Hitachi Integrated Report 2022

CEO Message

Whatʼs Hitachi

Introduction

The Story of Collaborative Value Creation with Stakeholders

Business Strategies

Value Creation

Materiality

The Value Creation Process

Sustainability

Mid-term Management Plan 2024

Data

39

Financial Strategies

CFO Message

Corporate Governance
Human Resources Strategies

Human Resources Strategies
10 Years of Accelerating Global Growth Utilizing an Acquired HR Foundation
To develop the Social Innovation Business, Hitachi must
explore social and customer issues and collaborate withcustomers to create unique new solutions. Over the past 10
years, we have retained and developed a diverse range ofhuman capital, the driver of sustainable growth, and createdan organization facilitating innovations and the creation of newvalue for a global and digital age. We believe human capital(people) is a wellspring of value in terms of Social Innovation
Business global deployment. To realize a sustainable society,we will marshal the strengths of our more than 300,000
employees and continuously provide value to our customers
and society.

〜Mid-term Management Plan 2015

〜Mid-term Management Plan 2021

Transformation toSocial Innovation Business

Autonomous, decentralized
growth in each business field

Mid-term Management Plan 2024
and beyond

Next 10 years of growth─Sustainable growth with assets by acquisition─

Major initiatives and achievements up to now• DEI promotion
Regularly conducted Womenʼs Summits
Held DEI strategy and media briefing sessions
Increased ratio of female and non-Japanese
executive and corporate officers• Talent acquisition and development
Management leader selection and development
Digital specialist acquisition and development

Beyond2024• Development of global HR foundation
Hitachi Global Grade (HGG), Global Performance Management (GPM), Hitachi University, others

Global HR
management 3.0
Global HR
management 1.0
20112024 Human Resources Strategy

Global HR
management 2.0

Become the employer of choice withdiverse talents, equitable opportunity
and an inclusive organization to contributeto growth by Green, Digital and Innovation

Launch of global HR initiatives

Main KPIs
Digital talentJapan

Ratio of female and non-Japanese executive and corporate officers
Women

Overseas(persons)
100,000

98,00080,00067,00020,000059,00038,00015.0

1530,00011,00019,00029,000FY2019FY202139,0003
0

FY2024

11.6

10.1

9
6

7

6.4

(persons)
12
9

Overseas

Total

（%）

100

6

82.0

80.0

80
60

8

65.0

56.2

68.0

60.0

40

5

3

2.6
2

0
FY2018

Employee engagement (positive response rate)
Japan

（%）

12

60,00040,000Non-Japanese

FY2021

FY202420
0
FY2021

FY2024

Hitachi Integrated Report 2022

CEO Message

Introduction

Whatʼs Hitachi

The Story of Collaborative Value Creation with Stakeholders

Materiality

Value Creation

Business Strategies

The Value Creation Process

Sustainability

Mid-term Management Plan 2024

Corporate Governance
Human Resources Strategies

Data

40

Financial Strategies

CFO Message

HR Strategy within the Mid-term Management Plan 2024
In this global and digital era, we must explore the needs of societies and customers throughout
the world and provide services that resolve the issues they face. Human resources are themost critical driver in terms of facilitating the acceptance of diverse values, and of responding
to the changing value sought by customers and to the increasing complexity and severityof social issues. Hitachi formulated the 2024 HR Strategy with the mission of acquiring anddeveloping diverse human resources, providing equitable opportunity, and contributing tobusiness through an inclusive organization. To grow business through a data-driven cycleof value co-creation with customers and a growth model that realizes higher earnings

throughout the cycle, we aim to maximize talent (human capital and individual capabilities)
and its engagement to achieve growth in each business. We also to promote inter-divisioncollaborations and enhance global productivity and efficiency to cultivate an awareness andculture oriented toward sustainable growth. Specifically, we will acquire the global leaders anddigital talent required to achieve growth. We will retain, develop and place the right people in
the right places at right time within the Hitachi Group, and make an effort to enhance employee
wellbeing and engagement. Hitachi will become the “Employer of choice” in global markets.

HR Mission, Vision and Strategy

MissionContribute to business through diverse talents,
equitable opportunity, and inclusive organization.

VisionWe lead transformation into “Employer of choice” in global market
to become a vibrant “Talent Destination” that contributes to society
Pillars

Key Initiatives

People（Talent）

1. Acquire, retain, develop and allocate global leaders and digital talent to maximize their potential
Maximize talent
2. Place the right people in the right places (matching) at right time in the Hitachi Group(human capital and individual capabilities)
3. Enhance employee wellbeing and engagement
engagement for growth

HR Strategy

The 2024 HR Strategy comprises three main pillars forrealizing individual employee and organizational growth:
People (talent), which involves acquiring, retaining anddeveloping global and digital talent, positioning the rightpeople in the right places, and promoting employee
wellbeing and engagement; Mindset (culture), which involves
the cultivation of a corporate culture realizing innovation,
ongoing and autonomous skill development, including
upskilling and reskilling in consideration of individual careerdevelopment, and the promotion of innovations andchange; and Organization, which involves promotion of
the transformation to a high-quality human capital divisionthat enhances DEI, breaks down organizational silos andengages in co-creation in order to ensure diverse humanresources can work energetically with diverse values.
Hitachi will work to foster a corporate culture enabling thegroup’s more than 300,000 human resources to maximize
individual potential while coming together to create anorganization where everyone plays an active role.

Mindset（Culture）

Fostering a mindset andculture for growth

4. Embody Hitachiʼs founding spirit and cultivate global Hitachi culture to realize sustainable growth
5. Promote growth mindset (ongoing, autonomous skills development, including upskilling and reskilling)
6. Promote innovations and transformations: Ensure psychological safety and encourage
the taking on of challenges

Organization
7. Break down organizational silos and collaborate to enhance customer value
Promoting collaborations between divisions 8. Create new workstyles
for growth and the realization of
9. Utilize digital technologies to transform HR with the provision of higher-quality HR services and solutions
global productivity and efficiency
Foundation• Ensure physical and mental wellbeing and safety• Strengthen exhaustive risk management (compliance, prevent incidents and accidents,
respond to disasters, etc.)

Hitachi Integrated Report 2022

CEO Message

Introduction

Whatʼs Hitachi

The Story of Collaborative Value Creation with Stakeholders

Materiality

Value Creation

Business Strategies

The Value Creation Process

Sustainability

Mid-term Management Plan 2024

Corporate Governance
Human Resources Strategies

Data

41

Financial Strategies

CFO Message

Diversity, Equity and Inclusion (DEI)
Hitachi is committed to implementing DEI (Diversity, Equity and Inclusion) in the organization to
become a global leader and foster a sustainable growth of our business. Sustainability is thevery core of Hitachi’s business strategy, and to be a global leader in Social Innovation, Diversity,
Equity and Inclusion is a crucial component for successful growth. A diverse workforce that
represents society will allow the group to better understand customers and society’s needs. For
this reason, in Hitachi DEI strategy has been integrated into the core of the new MTMP as part of
the Sustainability structure, with the aim to strengthen the management structure and integrate
all the sustainability topics in one organization and to create a strong and coordinated approach
toward ESG.
From this fiscal year, we have added “equity” as a key element of the DEI plan, showing a clear
commitment to create “equitable opportunity for everyone.” At Hitachi, we recognize that we are
all different, and therefore each person may have different needs. By including Equity in our DEI
strategy, we consciously seek to address the needs of each person based on their own unique
circumstances. By recognizing differences, we are better able to provide everyone with accessto the same opportunity and to fulfil their potential based on their will and competences.
There’s growing evidence that Diversity drives innovation, as diverse teams, working in an
inclusive environment, can lead to better ideas. By providing and fostering an equitable andinclusive environment, Hitachi will be able to create effective and innovative technologies totackle climate crisis, respect planetary boundaries and increase people’s wellbeing.
Being a global player, Hitachi is committed towards all the diversity pillars, such as age, gender,
background, ethnicity, sexuality, religion, disability, marital
status, and thinking style. All of those are relevant. To track
our progress, Hitachi has identified and set KPIs for threemain global themes common and applicable to all businesses,
everywhere, which are gender balance, cultural diversity andmulti generation. In 2021 Hitachi announced publicly a global
commitment, to reach 30% female and 30% non-Japanesein executive and corporate officer positions by fiscal 2030
in Hitachi, Ltd. Each Business Unit and function part of thegroup at the global level also has set DEI targets for diversity indecision-making layers and female managers by fiscal 2024,
in accordance with their business strategy. In addition to these
KPIs, each business and region is setting specific targets Lorena Dellagiovanna
focused on other dimensions, prioritizing and adopting actions Vice President and Executive Officer,
Chief Sustainability Officer, Head ofaccording to their specific needs and business strategies.
Global Environment Division, and CDIO

Gender Balance
For our business to be successful, we want our workforce to have equal representation of thesociety we want to serve. About 50% of the world population is female. For this reason, we set
specific targets for gender balance, creating more opportunities for women across the business.
We provide access to roles through recruitment, offer opportunities for their progression into
leadership positions and support to ensure a workplace where women can thrive. As the group,
we are putting in place many activities on a global level. For example, in Japan, the company isproviding support for a childcare-work balance, pre-maternity leave and reinstatement support
seminars, and the development of childcare facilities, as well providing paternity-maternity leaveseminars. As of fiscal 2020, the double-income ratio had increased to 30%, and participation inchildcare leave and leave for the purpose of childcare among men had increased to 35%. We
believe these efforts can improve wellbeing and promote personal diversity through participationin childcare.

Cultural Diversity
Being culturally diverse is about creating a team that reflects the global nature of our company.
Hitachi has grown into a global innovation business from its Japanese roots, and our desire isthat the global and diverse nature of our business portfolio should be reflected in our people,
particularly at the decision-making levels. By providing the opportunity for more individuals fromdifferent nationalities to progress into leadership, we create opportunities for Hitachi to accessnew markets and sustain our global growth. For example, Hitachi’s R&D team, being consciousthat language can often present a barrier to integration, is working to place more English
communication in their promotional activities, replacing Japanese-only communication.

Multi Generation
Technology and society change fast, and the voice of our younger colleagues is essential in
Hitachi’s approach to innovation. We seek to attract new generations of colleagues into our
workplace and ensure they contribute to our thinking. We recognize the value that individuals
can bring regardless of age and therefore our aim is that colleagues are recognized based oncompetence rather than age. For example, to attract and retain future talent, Hitachi Energy has
set targets on early career hiring (under 28 years old), partnering with university relations andour Power+ trainee program. Its Diversity 360 scheme also focuses on lifelong learning. Hitachi
Energy has also ensured that its recruiting policy creates an inclusive workplace by examining
areas such as the office infrastructure and embedding flexible working practices.

Hitachi Integrated Report 2022

CEO Message

Introduction

Whatʼs Hitachi

The Story of Collaborative Value Creation with Stakeholders

Business Strategies

Value Creation

Materiality

The Value Creation Process

Sustainability

Mid-term Management Plan 2024

Data

42

Financial Strategies

CFO Message

Corporate Governance
Human Resources Strategies

Enhanced Acquisition of Digital Talent
To expand the Social Innovation Business, Hitachi must retainand develop digital talent to drive Lumada business growth.
In the Mid-term Management Plan 2024, we aim to become
a global top-class DX company with plans to increase theranks of digital talent from 67,000 at the end of fiscal 2021 to
98,000 by the end of fiscal 2024, mainly overseas, including
at GlobalLogic and Hitachi Vantara.
GlobalLogic has systems in place and track record of timely
human capital acquisitions required for business, leading
to the reinforcement of global human capital in the Digital
Systems and Services sector, the driver of the Lumada
business Groupwide.
At the same time, in Japan, we are strengthening humancapital by developing internal human capital and recruitingfrom outside the company.
In developing internal human capital, we will accelerate
the bolstering of digital capabilities necessary for businessgrowth through digital literacy e-learning to inculcate a basic
understanding of digital transformation (DX) and Hitachi’s
digital business, DX training to develop basic human capitalable to engage in digital businesses as project members,
and enhanced training programs for each skill and position,
including OJT programs aimed at developing professional
human capital able to plan and lead projects.

Further, when recruiting from outside the company, we seek
new graduates who are treated competitively in the digitaltalent recruitment course, and promote the retention oftalented human capital, including experienced mid-careerhires in Japan and recruited directly from India, Eastern
Europe and other overseas locations.

Digital talentJapan

Identify capabilities and scale of human capital required forthe digital business; strengthen human capital capabilities
through internal training, external recruitment and M&A

Overseas(persons)
100,000

98,000Digital capabilities
specialist

80,00067,00060,00040,000

Human capital equippedwith existing business skills
Accelerate and digital capabilities

customerco-creation

59,000

Advanced technologies
researchers developing
differentiating technologies

38,00020,00030,00011,00035,00012,0000

19,00023,00029,000FY2019-end

FY2020-end

FY2021-end FY2024-end target

39,000Develop internal
human capital

Recruit fromoutsideM&A

Promoting Job-based HR Management
Objective

Foster human capital and organizational and cultural independence,
become a global leader in the Social Innovation Business

Organizational and individual growth ・Maximize performance ・Increase engagement

Visualizing work duties
・Required work
・Necessary skills
・Training programs
Company-specified

Two-way communication
between the company and individuals,
daily execution of work duties,
skills development

Equal partners with work as the key

Individuals

Place the right people in the right place in accordance with individual motivation andcapabilities regardless of age and other attributes
Company

In order to achieve global business growth, each employee must grow. In response to changes in the businessenvironment, Hitachi’s business direction, social issues in Japan and changes among individual employees, Hitachi ispromoting job-based human capital management to support business growth. Specifically, we will promote awarenessand behavioral changes by visualizing work duties and human capital, strengthening upskilling and reskilling education,
recruiting and assigning work with clear job descriptions and maximizing individual performance, which will lead to growththroughout the entire organization.
Most recently, we are promoting measures that include revitalizing internal employment opportunities using the group’s
open recruiting system, strengthening support for managers through training that enhances manager capabilities,
providing support for upskilling and reskilling in line with career goals, and introducing a learning experience platform.
Through these efforts, we aim to become a global leader in the Social Innovation Business by targeting individual andorganizational growth, thereby fostering independence among Hitachi’s human capital, organization and corporate culture.

Visualizing human capital・Desirable work
・Skills possessed
・Career plans

Individual employee-specified

Hitachi Integrated Report 2022

CEO Message

Introduction

Whatʼs Hitachi

The Story of Collaborative Value Creation with Stakeholders

Value Creation

Materiality

Business Strategies

The Value Creation Process

Sustainability

Mid-term Management Plan 2024

Corporate Governance
Human Resources Strategies

Data

43

Financial Strategies

CFO Message

Enhancing Employee Engagement
Employee wellbeing is a necessary condition for increasing productivity, as well as a management
issue. Creating comfortable work environments and workplaces where all employees canproactively engage in work and achieve results is the source of Hitachi’s sustainable growth.
To this end, enhancing employee engagement is critical. Diverse human capital working withhigh engagement across countries, regions and companies is essential for maximizing humancapital and organizational performance. Each year, we conduct Hitachi Insights, a global
employee survey aimed at ascertaining employee understanding of Company strategies andmeasures, job satisfaction, and desire to autonomously engage in efforts to achieve results.
Through this process, in addition to employee engagement, we quantify understanding ofmanagement policies, operational reforms, DEI, career development opportunities, health andsafety, and growth motivation, and work to improve them.
Hitachi Insights results are shared by executives and managers at each workplace with othermembers of their organization, leading to specific improvement measures and the formulationof a PDCA cycle that creates rewarding workplaces. This facilitates the prioritization of humancapital–related measures throughout Hitachi, workstyle reviews in each workplace, andproductivity improvements.
Since this survey was introduced in 2013, scores have improved over the medium term. In
fiscal 2021, Hitachi Insights was conducted in 14 languages for approximately 240,000 people
worldwide, with a participation rate of 86%. The employee engagement index was 65% in fiscal
2021, and we aim to raise this to 68% in fiscal 2024.
By conducting this survey annually, we can evaluate and review initiatives, as well as measureeffects directly linked to work and workplace improvements. In promoting a growth-oriented
mindset among all employees (continuous and independent skills development, including
upskilling and reskilling), we will accelerate innovations and transformations embodying Hitachi’sfounding spirit to inculcate Hitachi’s corporate culture on a global scale.

Cultivating the Next Generation of Management Leadership
The rapid selection and development of management leader candidates is one of Hitachi’s mostimportant management issues. Thus, Hitachi is focused on the development of young leader
candidates referred to as the Future 50.
Each year, 500 high-performing Hitachi employees around the world who have driven changes
and innovation leading to noteworthy results are nominated for intensive development, with only
50 selected as members of the Future 50. Members from all over the world gather to discuss
what is required for Hitachi Group growth. In making recommendations to management, theyacquire the capabilities of next-generation leaders who can practice “I will” mindset and takeresolute actions. Further, through participation in unconventional tough assignments* andinternal and external training sessions, Future 50 members broaden their horizons and expand
their perspectives beyond the responsibilities of the business areas in which they are engaged.
The Nominating Committee also holds discussions and individual interviews with incoming andsubsequent CEO candidates to proactively develop the next generation of managers. Hitachi’s
management, including the Board of Directors, has strengthened its ability to respond toincreasingly complex global social issues through diversity regardless of gender and nationality,
as well as through a strict approach to the governance of various issues. Inculcating this change
in management awareness among young leader candidates will lead to the global recruitmentof truly talented human capital without reliance on age, gender or nationality, deepening andbroadening the pool of next-generation leaders throughout Hitachi.
*Work duties with a relatively high degree of difficulty

Selection and Development of Management Leaders (pipeline construction)
Nominating Committee
Development
and evaluation

Discussions

Incoming and subsequent CEO candidates
Select candidates for incoming and subsequent CEO successors
from the talent pool of change leaders and reformers demonstrating
noteworthy achievements

Management leader candidates (talent pool)
Human capital driving change and innovations, achieving noteworthy
results (approximately 500 people)

Future 50 Outstanding young employees (approximately 50 people)
Conducts discussions and individual interviews with incoming and subsequent CEO

Nominating Committee candidates, participating in focused, medium-range development

Execution side

Selects and develops global management leader candidates(1) Discussions conducted at 30 Talent Committee meetings each year (compositionchanges annually)(2) Selection of approximately 500 employees developed mainly through stretch assignments(includes non-Japanese and female employees)

Selects talented young people as members of the Future 50 and provides intensive training
Execution side +Allocates tough assignments, facilitates one-on-one sessions with the CEO and organizes
Nominating Committee lectures by Nominating Committee members, among other efforts

Hitachi Integrated Report 2022

CEO Message

Introduction

Whatʼs Hitachi

The Story of Collaborative Value Creation with Stakeholders

Materiality

Value Creation

Business Strategies

The Value Creation Process

Cultivating Global Hitachi Culture
Of the approximately 370,000 Hitachi Group employees in Japan and overseas (as of the end of fiscal
2021), more than 100,000 (about 30%) have joined the group over the past three years. While diverse
human resources are the driving force behind corporate growth and innovation, there is also a needto repeatedly share the Hitachi Group Mission and Values to inculcate common understanding andbehaviors.
As this is the inaugural fiscal year of the Mid-term Changes in consolidated employee numbers
Management Plan 2024, we are also making efforts to
Reduced personnel
due to transfer of businessfacilitate understanding through online meetings for group FY2018295,941
end
peopleand global executives conducted by President and CEO
Kojima and videos distributed to all employees. Town
Increase by 100,000 people via M&A
hall meetings are held with all business unit and division368,247
managers to explain the Mid-term Management Plan 2024 FY2021peopleend
and divisional polices to all employees while reaffirming
Hitachi’s Mission and Values.
0
250,000 300,000 350,000 400,000
With the addition of new talent in the group, it is important
to develop a human capital management system and inculcate Hitachi’s corporate culture. To thisend, it is essential that we deploy and utilize the global HR foundation Hitachi has been working on
to strengthen internal communication among group companies, disseminating and sharing consistentmessaging throughout the Hitachi Group. It is also important to implement cultural inclusion measurestargeting employees who recently joined the group through M&A by respecting each company’s uniqueculture and sharing and incorporating the necessary cultural features and elements for future growth. In
the Mid-term Management Plan 2024, we will consolidate PMI knowledge accumulated through past
M&A and other efforts in the Center of Excellence (CoE) established at our Corporate Division, creatinga system that can be utilized for new projects.

Sustainability

Mid-term Management Plan 2024

Data

44

Financial Strategies

CFO Message

Corporate Governance
Human Resources Strategies

Initiatives and Results Associated with GlobalLogic PMI
Steady efforts are already bearing fruit. For example, at the Make a Difference!
idea contest held to promote our corporate culture, the Success Paths concept
proposed by GlobalLogic, which joined the Hitachi Group in July 2021, waspresented with the Gold Ticket* award for fiscal 2021. Make a Difference! is anidea contest launched in fiscal 2015 as a means of reforming the “I will” mindset
aimed at new business and internal reforms. The Success Paths proposed
by GlobalLogic focus on Hitachi employee engagement, utilizing an app that
addresses individual careers as well as social activities (hobbies, volunteering,
personal development and other pursuits). These efforts were recognized as aunique method for guiding employees down the path to success.
*Conferred to outstanding projects demonstrating high feasibility

Lumada Business Award Jointly Awarded to Hitachi Energy, Hitachi Vantara and GlobalLogic
The One Hitachi Acceleration for Green Digital Program powered by Lumada
jointly proposed by GlobalLogic, Hitachi Vantara and the ABB power grids
business (now Hitachi Energy), which became part of the Hitachi Group in July
2020, won the fiscal 2021 Lumada Business Award (Grand Prize), demonstratingthat Hitachi’s PMI is functioning effectively. These three companies provide
services, including stabilized power distribution and the sale of surplus power tolocal users, to power transmission and distribution companies that utilize Battery
Energy Storage Systems (BESS). This award was conferred in recognitionof Hitachi’s contributions to resolving issues faced by social infrastructure
maintenance operators, including reliability modeling and equipment inspection
solutions based on diagnostic imaging. In terms of cultural inclusion, while
respecting the unique culture of each company that has become part of the
Hitachi Group through M&A and other efforts, it is critical to foster global Hitachi
culture by mutually sharing and incorporating cultural characteristics andelements necessary for future growth.