Enhancing Human Capital

Approach to Enhancing Human Capital

Approach to Enhancing Human Capital The Sangetsu Group has identified “Enhance Human Capital” as a priority measure for increasing corporate value in a sustainable manner, and is making proactive and systematic investments and implementing strengthening measures. The objective of “Enhance Human Capital” that we are working on is to make our company underpinned with sustainable growth potential through the mutual interaction of “Employee Happiness” and “Company Growth.” The foundation for achieving this interaction is “Desire for Growth of Each Employee. ” In enhancing human capital, we will be aiming to maximize the capabilities of individuals and the organization by increasing the number of mid-career hires and supporting employees’ motivation for growth through our policies of “Growth and Active Utilization Support Program” and “Create an Environment Where Employees Are Able to Maximize Their Capabilities.

Human resource development policy

We respect employees who take on the challenge of self-improvement and provide opportunities for growth, active participation, and self-actualization.

Provide educational opportunities that promote employees’ life planning and growth
By expanding promotions and granting them earlier, employees will gain experience in the field and future managers and executives will be developed
We assign personnel in a planned manner so they gain experience in a variety of roles and generate vitality

Growth and Active Utilization Support Program

Expansion of Education and Training

We have defined our human resources development policy as: "We respect employees who take on the challenge of self-improvement and provide opportunities for growth, active utilization, and self-actualization," and are promoting the expansion of education and training.
We provide level-based training aimed at strengthening business skills, business building capabilities, and organizational management capabilities, as well as training tailored to specific themes such as digital human resource development, career design, and strengthening expertise by job type, in order to support employees to increase their motivation to grow.
From FY2023, we have increased selective training and opportunities for cross-industry exchange in order to develop management talent and next-generation leaders. For full-time employees and special contract employees, we have introduced Udemy Business, an online learning tool designed to support proactive learning by employees. We are also promoting reskilling to support talent development and strengthen expertise and business-building capabilities, as set out in our Medium-term Business Plan.

Changes in Training Hours (non-consolidated)

Education system diagram

Support for Career Formation

In addition to improving the capabilities of each individual by providing education and training, we are also promoting support to motivate employees and cultivate a sense of career ownership. In FY2024, we implemented an "In-House Internship" program to experience departments other than their own. We also support self-directed career development by actively creating opportunities for employees to consider their career goals, the capabilities required to achieve them, and the challenges to be addressed. Opportunities include online department-introduction events and joint projects with other companies conducted through our internal application system.

Review of 2024 In-House Internships

No. of Participants: 125
No. of Hosting Departments: 48

Personnel system reform

The Company is currently reforming its personnel system, with “establishing a business foundation in which employees are responsible for management” as one of the key initiatives, and we began the operation of a new personnel system in April 2022. Under the new personnel system, the appointment of managers has been changed from the previous system of “ability level x position” to a “grade system corresponding to duties,” thereby clarifying the compensation system according to the purpose and results of the duties. Furthermore, by dividing the grades of duties into two tracks, namely “management track” which specializes in organizational management and managerial skills, and “professional track” which utilizes highly specialized skills, we will broaden the scope of careers and prepare to develop, strengthen, and recruit specialized human resources.
The new system is a “duties-based” personnel system, but it is different from the so-called stereotypical job-based system. The “duties and grade” under the new system needs to be adapted to the times and flexible to create more competitive jobs and duties, and while the basic elements will remain, it will constantly evolve. We will utilize this new personnel system to proactively create even more opportunities for the promotion of human resources.
In addition, with regard to the remuneration system, we have implemented an overall base salary increase, including a 35,000 yen increase in starting salary for university graduates in FY2023. In FY2024, we increased the starting salary for university graduates by an additional 15,000 yen, and provided increases to the base salary of existing employees with a focus on each grade. Through this, we are constantly reviewing and improving the remuneration system to ensure that it is in line with changes in the market and each employee’s role.

Overall picture of the duties grade and ability level system

Engagement

Meticulous human resource management

In promoting “Improving Human Capital Value,” it is important not only to implement measures such as sharing values, reforming personnel systems, and hiring mid-career employees, but also to create an environment in which these measures can function and each employee is highly motivated and able to maximize their capabilities. We are assigning human resources staff to each organization to perform detailed human resources management for all aspects of career design, including education and training, assignment, and transfers, and by providing career design support and the appropriate assignment of personnel based on an understanding of each employee. In FY2024, we held one-on-one meetings with approximately 900 employees to listen to their work-related concerns and career plans and to provide related support. We will continue to promote “Improving Human Capital Value,” by confronting and understanding each and every employee, to lead to appropriate personnel transfers and reform the culture of the organization.

Role of human resources staff by organization

Understanding of each employee
Career design support
Appropriate human resources assignments and transfer considerations
Enhance organizational development and management capabilities
Reform culture and mindset of the organization

One-on-one meeting with the human resources staff by organization

Engagement surveys

We believe that for a company to grow, it is essential that employees empathize with the company’s philosophy and management policy, and are highly engaged in their work. We have positioned “Employee Engagement” as a priority management item and conducted an employee awareness survey targeted at all employees to reflect the results in reforms to our organization, systems, and culture. In FY2023, we introduced a new engagement survey with the aim of speeding up tallying and analyzing, gaining an understanding of the status of our company by comparing it with others, and implementing improvement plans at the organizational level. Survey results are reported to outside directors and management, and are also shared with all employees via a portal site. For department-specific issues that became evident during the analysis, the Human Resources Department and human resources staff by organization support each organization, with section managers and team members working together, while formulating and implementing action plans for improving engagement.

Follow-up utilization of engagement surveys

Quantitative Target^※

	FY	Engagement score
Result	Aug. 2025	58.7（A）
Target	FY2025	58.0（A）

※Scores calculated by “Motivation Cloud,” a service offered by Link and Motivation Inc.

Trend of Engagement Score

FY2024 Priority Issues and Responses (partial list)

Priority Issues	Response
Creating a shared focal point for the Company's vision	We held Corporate Philosophy Workshops to emphasize the importance of our Corporate Philosophy and build a sense of understanding and acceptance among employees, with the aim of creating an organization in which all employees unite and move in the same direction (with a total of 300 participants).
Improving low-engagement organizations	In addition to the general lecture sessions for all managers (covering issue analysis methods, key points for formulating countermeasures, and the sharing of best practices), we also held consultations between the heads of the relevant departments and HR staff assigned to each organization, as well as individual follow-up sessions in which the survey provider offered advice on improvement measures.

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