Human Capital Management

Basic Concept for Human Capital Management

The CITIZEN Group regards its employees as human capital and believes that bringing out value from them will lead to sustainable corporate growth and maximize the value we provide to society. We have set a vision for the Group’s human resources as "Have each employee feel a sense of pride at working at CITIZEN as they contribute to the realization of our long-term vision." To fulfill this vision, each Group company takes the initiative in developing human resources capable of driving the growth of the company in line with its management strategy and business environment.

We focus on attracting and developing talent while fostering a work environment where diverse employees can thrive, all with the aim of ensuring a bright future for every member of our Group.

Human Capital Development

Human Capital Development Roadmap

As per its management strategy, The CITIZEN Group aims to develop the human capital required to manage and transform the Group and its companies and to achieve growth for Group companies and their employees. Since FY2022, in addition to providing training at each operating company, we have strengthened Group-wide collaboration in training, starting with Group Transformation Promotion Training and Basic Management Training.

Some sessions of the Group Transformation Promotion Training are held jointly with CITIZEN WATCH’s management staff reskilling training sessions.

Group Transformation Promotion Training & Management Human Capital Development Training

As technology continues to evolve, it is vital to update the Group’s strategic thinking. With this in mind, in FY2022, The CITIZEN Group launched common training programs to promote the Group’s transformation and develop management human capital. Every year, over 100 people participate in the training from the entire Group. In FY2025 as well, we will continue to provide the Group Transformation Promotion Training while enhancing its content and expanding the scope of participants.

Group Talent Rotation Program

The CITIZEN Group’s human capital development system consists of Group-wide rank-specific programs organized by CITIZEN WATCH and training programs implemented by each Group company. We are also focusing on developing the next generation of leaders, who will be responsible for the future of the Group, and we rotate future leader candidates across the Group, beyond the boundaries of individual companies. Employees selected for the Next Generation Leader Development Program are expected to deepen their understanding of the business environment of each Group company and expand their network from the individual companies to the entire Group through work at the host company and workshop-type training. They are also expected to drive the growth of not only the individual companies but also the entire Group in the future.

Training System

CITIZEN WATCH aims to develop professional talent at an early stage through a dual approach of company-led and self-directed career development of each employee, which contributes to both employee and company growth. To enable self-reliant career development, career seminars are held for those who are interested, and voluntary and optional training programs have been expanded to allow all applicants to select the courses they need from the education and training curriculum organized by rank and theme. In FY2022, we introduced new online English conversation training and self-development programs, in which more than 500 employees participated. We therefore work to improve employees’ English communication skills, which are fundamental for success in a global company. We have created an environment in which employees who are eager to learn can do so at any time, fostering an attitude of continuous learning.

• * Conditions for training vary depending on the training contents, such as mandatory participation, supervisor recommendation or personal application.

Other Initiatives for Talent Development

[Case Study] Training Manufacturing Technicians

CITIZEN WATCH MANUFACTURING

CITIZEN WATCH MANUFACTURING, whose aim is to operate the best watch factories in the world, has established the Watch School, which is intended to improve employees’ manufacturing skills, develop human capital, and pass on skills to future generations. The company encourages employees to take on the challenge of acquiring qualifications, such as the National Trade Skill Test & Certification and the Business Skills Test, as well as in-house certifications that have been developed according to internal manufacturing needs. For example, experienced employees and highly skilled coworkers serve as instructors to provide prospective qualification test applicants with guidance toward success in such tests. The company therefore educates young and inexperienced employees as heirs to the skills and techniques of their predecessors.

In addition, the company participates in the National Skills Competition with the aim of improving employees’ skills and techniques. This is a competition for young engineers under the age of 23, who will be responsible for the future of Japanese manufacturing. In the FY2024 competition, nine members from the CITIZEN WATCH Group(five in the watch repair category and four in the mechatronics category) participated, among whom three entrants in the watch repair category won awards (two bronze and one commendation award).

Such efforts help improve employee motivation and foster an attitude of striving toward goals, leading to human capital development through manufacturing.

In the future as well, we will continue to train young technicians and pass on skills and techniques, as well as raise the level of employees' abilities, through the Watch School and the National Skills Competition.

Acquisition of Talent

Recruitment Activities

The CITIZEN Group companies hire graduates from a medium- to long-term perspective, as well as mid-career recruits as immediate assets. At CITIZEN WATCH, approximately 30% of management positions are filled by mid-career hires. The company aims to continue to hire mid-career workers to accelerate its business development and maintain the current proportion of mid-career hires in management positions. We believe that mid-career hires can bring with them a wealth of knowledge and skills from diverse industries, as well as vitality and diverse values, to the CITIZEN Group as a whole. At CITIZEN WATCH, the proportion of mid-career hires among all recruits in FY2021 and subsequent years exceeds 50%. In FY2024, we enhanced our onboarding program to stimulate communication between mid-career hires and allow them to better demonstrate their capabilities as immediate assets. Just as in the previous fiscal year, we held roundtable discussions between the president and mid-career hires to increase the awareness of our corporate philosophy and boost employee engagement.

We have also launched a system to promote the transition of suitably motivated and skilled contract employees to permanent employees. In hiring permanent employees, we value individual ability, aptitude, and motivation and always endeavor to achieve a diverse and equal-opportunity workplace.

Framework to Ensure Open Recruiting

In order to minimize the impact of the job-hunting season on academic activities, The CITIZEN Group companies send staff to multiple universities to hold company information sessions. In FY2024, we provided both face-to-face and online internship programs. At the same time, we posted videos of company introduction seminars on the internet, conducted online job interviews, and included Japanese students studying abroad in the scope of our recruitment. To ensure that students are not disadvantaged due to their area of residence or academic circumstances, we strive to provide open employment opportunities to a larger number of students.

Initiatives to Ensure Diversity

From among mid-career personnel in their late 20s to early 30s, CITIZEN WATCH appoints those who have gained experience by working overseas while being immersed in diversity to be department heads at the headquarters or to be responsible for overseas sites in order to ensure the diversity of the entire organization. We offer assignments and opportunities regardless of gender, nationality, or whether new graduates or mid-career hires. We constantly assign female employees as expatriates and mid-career hires as overseas site management staff shortly after they join the company.

There is no gender salary gap; differences between job grades in terms of the composition of male and female employees are the sole causal factor behind disparities in salary.

Creating a Workplace Where Talent Can Thrive

Promoting a Good Work-Life Balance

The CITIZEN Group is working to create a comfortable work environment that helps employees to achieve a work-life balance that is sufficiently good to provide economic independence, secure time for a healthy and fulfilling life, and offer a variety of work and lifestyle choices. Moreover, from the perspectives of compliance with the Labor Standards Act and other national laws and regulations, as well as employee health management, we maintain a professional environment that helps avoid excessive overtime work and long working hours due to the concentration of work on particular employees.

Autonomous Career Development and Diverse Career Paths

Since FY2021, CITIZEN WATCH has been holding career design seminars for applicants among young and mid-career employees to support their autonomous career development. Thus far, over 100 employees have learned about fundamental concepts and applied theories relating to career development. The seminars have also provided the opportunity for employees of the same generation to have discussions with each other and deepen their understanding of the duties of other departments, which otherwise they would not learn about. A consultation service with external career consultants was also introduced in the same year, with around 20 people using the service each year.

CITIZEN WATCH has implemented an in-house side job system, which allows employees to spend around 20% of their total working hours on internal duties unrelated to their primary job role. The system enables employees to acquire knowledge and skills beyond those used in their regular work and to network with a wider group of colleagues. This system has also provided employees with expanded opportunities for skill development and has brought new, diverse values to existing departments, thereby producing positive results. In FY2024, three departments carried out in-house side job projects, including a clock mechanism modeling project at a museum and a Riiiver-compatible watch programing project. Unconventional ideas brought a breath of fresh air to these three projects. Together with the existing external side job system, the in-house side job system is utilized as a voluntary tool for employees to seek out their desired work experiences.

Furthermore, the internal job posting system, introduced in FY2023, has been widely utilized, allowing employees to transfer to other workplaces by application.

Since FY2019, CITIZEN WATCH has used a 360-degree feedback system and follow-up training for human capital development in each department in order to develop human resources and increase employees’ management skills. Our talent management program supports the success of diverse employees and serves as a platform for personnel to periodically submit reports on their qualifications and transfer requests. Moreover, we have established training menus tailored to each person’s learning focus and goal to support individual career development and enhance and optimize the capabilities of human capital throughout the company.

An example of CITIZEN WATCH’s initiatives to provide employees with a wide choice of career paths is a fellow system, introduced in FY2021, that offers role-based compensation and benefits to employees with advanced expertise and outstanding professional achievements to allow them to continue working after the age of 60. We therefore appropriately evaluate late-career employees according to their achievements, strengthen the development of their successors, and enhance corporate value.

Work Style Reform and Diverse Work Practices

CITIZEN WATCH has been a pioneer in institutionalizing telework and expanding the scope of the application of the flextime system to respond to the diversification of work styles, help employees enhance their work-life balance, and realize a work style that is not restricted by location or time. In addition, as part of work style reforms, the regular working hours, which had previously been 8 hours, were reduced to 7 hours and 45 minutes. With the aim of improving productivity and creating an environment in which all employees can work with vigor and enthusiasm, we have launched employee-led operational improvement projects and promoted the introduction of systems that contribute to operational improvements and greater efficiency at each workplace.

AtMeanwhile, we not only ensure that each department strives to monitor employee overtime hours but also provide thorough guidance to department heads as needed with the aim of avoiding excessive overtime work and concentration of work from the perspectives of compliance with the Labor Standards Act and employee health management. We also work closely with the labor union through information exchange and other means to ensure that appropriate working hours are strictly observed.

Roadmap Toward More Decent Work

To make work in the CITIZEN Group more decent, the Group conducts employee engagement surveys at the four companies of CITIZEN WATCH, CITIZEN MACHINERY, CITIZEN FINEDEVICE, and CITIZEN SYSTEMS. By sharing with the other Group companies information about measures developed in response to the survey results, we aim to improve employee engagement throughout the Group.

Toward Increased Employee Engagement

At CITIZEN WATCH, the third engagement survey was responded to by 99% of all employees, including non-regular ones, achieving the annual target.

The results of the survey, together with an analysis conducted by the survey company, have been reported to management. Also, company-wide measures have been implemented to support employees’ career autonomy, enhance the management staff reskilling curriculum, and train evaluators with the aim of achieving improvements in provision of career opportunities, employees’ relationships with their superiors, and employee satisfaction with evaluation. CITIZEN WATCH has introduced a target management system, whereby performance evaluations are conducted twice a year against targets set by each employee and their superior at the beginning of the term, and the superior gives performance feedback and conducts career interviews at least three times a year to help the employee in career development. Furthermore, in FY2024, the company held engagement improvement seminars not only for managers but also for employees in order to spread awareness of organizational development using the results of engagement surveys. Concrete engagement improvement actions tailored to each department are being discussed and taken, such as "values works," where members of a team determine and share values important to them. The company has also created a new knowledge-sharing opportunity for senior managers to share best practices and learn from each other in order to facilitate communication between managers.

Through these actions taken from both company-wide and departmental perspectives, CITIZEN WATCH aims to make work more decent by improving employee engagement.

Creating a Comfortable Work Environment

Employee Benefits

Employee Stock Ownership Program

The CITIZEN Group offers an employee stock ownership program whereby employees jointly purchase shares in CITIZEN WATCH through deduction from their salary on a monthly basis. The program allows them to make continuous installment payments of their own designated amount of investment plus incentives given by the company. In addition, CITIZEN WATCH offers full-time employees congratulation and condolence money, long-service awards, and special paid leave and grants for refreshment according to their years of service. The company also provides all employees with an employee asset-building savings plan and a variety of Group insurance coverage according to their needs.

Relationship with the Labor Unions

Each CITIZEN Group company regularly negotiates and discusses management policies and working conditions with the labor union as a representative of employees. After exchanges of opinions with respect for each other’s views, the labor union is provided with an opportunity for dialogue with company management. The company has therefore built stable labor-management relations. As of March 2025, the labor union organization rate at the eight companies affiliated with the CITIZEN Group Trade Union Federation was 57.2%.Overseas Group companies hold talks with labor unions or employee representatives in accordance with the laws and regulations of each country. Going forward, each Group company will hold talks on Group operational mechanisms and systems, as well as how to create optimal working environments, in order to further increase both its corporate value and employee satisfaction.

Prevention of Harassment

The CITIZEN Group has established rules to prevent sexual harassment and "power harassment" (workplace harassment by those with greater power), both of which are of social concern. We also conduct educational activities such as Harassment Prevention Seminars taught by a corporate attorney and outside consultants. In FY2024, we provided employees with training on unconscious bias, which is a possible cause of harassment, taking a forward step beyond acquiring basic knowledge to learn about the background to harassment and deepen their understanding thereof. In addition, we have established Regulations for Prevention of Harassment to prevent harassment related to pregnancy, childbirth, childcare leave, nursing care leave, etc. We have also established and are operating The CITIZEN Group Compliance Hotline to accept requests for consultations on all forms of harassment. Furthermore, CITIZEN WATCH has set up a workplace harassment consultation desk to widely accept requests for consultations regarding harassment.