Issues to be addressed

The UT Group faces the following issues in its operation.

Establishment of a less economically sensitive business base

Due to Japan’s economic recovery, Japan’s manufacturing companies have recorded robust earnings, and those companies, especially electrical machinery and electronic parts manufacturers, have been engaged in sales and consolidation of businesses, structural reorganization and the resulting integration or abolition of their domestic production. This situation presents business opportunities for UT Group, as such manufacturers’ production sites may need to resolve a shortage of workers. At the same time, however, UT Group’s sales may be affected by the production trend of each client company.

In this environment, we will deepen and expand business with device manufacturers that hold high global market shares in the electronic component and semiconductor industries, the areas where UT Group has been strong. In addition, we intend to aggressively promote business expansion in the automotive-related area as well as in areas related to construction and building materials, in order to continue establishing a stable business base.

Establishment of a stable hiring system

The number of working population, particularly younger one, has been on a declining trend and the jobs-to-applicants ratio has stayed at a high level nationwide. Since the majority of the people who work in UT Group’s business are younger workers, this trend could easily have an impact on our hiring activities. Over the medium and long term, hiring of engineers could become increasingly difficult.

In this environment, we will establish a stable personnel hiring system by utilizing various hiring channels including the conventional means of web-based media and job information magazines and other printed media and by holding interviews in many parts of Japan and standardizing the skills of interviewers.

Raising of the retention rate of technical employees and enhancement of their skills

In the manufacturing outsourcing industry, which UT Group belongs to, the retention rate of dispatched workers tends to be low compared to that of regular, indefinite-term employees, and dispatched workers are characterized as highly liquid. This stems from the fact that fixed-term employment has been common in the manufacturing outsourcing industry, making it difficult for dispatched workers to consistently build their careers or raise their skills. The industry’s low and declining retention rate of dispatched workers results in increasing hiring costs in order to maintain the number of dispatched workers, and in lowering profitability. Moreover, if dispatched workers’ skill levels cannot be raised, it is difficult to raise the unit price of dispatching.

As we are aware of this situation, we hire employees to be dispatched to our corporate clients as regular (indefinite-term) employees and ensure their stable employment. Only then, our internally-authorized career counselors jointly think of a career plan fit to each employee and our technical employees strive to raise their skills and advance their career through education and training. We will continue these measures and further enhance our system in order to raise the retention rate of technical employees and to consistently enhance added value.

Enhancement of structure of business administration and business operation

We aim to achieve sustainable high sales and continuing profit growth. In order to do this, it is indispensable to establish an appropriate organizational base for our business scale and to develop and secure a workforce for business administration and business operation. In addition to securing and developing such personnel, we are working on establishing flexible organizational management and an operation system to support this, as priority issues.

Continual enhancement of corporate governance structure

We recognize that it is important to enhance our corporate governance structure in order to realize our sustainable growth and increase our corporate value. We are therefore working on establishing a system for appropriate, timely decision making and execution of business, and a system to appropriately supervise and oversee it. From the perspective of ensuring sound management and transparency, we will continually enhance our corporate governance structure, which should be appropriate to our business scale.