Strengthening Human Capital
Basic approach
Since the birth of the UACJ Group, we have aimed to build a solid human resource base by actively investing in our human capital. In particular, we have implemented a variety of measures which take into consideration the enhancement of foundational human resources who embody the UACJ Way, and the augmentation of strategic human resources who will drive the achievement of our medium- and long-term strategies. For example, the engagement survey has a response rate of about 80% every year, and the results of the survey are analyzed and reflected in subsequent personnel policies. In addition, we have worked to “visualize” the extent to which the various measures implemented in the past have been reflected and the outcomes achieved as survey results, and have focused on further enhancing relevant systems, including with regard to internal Group recruitment systems, 360 degree feedback, and the formulation of personnel rotation guidelines. In the engagement survey conducted in fiscal 2023, the response score (on a 5-point scale) for the “level of implementation of the UACJ Way” increased from 3.42 to 3.51, and the response scores for items such as “promotion of human resource development” and “realization of appealing compensation packages” also exceeded the previous year’s scores, showing steady results of efforts to enhance our human capital.
Human capital value creation process
- Noto1 Consolidated
- Noto2 Non-consolidated
- Noto3 Non-consolidated management positions
- Noto4 UACJ Group in Japan
Human Resource Strategy Project
In recent years, there have been significant changes in the employment environment, including a shrinking workforce due to the declining number of children and aging population, greater mobility of human resources, and other significant changes in the values of workers, such as a growing awareness of the importance of work-life balance and careers. Companies must realize that it is now they who are selected by workers, and they must foster an organizational climate that is attractive to employees and create a workplace environment where they can work with vigor and enthusiasm.
Given this context, we have identified three issues: “strengthening human resources (human resources strategy)” to continue to provide sufficient personnel to realize our management philosophy and execute our business strategies in a timely manner; “strengthening organizational capacity” to enhance our strength as an aggregate of the activities of a diverse range of individuals, and “improving mechanisms,” such as reviewing personnel and training systems and visualizing human resources information to achieve these objectives. In this regard, plans to further strengthen human capital during the period of the fourth mid-term management plan have been developed.
The Human Resources Strategy Project, which commenced in fiscal 2021, focuses on reforming the human resources system in line with current trends and developing human resources from a new perspective, with the aim of viewing human resources as capital and deriving the maximum possible value from them. In this way, we will produce a large number of human resources who can embody the UACJ Way, and will work to ensure the sustainable growth of our company as a whole and our long-term management vision, UACJ Vision 2030 (Vision 2030). We also believe that collaboration and cooperation between each business division and personnel division is essential in implementing this Human Resources Strategy Project. Each business division will consider the human resource requirements needed to achieve its business goals. Meanwhile, personnel divisions will take a step beyond “managing” human resources to become divisions that “support” human resources, establishing Group-wide personnel platforms and providing support for developing talent in each business division. By sharing the wishes of each business division and personnel division, as well as the problems they face, we will work to ensure the optimal placement and development of human resources.
Coordination of management strategy and human resources strategy
Human Resource Strategy Project Implementation Steps
Running over the 10 years up to the fulfilment of Vision 2030, the Human Resources Strategy Project is divided into three phases, 1 to 3, in sync with the mid-term management plans. We plan to step up these efforts as we tackle the themes established for each phase. As part of Phase 1, which was linked to the third mid-term management plan running from fiscal 2021 to fiscal 2023, we not only proceeded with integration with our business and human resources strategies, but also worked to build a foundation for the realization of Vision 2030. This involved developing a profile of “ideal human resources” and conducting interviews to identify the issues faced by each workplace in terms of human resources. After this was complete, we began consideration of various policies aimed at transforming our human resource management. During Phase 1, with an eye to the future, we also worked with individual business divisions to start the development of succession plans for management staff. As such, we are enhancing our efforts aimed at producing leadership talent, from career development that cuts across business divisions and support for training.
In Phase 2, which began in fiscal 2024, we plan to improve the effectiveness of our human resource portfolio, which was developed as part of the Human Resource Strategy Project, and to build on the various policies and infrastructure put in place during Phase 1 to further speed up reform initiatives. In order to fulfil Vision 2030 and remain a company that is appealing to employees, even amid a business environment undergoing dramatic changes, we are developing our human resource systems and working to further strengthen our human resource capabilities and organizational capacity.
Visualize the financial impact of human capital
How can a company increase its corporate value? We have set out our “value creation process” to increase corporate value through the use of six types of capital. We believe that initiatives addressing human capital are one key factor, and that employee awareness and various human resource policies have a significant impact in achieving higher financial performance and increasing corporate value.
With this in mind, we are working to summarize the relationships between human capital, financial performance, and corporate value improvement, and have begun formulating measures to further enhance corporate value and exploring how we can best capitalize on these relationships. We believe that analyzing the correlations between financial indicators and human capital measures, such as various human resource policies, the promotion of diversity, and the practice of health management, should be used as a reference in developing human resource strategies to improve corporate value.
Currently, we conduct ongoing engagement surveys of our employees and apply the survey results to our business and organizational management. The results are communicated to each department, and by understanding changes in employee awareness, we are able to ascertain the effects of various personnel measures and the challenges we currently face. Taking this a step further, based on the relationship between human capital and improvements in business profits and capital efficiency, we are attempting to conduct analyses from the perspectives of what effect the enhancement of human capital achieved through the planning and implementation of human resource strategies has had, and what sort of actions would increase business profits and improve capital efficiency. By examining the link between human capital and corporate value in this way, we hope to pursue human capital measures that will improve ROIC, and ultimately PBR, in the future.
As part of this effort, since fiscal year 2023, we have been joined by the Nobuyuki Isagawa Laboratory and Kazuo Yamada Laboratory of Kyoto University, and are working together on a project to analyze the impact of human capital on financial performance. In the first fiscal year, the results of engagement surveys conducted to date at Nagoya Works, R&D Center, and Headquarters were analyzed in relation to diversity indicators such as the proportion of female employees, and to matters such as the workplace environment. In fiscal 2024, we plan to conduct a more fine-grained analysis, examine the content of the engagement survey, and set out the correlation between engagement scores and capital efficiency, as shown in the figure below. We will also expand the scope of analysis to cover other manufacturing sites. Based on these findings, we will unravel the correlation between engagement surveys and increased corporate value, thereby connecting these to enhanced human capital and well-being.
After summarizing the effects of human capital on enhancing corporate value and financial figures, we will use this information to develop and implement more effective human resource strategies that maximize the potential of our talent. We believe that proceeding with this project is a very important step in improving corporate value, and that it will prove to be very effective.
Coordination of management strategy and human resources strategy
