ESG Information[Human Capital-related Initiatives]

Putting “People Are Our
Greatest Asset” into PracticeKen Ishizaki
General Manager,
Administration Headquarters
Personnel Department

Our Basic Concept on Human Resources andInitiatives to Develop Human Resources
The Kaga Electronics Group’s approach to human resources
can be summarized into a single sentence, “People are ourgreatest asset.” In line with this approach, we have worked tonurture independent, autonomous, and self-motivated individuals with a strong spirit. In the course of human resource
management, we remain mindful of what can be done to maximize the value of our human resources and bring out their fullpotential while encouraging them to exercise their uniquestrengths as Kaga Electronics Group employees.
At the core of our training system are in-house position level
qualification systems and training programs that differ basedon employees’ years of service. The former grants membershipto each employee upon joining the Group and, as they accumulate experience, promotes them to leader, chief, manager,general manager and, ultimately, senior general manager.
These titles, however, are irrespective of their job functions.
For example, an individual at the “leader” rank could beappointed to a manager position if deemed to possess management skills. Likewise, a general manager can be appointed
from among individuals who have only reached the “manager”
level. As such, our in-house position level qualification is designed
to be flexible, imposing minimal limitations so that competent
individuals can be rapidly promoted to higher positions.
Meanwhile, our training programs that differ based on
employees’ years of service require employees to undergo
annual training until the end of their fourth year within theGroup. Usually, those in their fifth or sixth year would havereached the “leader” level and would then begin participating inleadership training via the position level-based training programs.
Accordingly, the pace of promotion begins to vary by individual.
The three job categories are sales, engineering and administrative staff. From the viewpoint of overall proportion ofemployees within each category, sales staff account for a substantial majority with administrative staff constituting our37

KAGA ELECTRONICS CO.,LTD.

workforce’s second largest group. The number of engineering
staff is small.
Recently launched human resource development initiatives
include sales training for younger employees, in addition tosales capability enhancement (strategic thinking) training, inwhich employees better hone their sales capabilities by learning
side by side with managers. Previously, on-the-job (OJT) training
was the main skill development method implemented at KAGAELECTRONICS as this approach can be closely aligned withwhat occurs at the front lines of business and yield immediateeffects. However, we have since realized that proficiency level
could vary by individual based on the staffing situation of eachbusiness unit to which new recruits are assigned. This was
ultimately the reason behind the launch of new training
programs. We believed basic concepts and methods for humanresource development should be unified. Furthermore, while
the overall resignation rate remains low at slightly in excess of2%, we must provide new recruits with robust training in order
to curb the resignation of employees in their second and thirdyears of joining the workforce.
Sales capability enhancement (strategic thinking) training
brings together younger employees and managers frommultiple sales departments and encourages them to interact,
learn from each other and inspire one another to enhancetheir strategic thinking skills while they collectively study thatwill be put to use in their sales activities. While this may not
immediately turn new recruits into fully equipped salespersons, we aim to equip employees with 70% to 80% of thenecessary skills at a very early stage of their careers, with thehope of mitigating the risk of resignation.
Moreover, an issue associated with the low frequency of personnel transfer has come to our attention. Therefore, between
2021 and 2022, we implemented the Strategic HumanResource Management Project. As we also aim to enable
employees to gain robust experience at early stages, we havemade it a rule to proactively undertake transfers, including
those between business divisions and Group companies.

Looking ahead, we will leverage the database accumulated in
the course of the above project regarding our human resources,
including those at Group companies, to inform our future
measures to develop top management candidates.
To date, we have rarely recruited mid-career hires. However,this traditional policy has now been changed due in part to theexpansion of the size of our operations. While we have previously
employed a handful of mid-career hires specialized in fields
such as accounting and engineering, we have begun toproactively recruit a growing scope of individuals from externalsources, including salespersons.
Traditionally, recruiting mid-career employees has been
seen as involving the risk of hiring individuals with an approachthat is incompatible with KAGA-ism, especially in terms ofsales activities. However, KAGA ELECTRONICS itself has
undergone changes in many respects, with KAGA-ism being
updated to align with the times. Accordingly, we feel that thisno longer discourages the recruitment of mid-career hires.

Nurturing Global Human Resources Based on theEMS Business, Which Is Expanding Overseas
With regard to the development of global human resources,
the EMS Business Division serves as a hub from which
employees are dispatched to overseas assignments.
Specifically, we first assign salespersons who joined the Group
as mid-career hires to the EMS Business Division and thendispatch them to overseas destinations after amassing frontline experience for two to three years. Meanwhile, KAGAMICRO SOLUTION, a manufacturing subsidiary, recruits
mid-career hires specialized in manufacturing and thenseconds them to the Production Center of the EMS Business
Division after they gain proficiency. Following this secondment,
they are transferred to overseas bases. Going forward, we aimto nurture human resources capable of handling overseas production management. To this end, we plan to promote suchinitiatives as assigning new recruits to KAGA EMS TOWADA
CO., LTD., and then sending them to countries abroad after astint at domestic factories, including those run by Kyokuto
Electric Co., Ltd.
To leverage the capabilities of foreign national employees,
KAGA EMS TOWADA CO., LTD. annually accepts technicaltrainees from Indonesia and Vietnam, leveraging agovernment-sponsored foreign technical intern training

program. These trainees are given the option of either returning
to their home countries after a three-year training period orcontinuing their career at KAGA EMS TOWADA CO., LTD.
Meanwhile, Kyokuto Electric Co., Ltd. accommodates humanresources from its subsidiary in Thailand, providing its ownin-house training.

Initiatives to Promote Diversity & Inclusion
In terms of women’s empowerment, our Medium- toLong-Term Sustainability Management Plan includes thespecific target of increasing the consolidated ratio of women in
managerial positions to 15% by 2024 and 17% by 2029.
Currently, we have made steady progress toward this target.
However, when looking at KAGA ELECTRONICS on a
non-consolidated basis, along with its domestic Groupcompanies, this ratio is not steadily growing. With this in mind,
we have formulated targets aligned with the situation of eachGroup company. Furthermore, we are assiduously promoting
initiatives to raise the ratio of women as newly hired career
track employees to 30%. We recognize a need to focus on thenurturing of our female employees at a robust pace at KAGAELECTRONICS and other domestic companies.
With regard to the promotion of foreign national employees,
Mr. Zhen Zhou Zhu, our China Supervisor, was appointed as thefirst foreign national executive officer of KAGA ELECTRONICS.
As for the empowerment of older employees, although theretirement age of 60 years old remains unchanged, weconsider reaching this age to be yet another milestone ofemployee career development. We intend to provide older
employees with duties that allow them to leverage theirexperience and offers them fair wages. By doing so, we hope
our employees will remain highly spirited and serve as key
workforce members in an ever-broader range of businessfields even after reaching the age of retirement.
We also believe that “a company never thrives unless its
employees are healthy,” Based on this, we have undertaken avariety of initiatives focused on promoting employee health. In
recognition of these efforts, in March 2023, KAGAELECTRONICS was selected as an outstanding organization
under the Certified Health & Productivity Management
Organization Recognition Program. In addition, our pursuit ofhealth and productivity management has allowed us to gather
the health-related data of employees, which, in turn, led to theclarification of issues that should be addressed to promote
employee health.

Remaining an Organization in Which High
Motivation is Standard
When it comes to wages for our employees, our underlying
approach is to equally distribute what we have earned. Overpast several years, we have provided special bonuses at theend of each fiscal-year, as well as granting biannual bonusesin summer and winter. In this way, we have helped employees
maintain stable livelihoods even amid progressing inflation.
Thanks to these and other initiatives, we placed 27th in aranking of listed companies that substantially increased wages
for employees based on a survey conducted by Nikkei
Newspaper. Our stance has always been to return our profit toour employees in times of strong operating results. This, inturn, results in high levels of motivation among employees.
To maintain such a high level of employee motivation, we will
engage in in-depth communication with employees and further
improve their engagement with the Company.

Integrated Report 2023

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