Human Resources
Basic Philosophy

Smile Work Guideline (Workplace Environment and Human Resource Development)

https://www.sanki.co.jp/en/csr/social/smile-project/
Multi-Stakeholder Policy

Sanki Engineering Group Human Rights Policy

https://www.sanki.co.jp/en/csr/social/human-rights/

https://www.sanki.co.jp/en/csr/governance/multistakeholder/

Sanki Engineering’s Human Resource Strategy andManagement System⨋ Human Capital Strategy• Improving Company Environment
We endeavor to create a working environment and a corporate culture in which all
employees grow with the Company, respect individuality and are able to succeed
and thrive. We support employee work-life balance and manage business with due
consideration for employee well-being. We also seek to raise employee engagement
by emphasizing communication with them.
⨋ Structure and New Personnel System

As one of the key measures for becoming the “Company of Choice” under the MediumTerm Management Plan “Century 2025” Phase 3, we launched a new personnel system
to improve employee comfort and satisfaction in April 2022.
The launch involved defining and streamlining the organization. We significantly
cut back the number of line managers and clarified their responsibilities so they could
better concentrate on their managerial tasks, and then we revised our compensation
system to reward employees for high performance in their own fields of specialization,
which in turn enabled us to place the right people in the right jobs. We plan to conduct
interviews in all branches and branch offices in fiscal 2023 to verify the effects of therevision, and we increased wages in fiscal 2022 by 4.6% (compared to fiscal 2021) toimprove employee working conditions.

•U tilize DX to balance improvements
in quality and productivity with
reduced working hours• Secure and nurture human resources
with due consideration for diversity

Indicators and Targets for Human
Resource Development
Scope: Non-consolidated•A ctive promotion of younger employees
Indicator

Target (April 2026)
Actual values as of April 2023
in Parentheses

Average ageof those inmanagerial
positionsManagers:
45.8 years old (46.4 years old)
General managers:
50.2 years old (51.8 years old)
Executive managers:
53.5 years old (54.1 years old)

Human Rights / Human Resources• Developing Human Resources
We believe that the Company’s growth is driven by the various employee viewpoints
and values that reflect the rich variety of their experiences, qualifications, and attributes.
We therefore promote diversity in our workplace, properly evaluate the skills of eachindividual employee, and provide suitable education and training. We also strive toensure the diversity of core personnel as well as equal opportunities for promotion to
managerial positions.

•R eform of the personnel systemcentered on the active appointmentof young people and extension of
the retirement age

SocialIn the context of Phase 3 actions with new indicators and targets based on the Human
Resource Development Policy and Company Environment Improvement Policy, we areaccelerating work style reforms and securing, nurturing, and allocating diverse humanresources in line with our business strategy. Moreover, as stipulated in Multi-Stakeholder
Policy, we are committed to human capital investment and sustainably giving back tothem.

Measure for Phase 3:
Accelerate Work Style Reforms•C ontinuation of the Smile Project,
led by top management

Foundation of Sustainability Management

Recognizing that human capital is the most important management resource for a company’s existence and stable growth, we believethat securing and developing human resources is critical and spare no expense to invest in our personnel as the Company’s future. Withthe “pursuit of happiness for colleagues” identified as one of our material issues and under the management philosophy of “placing
significance on communication and mutual respect,” we endeavor to create workplace programs and environments in which all
employees grow with the Company, respect individuality, and are able to succeed and thrive.

• A cceleration of diversity
Indicator

Target (April 2026)
Actual results for April 2023*1
in Parentheses

Ratio ofwomen inmanagerial
positions

16.4% (15.5%)

Ratio ofnon-Japaneseemployees

3.0% (2.5%)

Ratio offemaleemployees

1.7% (1.2%)

Indicators and Targets for Company
Environment Improvement
Scope: Non-consolidated
Indicator

Targets (FY2025) Results for
FY2022 in Parentheses

Employeesatisfaction
surveyMaintaining the ratio of
respondents who wantto keep working for theGroup at 90% or more*2

Rate ofMale: 50% (10.7%*3 )childcare leave Female: 100% (100%)taken*1 Aggregated on a different date from that for the
Employee Data on page 70.
*2 Not conducted in FY2022. The FY2021 response
rate was 91.6%.
*3 44.6% of the Company’s own leave programs.

SANKI REPORT 2023

65︱

SocialFoundation of Sustainability Management ︱Human Resources

Ensuring Diversity in Human Resources and Promoting Careers⨋ R especting Diversity in Employment and Recruiting High-Level Human

Resources⨋ S ecuring Human Resources through the Return to Career Program

All workers

60.8

61.0

Regular workers*2

59.8

60.7

Part-time/fixed-term workers

51.8

50.9

⨋ C areer Change System

In 2019, we established new career types, namely the career-track position andoperational position, and introduced a system that allows employees to switch
between these career paths. Job relocation is excluded from the requirements for the
career-track position, and the system is designed to enable a wider range of employees
to thrive. In fiscal 2022 , four employees changed their career type for a work style that
better suits their particular stage in life.
⨋ Creating Workplaces for Persons with Disabilities

We continue to hire persons with disabilities and are working to create an environment
in which they can work comfortably over long periods. As of June 2022, theemployment ratios of persons with disabilities were 2.24% and 1.51% on a nonconsolidated and consolidated basis, respectively. As of June 2023, the employment
ratio of persons with disabilities was 2.28% on a non-consolidated basis. In recruiting,
we expanded our channels and at the same time matched applicants with eachdepartment and provided care upon acceptance.
⨋ Extension of Retirement Age and Post-Retirement Reemployment System

We have extended the retirement age to 65 as of April 2022. In conjunction with
the introduction of an optional retirement age system, employees will receive full66

SANKI REPORT 2023

Goals

Results in
FY2022*3

1. I ncrease the average
length of service forwomen by 10% ormore from April 2021

14.3 years(5.9% increase)

2. R aise the ratio of
women in managerial
positions*4 to theconstruction industry
average of 3%

2.5 %(1.6 percentage
point increase)

Our personnel system ensures equal opportunity as well as fair evaluation and treatment for
all employees while supporting employee initiatives for self-directed career development.
Individual interviews and a mentor system are introduced for younger employees.
Once a year, all employees fill in a Career Development Sheet and receive feedback
through an interview with their supervisors. To collect their opinions, we have anothersystem that allows employees to bypass their superiors and speak directly with the
Human Resources Department depending on the content of the sheet. Moreover, wehave several employee award programs, including the president’s commendation forboosting our technological capabilities and raising employee motivation, such as theBest Employee Award, Yano Technology Prize, and Award for Construction Method/
Operation Improvement, as well as other programs including long service awards (25and 50 years).

We maintain training systems associated with each career path, such as management
training, technical training, and training by field of expertise, in order to strengthen
specialized, technical, and management skills. We take advantage of the Sanki Technology
Center to conduct various training programs.

• Problem-solving seminars and opinion
exchange sessions for employees whoare hearing impaired• M anagement training to promote
understanding among managers• I nstalling lamps in all offices thatbear evacuation instructions forhearing-impaired employees in theevent of a disaster• Providing closed captioned
presentations during Web-based
training and financial results briefings

Mid-Career Employees

New employee training
Management Training• M entor system

Smile Work Guideline (Human
Resource Development
Guideline)

https://www.sanki.co.jp/en/csr/social/smile-project/

Awarding long years of service (25th year)

Executives

Leadership position training

Second-year training

Management candidate
training

Fourth-year training

Section chief training

Seventh-year training

Department manager training

New employee training
Qualification training

Safety Training

Safety experiential training
Corporate ethics training

Corporate Ethics Training

Mid-career staff training
Qualification training
Technical experiential training％

Improvement of Workplace
Environment• I ndividual interviews by
personnel managers in the thirdand fifth year of service▍Training Systems

Employment rate of persons with disabilities(non-consolidated) as of June 1, 2023

2.28

Governance⨋ E ducation and Training Systems

Younger Employees*1 Calculated in accordance with a provision
stipulated in the Act on the Promotion of
Women’s Active Engagement in Professional Life.
*2 Includes operational positions.
*3 A s of April 1, 2023. In the parentheses arechanges from April 1, 2021.
*4 A
 ggregated on a different date from that of thenumber of managers referred to on page 70.

SocialHuman Resources

Gender wage
gap

（%）

Consolidated

Action Plan Based on the Act ofPromotion of Women’s Participation
and Advancement in the Workplace
Plan period: April 1, 2021 toMarch 31, 2026
Scope: Non-consolidated

Environment

Personnel Systems Designed forYounger Employees⨋ Personnel System for Workplaces Where People Can Grow

https://positive-ryouritsu.mhlw.go.jp/(Japanese only)G

retirement benefits from age 60 to 65, even if they retire at their own request. In
addition to improving the treatment of those about to retire, we are doing the same forthose who are rehired under the reemployment system. Employees may also choose
to be reemployed between the ages of 60 and 65. In fiscal 2022, we reemployed 172
retired employees on a consolidated basis.

Developing and Evaluating Human Resources

Website on the Promotion of
Women’s Active Engagement inProfessional Life and Support for theirWork-Life Balance (Ministry of Health,Labour and Welfare of Japan)

S

Social⨋ P romoting Women’s Careers

We formulated an action plan based on the Act of Promotion of Women’s Participation andAdvancement in the Workplace to create an environment in which our female employees
can continuously develop their careers and have since implemented related measures. Our
wages and promotion opportunities to managerial positions are solely based on employeecompetence or performance as fairly evaluated free from gender-based discrimination.
Non-consolidated

128 people from 9 countries(male: 101, female: 27)

Employees of Thai Sanki Engineering

To increase the diversity our working environment and more flexibly accommodate careerdevelopment, we changed part of our Return to Job program and renamed it as Return
to Career. The revised program, launched in October 2022, allows voluntarily retired
employees to return to work and significantly relaxes other restrictions.

▍Gender Wage Gap (FY2022)*1

The U.K., Thailand, Vietnam,
Peru, Russia, South Korea, China,
Austria, and Malaysia

E

Foundation of Sustainability Management

We seek to bring on board human resources that differ in gender and nationality as
well as in talent and personality. Staff from the sales, design, technology, and otherdivisions join the Human Resources Department to ensure fairness based on multiple
perspectives. Hiring criteria for fiscal 2022 were based on findings from interviews with thepresident, officers in charge, and the managers of direct departments to continuously andproactively hire people from a wide variety of backgrounds.
As of the end of March 2023, there were 184 mid-career hires in managerial positions (on aconsolidated basis). In fiscal 2022, we introduced an exclusive hire contract system for R&D andother jobs requiring high-level expertise to secure correspondingly high-level human resources.

Number of Non-Japanese Employees(as of March 31, 2023) (Consolidated)

Facilities
Construction
Technical Training︱

New employee
training
Third-year construction
work training
Sixth-year construction
work training
Ninth-year construction
work training
Qualification training

Plants & Machinery
Systems

New employee training
Inspector education
Training on our products and systems
ISO 9001/ISO 14001

Quality & Environment
System Training

New employee training
Mid-career staff training

Education to developinternal auditors

Average education and training
costs per employee in FY2022(consolidated)

55,000yen/year

SANKI REPORT 2023

67

︱Foundation of Sustainability Management ︱Social︱Human Resources

Employee Engagement⨋ Q uestionnaire on the Working Environment and Individual

Interviews

Results of a Questionnaire Survey
on the Working Environment
Survey period: 2021
Participants: all Group employees
Q Do you think that the SankiEngineering Group’s business iscontributing to society?
Yes

98.6%

⨋ P romoting Work-Life Balance⨋ Century Communication Up Discussion Events

Since fiscal 2016, we have been holding Century Communication Up (CCU) discussion
events in accordance with the Century 2025 long-term vision. Opinions and proposals
obtained through the CCU have been applied to improving our operations andsystems. In April 2022, we organized a new employee CCU to provide an opportunity
for face-to-face dialogue between new employees and executive officers.
⨋ S ound Employer-Employee Relationships

Sanki Engineering launched the Company-wide Smile Project, led by the president, in
fiscal 2015 to promote work style reform. We have been implementing initiatives acrossthe Company to create a better working environment. In fiscal 2017, we set up the Smile
Site Plan, a committee dedicated to construction sites. In addition, we worked on efforts
to lessen the operational load of construction managers and enhance capabilities andquality at our construction sites. In fiscal 2020, we launched the Smile Plan, consistingof four subcommittees, to establish a system that enables all departments to work
together as one. Moreover, under the Medium-Term Management Plan “Century 2025”
Phase 3, a KPI is set up to eliminate overtime work exceeding the limit stipulated in
the revised Labor Standards Act. As a result of these efforts, we were rated 3 on a scaleof 5 stars in the 6th NIKKEI Smart Work Management Survey, which selects advanced
companies that challenge the productivity revolution through work style reform.

68

SANKI REPORT 2023

GovernanceStretching class at Sanki Techno Center

FY2022 rate of paid leave taken(consolidated)

61.6
27.4

％

Average monthly overtime work
per person (consolidated)

hours

Childcare by the City of Nagoya
New employee CCU with executive officers

In 2015, Sanki Engineering was granted an update for the Kurumin mark, a certificate grantedby the Tokyo Labor Bureau of the Ministry of Health, Labour and Welfare and based on the
Act on Advancement of Measures to Support Raising Next-Generation Children, for meetingcertain criteria as a company supporting childcare. In 2014, the Chubu Branch became thefirst construction equipment company to be recognized by the City of Nagoya as a company
supporting childcare, and the certification was updated in 2017.

The Kurumin markfor support ofraising nextgeneration children

City of Nagoya
certification
for companies
supporting childcare▍Major Programs Supporting Work-Life Balance (Non-consolidated) (as of April 2023)
Certified as 3 stars in the NIKKEI Smart WorkManagement Survey

Area• R aise efficiency by introducing acloud-based accounting system

P. 56
Initiatives for Ensuring Quality at
Construction Sites

Work

Half day/hourly off

Paid leave for half a day or by the hour.

Anniversary leave

A planned paid leave on special dates for employees or their families, requested at the start of the fiscal year.

Sanki Smile Day

The Company’s own Premium Friday, a scheme based on that launched by the Japanese government. Employees areencouraged to take a full or half day of paid leave on monthly payday and avoid overtime.

Reserved leave

The use of reserved days off for childcare, nursing, or volunteer activities.

Telecommuting and teleworksystemAims to improve operational efficiency and business continuity during childcare and nursing care or in the event ofemergencies such as natural disasters and pandemics.

Sliding work hours

Employees can slide the start and end times forward or back for business or non-business reasons insofar as this does notinterfere with their work.

Return to Career program

Employees who have left the Company for unavoidable reasons can apply for reinstatement.

Childcare leave

Can be obtained for the requested period of time up to when the child turns one year old.

Nursing leave

Can be obtained five times for up to 180 days per person on nursing leave.

ChildcareandShortened work hours
nursing
care
Support for childcare leave and
Health & Productivity Management
Organization 2023

Details
Five consecutive days of leave for each five- year period of employment using employee’s reserved leave.

Consecutive leave for construction Three consecutive days of leave after staying at a construction site for more than six months or before moving tomanagers
another site.

• Clarify work responsibilities byreviewing the personnel system• Follow up with employees who work
long hours based on stress check
results

ProgramRefresh leave

Major Initiatives of the Smile Project⨋ M easures on Health and Productivity Management

Understanding that reducing long hours of work is a primary consideration for
managing employee health and productivity, we engage in activities for maintaining
and improving employee well-being in tandem with other work style reforms. Apartfrom measures for reducing workloads and raising productivity, we carry out healthimprovement activities, conduct periodic stress checkups and identify the sources ofSocial⨋ Acquiring the Kurumin Mark and Recognition for Supporting

Promoting Work Style Reform⨋ P romoting the Smile Project

Environment

Human Resources

We consider labor-management dialogues as a key channel to invest in humanresources and continuously improve employee treatment. The Human Resources
Department and employees union at Sanki Engineering meet monthly to discuss
improvements in the working environment and operation of Company systems.
Also, we provide the employees union with opportunities to present their proposals
or requests to management and have been implementing measures based on the
dialogues. For instance, we held labor-management exchanges in order to discuss anddetermine the fiscal 2022 wage increases.

G

SocialWe have been augmenting our programs in response to employee requests forbroad support of a healthy balance of work and personal life so both male and female
employees can continue to work with a sense of security while attending to various life
events. In addition, we are promoting improvement of the environment that enables
flexible work styles by reviewing our work and leave programs.
In fiscal 2022, we reviewed our Return to Job program and also conducted an
online seminar and individual consultation on nursing care for employees across Japan.
Furthermore, we introduced a new rule to expand the options of our postpartum
paternity leave in response to revisions to the Act on Childcare Leave and Caregiver
Leave, thereby allowing employees on paternity leave to work for a certain period oftime even during the leave at their request.

S

Foundation of Sustainability Management

We gather opinions from employees about their workplace through a periodic
questionnaire along with another questionnaire conducted by employees union, andwe refer to their comments while creating a better working environment.
In fiscal 2022, prior to the launch of the revised personnel system, the Human
Resources Department conducted individual face-to-face interviews with generalmanagers and managers, seeking their opinions about the personnel system. We
continue to maintain direct dialogue with employees to deepen mutual understanding
and use their feedback to design personnel systems and training programs.

stress through third-party assessment, provide employees with industrial physician
advice for improving their life-style habits, and implement health-related campaigns
using a pedometer app as well as other projects. Moreover, a 24-hour toll-free healthconsultation service is in place to offer advice on health, medical, nursing, and childcare
issues for employees and their families. The service was set up outside the Company,
and caller privacy is strictly protected.
We have been certified as a Health & Productivity Organization 2023 (Large
Enterprise Category) in recognition of those efforts, by the Ministry of Economy, Tradeand Industry and Nippon Kenko Kaigi.

E

Employees caring for children or other family members can apply for shortened or sliding work hours. In the case ofchildcare, the program applies to children up to the third grade of elementary school.

reinstatement

An interview is held with the supervisor before and after applying for childcare leave.

Special childcare/nursing leave

Can be obtained multiple times and up to 20 days in total for childcare and nursing care.

Postpartum paternity leave

Those on paternity leave can work during the leave only if they have requested to do so and with Company permission.

SANKI REPORT 2023

69

︱

︱ Social
人財Foundation of Sustainability Management ︱

E

S

G

Environment

SocialGovernance▍Number of Employees on Leave and Work Hours

Consolidated
Childcare leave*1
Nonconsolidated
Consolidated
Rate of childcare
Nonleave taken*1 (%)
consolidated
Consolidated
Reinstatement after
Nonchildcare leave (%)
consolidated
Consolidated
Nursing leaveNon(people)
consolidated
Consolidated
Rate of paid leave
Nontaken (%)
consolidated
Consolidated
Average monthly
overtime work*2
Non(hours per person)
consolidated

FY2018FY2019FY2020

FY2021

Male Female Total

Male Female Total

Male Female Total

Male Female Total

7

11

18

9

27

36

7

9

–

–

16

7

24

–

–

–

FY2022
Male

Female103242

7 (26)

34

9

30

39

–

–

–

–

7

33

40

31

7

27

–

–

–

Total

13

20 (39)6 (25)

12

18 (37)

43.3

100.0

53.4

–

–

–

–

–

–

–

–

–

–

–

–

44.6

100.0

54.4

100.0

88.9

93.8

100

96.3

97.2

100.0

100.0

100.0

100

93.8

95.2

100.0

100.0

100.0

100.0

88.9

93.8

100

100

100

100.0

100.0

100.0

100

100

100

100.0

100.0

100.0

1

0

1

1

1

2

0

0

0

0

0

0

1

0

1

0

0

0

0

0

0

0

0

0

0

0

0

1

0

1

54.0

76.1

57.1

54.3

76.3

57.4

53.4

67.1

55.3

53.2

69.7

55.6

58.8

77.9

61.6

53.0

74.2

55.9

51.9

74.4

55.1

52.5

65.8

54.5

52.4

69.5

55.0

58.2

77.9

61.4

–

–

–

37.4

14.7

34.3

31.7

12.3

29.0

31.7

11.8

29.6

30.0

12.4

27.4

35.0

14.7

32.0

34.5

13.6

31.3

33.0

13.3

29.9

33.0

12.8

29.7

31.6

13.7

28.8

▍Employee Data (as of March 31 of Each Fiscal Year)
FY2018FY2019FY2020

FY2021

Male Female Total

Male Female Total

Male Female Total

Male Female Total

Male

FY2022
Female

Total

2,072

322

2,394

2,152

349

2,501

2,190

358

2,548

2,226

381

2,607

2,244

383

2,627

1,694

273

1,967

1,705

287

1,992

1,740

308

2,048

1,770

326

2,096

1,753

320

2,073

–

–

–

–

–

–

91

22

113

84

25

109

101

27

128

–

–

–

–

–

–

17

6

23

19

5

24

20

5

25

Employees

Consolidated
Nonconsolidated
Consolidated
Nonconsolidated
Consolidated
Nonconsolidated
Consolidated
Nonconsolidated
Consolidated
Nonconsolidated

Number of
employees
Number of
non-Japaneseemployees
Number ofmanagers*3
Average age*2
Average years ofservice*2

630

7

637

676

9

685

683

11

694

672

13

685

687

18

705

556

5

561

556

5

561

567

7

574

567

9

576

580

14

594

44.5

38.2

43.7

44.7

38.3

43.8

44.7

38.8

43.8

44.7

39.0

43.9

43.8

39.2

43.1

43.9

37.1

43.0

44.1

37.6

43.2

44.2

38.0

43.2

44.2

38.2

43.2

43.0

38.3

42.3

17.3

13.0

16.7

17.3

12.9

16.7

17.5

13.2

16.9

17.6

13.3

17.0

16.7

13.6

16.2

19.0

13.9

18.3

19.3

14.1

18.5

19.4

14.0

18.6

19.5

14.2

18.6

18.5

14.7

17.9

Employment

Consolidated
Nonconsolidated
Consolidated
Nonconsolidated
Consolidated
Nonconsolidated
Consolidated
Nonconsolidated
Consolidated
Nonconsolidated

Number of new
recruits
Number of
mid-career hires
Number of rehired
employees after
retirement
Rate of persons
with disabilities*4(%)
Turnover rate
due to personalreasons*5 (%)

–

–

–

70

15

85

73

18

91

79

20

99

82

6

88

71

9

80

67

15

82

70

18

88

76

19

95

78

5

83

–

–

–

32

13

45

26

13

39

25

12

37

30

3

33

4

2

6

7

8

15

5

9

14

5

3

8

5

0

5

223

9

232

229

11

240

212

12

224

216

10

226

165

7

172

161

5

166

169

8

177

173

9

182

176

10

186

124

6

130

–

–

1.89

–

–

1.94

–

–

1.77

–

–

1.82

–

–

1.51

–

–

1.93

–

–

1.97

–

–

1.99

–

–

2.10

–

–

2.24

–

–

–

–

–

–

1.7

2.2

1.8

2.4

3.5

2.6

2.0

3.1

2.2

–

–

–

–

–

–

1.5

1.6

1.5

1.7

2.3

1.8

1.7

2.7

1.9

*1 The numbers in parentheses for childcare leave, the male rate of childcare leave taken, and the total for childcare leave taken in fiscal 2022 are calculated by including theCompany’s own leave programs.
*2 The figure for FY2021 was retrospectively revised.
*3 The figures for the years from FY2018 to FY2021 were retrospectively revised due to a change in the aggregation method under the revised personnel system.
*4 As of June 1 of each fiscal year.
*5 Ratio of retired employees to all employees in each fiscal year.

▍Employees by Age (as of March 31, 2023)
10s

20s

30s

40s

50s

60s

70s

Male Female Total Male Female Total Male Female Total Male Female Total Male Female Total Male Female Total Male Female Total

70

Total

Consolidated

8

0

8

404

97

501

468

111

579

492

94

586

631

65

696

232

16

248

9

0

9

2,627

Nonconsolidated

8

0

8

354

87

441

384

100

484

344

72

416

490

51

541

171

10

181

2

0

2

2,073

SANKI REPORT 2023