Human Resource Strategies
Based on the group corporate philosophy and its practice system, the Daiken Group has upheld the development of autonomous humanresources that support the growth and can respond to changes (human resource development policy) and the pursuit of an organizationin which human resources fully exercise their abilities, mutually inspire each other, and grow/challenge (internal environmentalimprovement policy) as the policies and has been promoting the initiatives from the perspectives of the promotion of diversity, workstylereform, human resource development, health and productivity management, and challenge-oriented corporate culture. By continuously
deploying the measures from five perspectives, we will lead to producing the favorable cycle, maximizing humanresource value by improving individual performance, and improving the entire group’s corporate value.
l Institutionalization and establishmentof flexible work stylesl Promotion of labor saving andautomationl Pursuit of a sense of satisfaction andjob satisfaction

Improvement ofcorporate
value
Workstyle reforml Promotion of playing a role
without being bound by ageand genderl Support for achieving abalance between work andpersonal constraint, such as
child rearing, nursing care,and medical treatment

Promotion ofdiversity

l Improvement of support for theemployees’ career designl Development of the human resource
development plan and improvementof the education program based on
the planMaximizationof human
resource value

Human resource
development

Healthmanagement

Priority measures and goals in the Medium-Term
Management Plan GP25 3rd Stage
Theme

Priority measures
Total diversity index 3rd Stage

Promotion of diversity

The ratio of female employees hired (Newgraduate nationwide course)
The female full-time employee ratio
The percentage of male employees taking
childcare leave (Three-year average)
The female manager ratio
Long-term care seminar attendance rate

Promotion of healthmanagement

Promotion of workstylereformDiversity training attendance rate (Managers)
The degree of attainment of the employment
rate of persons with disabilities
Personnel composition by age (Difference bygeneration)
The rate of receiving health promotion allowance
Health score (Exercise, rest, and nutrition)
Presenteeism loss rate
Total work time reduction rate
Rate of taking annual paid leave
Employee satisfaction

Reinforcing humanresources development

Enhancement of theoccupational safety andhealthEnhancement of thegovernance system

Job separation rate within three years
Young employees’ career plan training attendance
rateAttendance rate for the prioritized market
enhancement program
Attendance rate for training for management staff
training program
Serious disasterFiscal 2026 goals/KPIs+30 pt (As compared to fiscal2022)
50%
20%
50%
2%

l Operation of the internal venture system
to solicit new business ideas fromemployeesl Operation of the suggestion system tosolicit operational improvement ideas atthe manufacturing basesl Introduction of the Femtech program thatapproaches health issues specific to womenl Payment of the health promotion allowance fornonsmokers

Toward the realization of management strategies
and improvement of corporate value
Improvement of the proposal capabilities
for public and commercial buildings(An increase in sales engineers)

An increase in humanresources assigned
overseas

100%
100%

Improvement of laborproductivity

Within the difference of 10 pt
80%

Improvement of added value

20 pt
25%
3% reduction (As compared tofiscal 2022)
70%
60 pt
Within 15%
100%

Improvement of the effect ofinvestments in education(Reduction of the investments inre-education)

50%
80%
0100%

Female executive ratio (Director)
Degree of penetration of the group corporate
philosophy

60 points or more

DAIKEN GROUP REPORT 2023

An increase inadded value
per employee(An increase inoperating profit peremployee)

Reduction of welfare expenses

Maintenance and improvementof the plant operating ratio

Reduction ofthe manufacturingcosts and selling,general, andadministrative
expenses

10% or more

Initiatives toward the preservation and promotion of mental andphysical health

Based on the idea that our employees’ health is the essential foundation for the group’s sustainable growth and development, we try toimprove every employee’s awareness of health and have started the initiatives toward the preservation and improvement of mental andphysical health. In 2021, we formulated the Daiken health management policy and have been putting effort into the improvement of healthmeasures for both aspects of mind and body since then, such as the payment of the health promotion allowance, quit smoking challenge toencourage our employees to quit smoking, the distribution of health videos, the introduction of the Femtech program that approaches thehealth issues specific to women, such as menstruation/PMS, consultations on fertility treatment, and the implementation of a walking event
led by the company. In March 2023, we were certified as the Health & Productivity Management Outstanding Organizations (Large-ScaleCompany Category) selected by the Ministry of Economy, Trade and Industry and Nippon Kenko Kaigi for the second straight year. We willcontinuously put effort into setting indices to measure the effects of measures and actively providing support and create a virtuous cycle ofthe productivity improvement and company growth.

55An increasein sales in thethree priority
markets

90%/year

Plant mutual safety diagnosis execution rate

Healthmanagement

Challenge-oriented
corporate culturePromotion ofdiversity

Goal management by our unique indices toward the steady promotion ofdiversity
Total diversity index 3rd stagebalanced way, we have set the total diversity index from the medium-The ratio of newly graduated female full-time employees hired(graduates from university/graduate school)
Goal: 50%

term management plan GP25 2nd stage in which the eight diversity
items were indexed as our own indices and manage the goals. From

The degree of attainmentof the employment rateof persons with disabilities

fiscal 2023, we newly added newly graduated females hired, managers’
diversity training attendance rate, and long-term care seminar

120%
100%

The female full-time employee ratio
Goal: 20%

Goal: 100%

attendance rate to the indices and have been promoting the initiatives as
the total diversity index 3rd stage. The total index in fiscal 2023 resulted
in surpassing the goal value and certain results were recognized for theLong-term care seminar
attendance rate
at the age of 40
Goal: 90%

diversity-related initiatives, such as the introduction of the Femtech
program.
* ”The percentage of male employees taking childcare leave” in the total diversity
index is calculated based on the three-year total value to measure the progression
rate over the years.

Managers’ diversity training
attendance rate

The female manager ratio

Goal: 100%

Goal: 2.0%

Fiscal 2022 Results

Workstylereform

The percentage ofmale employees taking
childcare leave
Goal: 50%0%Results in Fiscal 2023

Daiken Group’s Value Creation

To steadily promote the initiatives for the promotion of diversity in a

Fiscal 2026 Goals

Deployed the measures to facilitate the active roles of female employees

abilities, we link the diversity promotion and the workstyle reform and have been integrally promoting the initiatives, such as the formulation of the policy and system,
refreshing awareness, and education and training for upskilling. Particularly in recent years, with a view to further improving corporate value in the medium- to long-term, wehave been deploying a number of measures to facilitate the active roles of female employees. As a result, the percentage of newly graduated females hired, which wasapproximately 8% in fiscal 2011, increased to approximately 46.9% on average of eight years after formulating GP25, and the ratio of female employees has been increasing
year after year. These initiatives lead not only to the active roles of female employees but also to the building of the foundation for the workstyle reform and for employees whowill be in various life events to more flexibly work with enthusiasm. We will proceed with the creation of workplaces where diverse human resources can maximally utilize their

Strategy for Value Creation

As shift to more flexible work styles without being bound by the conventional ideas is necessary in order for human resources who have diverse values to fully exercise theirabilities from the medium- to long-term perspective.

Trends in the ratio of newly graduated females hired and the ratio of female employees hired(%)
60

The ratio of newly graduated females hired (Graduate from university/graduate school)
The ratio of newly graduated females hired (Overall)*
48.3
The female employee ratio
The female full-time employee ratio

50
40

35.9

28.6

30
20
100

18.7
12.4
8.3

26.9

50.0
37.5

53.3

50.0

50.0

42.4
34.0

34.0

30.3

26.1

22.9
21.7
24.9
20.0
21.7 16.0
17.4
17.8
15.9
15.0
14.5
13.7
13.1

52.8

48.3
32.6

29.0

20.3

30.2
24.5

18.4

18.9

19.5

20.2
15.2

16.3

17.4

19.4

20.0

13.4

14.5

18.5

12.8
2016

2017

2018

2019

2020

2021

2022

2023

2026 (Fiscal year)
Goals

24.2

23.6

21.94.5201120122013

2014

2015

* Fiscal 2011-2015 include the four plants in Japan absorbed in April 2015

Established the workstyle reform promotion officeWorkstyle reform promotion policy

40Policy/System

30

Started automatic PC shutdown

10Refreshingawareness

Workstyle reform declaration

Total diversity index goal setting
Trial of working at home
Harassment prevention workshop for department heads

Ikuboss declarations

Full-time work at home

Staggered working hours system

Diversity exchange meeting

Diversity management
training

Harassment prevention training

0Upskilling

GP25 3rd Stage

Comeback system*

Diversity promotion policyIntroduced the hourly paid leave system

20

GP25 2nd Stage

Data50GP25 1st Stage

Formulation of GP25

Past
60 key initiatives

Diversity management training
Female exchange meeting~Deployed it to the contract employees~Deployed it by job typeCommunication exchange meeting

Next-generation sales recommendation project
Training for female leader candidates

Support of thecombination

Three-way meeting at the timeof maternity leave and childcare leave

Explanation meeting for the system to support the combinationof work and childcare
Seminar to support the combination of work and childcare
Seminar to support the combination of work and long-term care

*Comeback System: A common name for the system to reemploy voluntarily retired persons as full-time employees

DAIKEN GROUP REPORT 2023

56

Human Resource Strategies
Human resource
development
Challenge-oriented
corporate culture

Realization of the growth strategy and development of human resource
for the next generation

Believing that cultivating autonomy in our employees is a key for our further growth and persistent corporate value improvement, we have provided
various training opportunities for our employees to acquire the skills or knowledge needed for each service year, rank, and job type. From the mediumterm management plan GP25 3rd Stage, we newly established the skill enhancement training and have been enhancing capabilities required for eachrank. Moreover, to develop human resources who can be active in the three markets that are positioned as priority markets toward the realization of thelong-term vision, we will proactively invest in human resource development with a focus on the priority market enhancement program. Furthermore,
toward the realization of the challenges to new business domains and the creation of values that exceed the expectations, we believe that the attitude
and action to challenge new things are essential and put effort into the improvement of various systems that admire and support challenges. In theinternal venture system to solicit business ideas from employees, commercialization of the vegetable garden system selected as the first case wasdecided, and its full-fledged proposals has started in April 2023.

Three pillars of the Daiken Human Resource Development Policy
1. Provision of learning opportunities

Active provision of learning and growth opportunities to meet the expectations of stakeholders through business and contributeto society

2. Support for career development

Support for career development from the medium- to long-term perspective that respects individuality

3. Revitalization of OJT and formationof a culture of learning independently

Nourishment of an organizational culture to continue refining themselves and can grow together by motivating surrounding
peopleKey training system

Training by rank

Department
head class

Senior management candidate
development training
Training for new department heads

By job type and theme

Skill enhancement training

Sales

Manufacturing

GlobalTheme

Personaldevelopment

Enhancement of business skills
for each rank

Department head candidate
development training

Responsible
person class

Training for those promoted

Presentation

Career plan training

Logical thinking(Basic problem resolution version)

Follow-up training
after joining the company
New employee orientation

Business communication

Enhancement of thedevelopment/ following-up
of young employees

Training for
those in themiddle level
young rank in
Basics ofmanufacturing
sales skill
Follow-up
enhancement
training for
young
manufacturing
employees

Language education

Application Manufacturingof sales skill leader classenhancement
training

Problem resolution (Practical version)

Correspondence education

Leadership (Cross-industrial exchange)

Management school

Middle level
team leader
class

Evaluator training

OJT leaders / Mid-career employees /Appointment as full-time employees / Start-up

Training for new managers

Leader candidate training
for female employees

Prioritized market
enhancement
programCoaching
Ability to make decisions

Compliance training

Managerial
position classAccounting

Pre-overseas assignment training

Finance

Implementation of the employee satisfaction survey
We set the employee satisfaction survey as our own index in the medium-termESG plan from fiscal 2020 and have been managing the goals. In addition, wequantify the degree of feeling job satisfaction through the annual survey and bygrasping the employees’ view of work and the anxiety factors concerning work,
we make use of them for the creation of rewarding workplaces and aim at
improving satisfaction for all workplaces. While the employee satisfaction
survey in fiscal 2023 was 54.4%, down 0.2 points from the previous fiscal year,
the degree of feeling job satisfaction was 51%, up 4.0 points from the previous
fiscal year. We analyze the survey results from various angles, such as work
contents, the amount of work, and personal relationships at workplaces, reflect
them in the future human resource strategy and measures, and aim to improve
both indices.

57

DAIKEN GROUP REPORT 2023

Employee satisfaction and the degree of feeling job satisfaction
(%)
60

55.4

Employee satisfaction
Degree of feeling job
satisfaction

56.7

55

52.0
50

45

54.6

51.6
47.0
2020

2021

2022

54.4
51.0

2023(Fiscal year)

Initiatives toward the penetration of the group corporate philosophyInitiatives in fiscal 2023
Based on the results of the survey on the degree of penetration of the group corporate philosophy implemented to the group’s employees, we deploy thepenetration measures from the three perspectives of transmission, sharing, and evaluation. By continuously following the philosophy penetration cycle oftransmission, sharing, and evaluation, we promote the penetration of the philosophy in daily operations, regularly monitor the degree of penetration, andreview for further effective measures.

Daiken Group’s Value Creation

While globalization and diversification of human resources progress, in order to realize the further growth as a company, it has become important toshare the common mission, company vision to aim for, and values to cherish with all employees and adjust the direction to move forward. So, our groupaims at improving sustainable corporate value and enhancing management based on the philosophy, evolved the past management philosophy in April
2017, and established the group corporate philosophy. To particularly realize the growth strategies as specified in the long-term vision and medium-term
management plan, it is essential for all the group’s employees to practice and put the vision upheld in the group corporate philosophy, such astechnology, ideas, and passion, new challenges, and agile action that captures changes and opportunities, into action. Based on such thoughts, we set
the degree of penetration of the group corporate philosophy as an important theme from the perspective of ESG since fiscal 2020 and have beenproceeding with the initiatives to improve the degrees of penetration and practice.

Transmission(1) Continuous transmission by the top management(2) Publishing the cases of practicing philosophy in the company magazine
We covered the unique initiatives by thedepartments that carried out operations while
viewing the group corporate philosophy as the thingthat is familiar to them in the company magazine
from various perspectives. By transmitting the goodcases of practicing philosophy to all group
employees, we promote their understanding andSpecial feature page in theenhance their awareness.

Transmission by the top
managementcompany magazine

Transmission

Information provision to refreshawareness

Philosophy
penetration
cycle
Evaluation

Setting of the place to admire andcommend how they are practicingphilosophy

Strategy for Value Creation

The president transmits his thoughts on thecorporate philosophy as a message in thecompany-wide department head meeting andvideo streaming on the anniversary of foundation.
Toward the formation of a culture to always have
our technology, ideas, and passion upheld in thephilosophy and to challenge, the top management
is committed to initiatively set them into action.

Sharing

Setting of the place to think
about and discuss philosophy

Evaluation

Sharing

For the purposes of facilitating understanding of the group corporate philosophy
and nourishing a culture where practicing philosophy will be admired, weimplemented the Daiken Awards to collect and commend the cases ofpracticing philosophy in daily operations since fiscal 2020. In fiscal 2023, we
implemented it by dividing into the themes of the overall category, theworkplace creation category, and themanufacturing category and a total of 30
teams participated. Regarding themanufacturing category, we held the casepresentation competition and 13 teams
participated from home and abroad and madea presentation on their activity content andAwarding ceremony
connection with philosophy and shared it.

For the purposes of becoming aware of the group corporate philosophy andcreating an opportunity to review one’s action, we have been holding thephilosophy sharing workshop in training by rank, which is for the young andmiddle level employees as well as new managers, since fiscal 2019. In theworkshop, check the group corporate philosophy and group conduct
guidelines from one’s daily operations,discuss and share the state of practicing
philosophy, and facilitate the improvement ofaction. In fiscal 2023, 99 employees
attended the workshop.
In-house training

Data

Implementation of the survey on the degree of penetration of the group corporate philosophy
Trends in the scores of the degree of penetration of the group corporate philosophy

60

52 pt

56 pt

57 pt

60 pt

pointsor moreFiscal 2018
Results

Fiscal 2020
Results

Fiscal 2022
Results

Fiscal 2023
Results

Fiscal 2026
Goals

We implemented the survey on the degree of penetration of the group corporate
philosophy once in two years since fiscal 2018, but to more diligently understandthe changes in the employees’ awareness and consider and implement thepenetration measures to respond to such changes, we have changed toimplement it once a year since fiscal 2023.
The score in fiscal 2023 was 60 points, up 3 points from the previous year andcleared 60 points or more, which is the goal in fiscal 2026, the final fiscal year of
the medium-term management plan GP 25 3rd Stage. In particular, it wasassumed that the deployment of the penetration measures in units of department
through the department head policy book significantly contributed, and we will
promote the initiatives toward the further improvement of the degree ofpenetration, such as the continuation of the penetration activities per department,
and the enhancement of the transmission and sharing of good cases.
DAIKEN GROUP REPORT 2023

58