Addressing human capital shortages caused by Japan's declining birth rate and super-aging society

For the HITOWA Group, whose business activities contribute to people and lifestyles, providing services with a human touch is the source of the value we offer. However, Japan's birth rate continues to decline and its population continues to age, making the issue of human capital shortages even more severe. In the 2040s, the population of people aged 65 or over will reach its peak, with the percentage of senior citizens being in the upper 30% range. *1 While the number of workers in the nursing care industry was 2.15 million in 2022, by 2040 it is forecasted to require an additional 570,000 people for the entire industry. *2 In the childcare industry, while the number of wait-listed children is falling and the number of children is declining, Japan has a shortage of childcare workers. Turning to the food services industry, inbound tourism demand is increasing, which is driving competition between food establishments to attract chefs. Dealing with these human capital shortages is a critical business issue for our Group and represents our greatest human capital issue.

Improving our employees' experience values by optimizing our human capital management

To deal with these human capital shortages, the HITOWA Group is using DX to improve productivity and has dedicated itself to optimizing human capital management. In October 2023, we created a new human capital management system and launched initiatives throughout our Group companies. The human capital management system has a range of areas that employees experience from the time they join our organization until their departure, including career development, career opportunities, support, and performance reviews. We define materialities, action plans, and KPIs for each of these areas. We analyze the issues employees face from the time they are hired to the time they leave the company, implement measures to address these issues, and visualize our progress in dealing with them. In this manner, we seek to improve the experience values our employees can gain by working in the HITOWA Group. We turned our attention to experience values because motivating employees ultimately improves value for our customers and contributes to the creation of corporate value for the entire Group.

Leveraging our understanding of diversity as a strength, as we create forward-looking working environments

I believe that one of the strengths of the HITOWA Group is our understanding of diversity. Since the HITOWA Group supports the lives of people of all ages, we provide our services to a diverse range of customers. In the process of providing services with a human touch, which is the source of the Group's value, our employees naturally grow more diverse, and as a result, they gain a greater understanding of the importance of diversity. This is a major strength, and it comes from the nature of our business. As Japan's population shrinks further, it will become even more important to increase the diversity of our workplaces, including the use of non-Japanese personnel. We will accelerate the creation of diverse workplaces, and strive to build a foundation that allows us to provide people with services that are aligned with their lifestyles, going forward.

Becoming a company that motivates employees, creating happiness for each and every one

I am also a member of society, and I have my own form of happiness. In the same way, each and every employee of the HITOWA Group has their own form of happiness. I think one could say that the essence of diversity lies in recognizing that each person's happiness is unique. By optimizing human capital management, I want to enable each of our employees, with their diverse backgrounds, to work toward achieving their own individual happiness. As a member of management, I must think about our human capital strategies from a business perspective. Meanwhile, increasing the overlap between the happiness of our employees and our human capital strategies is the source of our ability to continue providing high quality services to customers. I will listen closely to each employee, while identifying the issues they face, working to address them, and visualizing the progress we are making. By doing so, I hope to make our company an even more rewarding one to work at.

• *1 Ministry of Health, Labour and Welfare, "2024 White Paper on the Ageing Society "
• *2 Press release by the Ministry of Health, Labour and Welfare, "Number of Necessary Nursing Care Employees Based on 9th Reporting Period Nursing Insurance Project Plan"

ITO Masanori
Head of Group HR