.

On criteria: write them separately. Management is judged on the team's results and the people it developed. The specialist side is judged on reach, meaning how far your judgment travels: your own work, one team, several teams, the whole company, outside the company (customers' decisions, how the industry does things). Write each step as something a person can prove. "Which teams adopted the approach you set this year?" works. "Deep expertise" doesn't, because the review falls back on impressions.

On people: someone has to actually stand at the top of the specialist track. An empty summit is worse than no summit. In the early years I'd open one step fewer rather than create a step nobody can reach.

On names: use titles the market reads. Principal Engineer works because engineers elsewhere know what it weighs. In Japan's labor market, "specialist department head" is mostly read as a parking spot.

## The test: can a manager go back?

A section head decides they're done managing and returns to specialist work. Does their base pay move? That one question tells you whether your dual track is real.

With one ruler, the grade doesn't move and base pay doesn't move. Only the leadership allowance stops. In Japan, stepping down from management is easily read as a demotion, and [a third of former managers stepped down for reasons they didn't plan](https://nobusato.jp/en/blog/managers-who-didnt-choose-to-step-down?hsLang=en). Few choose it. If going back costs base pay, fewer people will try management at all, and the ones who should step down will hang on.

For a foreign company's Japan entity at twenty or thirty people, I don't think you need two named tracks. One grade scale and a leadership allowance are enough. Name the specialist track once you're competing with Japanese tech companies for senior engineers, which is also the band where [the gap with US pay](https://nobusato.jp/en/blog/japan-vs-us-software-engineer-pay?hsLang=en) is widest.

The design is the easy part at thirty people. At a company of several thousand that has run a skill-grade system for decades and printed hundreds of "department head in charge of" cards, the design stops being the problem. Someone has to sit down with those hundreds of people, and the org chart doesn't say who.

Sources (as of November 2026)

- [Ministry of Health, Labour and Welfare, 2025 Basic Survey on Wage Structure, summary section 8 (wages by title level), Table 8](https://www.mhlw.go.jp/toukei/itiran/roudou/chingin/kouzou/z2025/dl/08.pdf)
- [Ministry of Health, Labour and Welfare, 2025 Basic Survey on Wage Structure, definitions (title levels, scheduled cash earnings)](https://www.mhlw.go.jp/toukei/itiran/roudou/chingin/kouzou/z2025/yougo.html)
- [Japan Institute for Labour Policy and Training, labor statistics (2008), 21.2 share of companies with a specialist track (MHLW Employment Management Survey, 1990 to 2002)](https://www.jil.go.jp/kokunai/statistics/kako/2008/documents/21_p244-253.pdf)
- [Mercari, mercan, Establishing a Career as a Specialist: Breaking Down the New Principal System for Engineers and Product Managers (May 14, 2024)](https://careers.mercari.com/en/mercan/articles/41238/)

---

Author

[Nobu Sato](https://nobusato.jp/en/profile?hsLang=en)

Launching in Japan, starting with people and systems. I write about building organizations, sales teams and technology organizations in Japan, in English, Japanese and Chinese.

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