Human Capital Management

Basic Concept for Human Capital Management

The CITIZEN Group regards its employees as human capital and believes that extracting value from them will lead to sustainable corporate growth and maximize the value we provide to society. Each Group company takes the initiative in developing human capitals capable of driving the growth of company in line with the management strategy and business environment of each company.

In addition to acquiring and developing human capital, we focus on creating an inclusive and diverse workplace and aim to craft a new tomorrow for each and every employee.

Human Capital Development

Human Capital Development Roadmap

As per its management strategy, The CITIZEN Group aims to develop the human capitals 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 regarding training starting with Group Transformation Promotion Training and Basic Management Training.

Elements of the Group Transformation Promotion Training are held jointly with CITIZEN WATCH as part of its management reskilling training.

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. Over 100 people participated in the training. In FY2024, we aim to welcome over 200 participants to the Group Transformation Promotion Training program.

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 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 among group companies 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, expand their network from the individual companies to the Group through working at the destination company and workshop-type training, and in the future, drive the growth of not only the individual companies but also the entire Group.

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 option training programs have been expanded to allow all applicants to select the courses they need from a system of education and training organized by rank and theme. In FY2022, we introduced new online English conversation training and self-development programs, and more than 500 employees took the courses to improve their 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 manufacturing skills, develop human capitals, and pass on skills to future generations. We promote the challenge of acquiring qualifications such as the Business Career Certification Test and other in-house certifications that have been developed in-house according to internal manufacturing needs. Veteran employees and skilled workers serve as instructors to provide education for young and inexperienced employees to pass on skills and techniques.

In addition, we participate in the National WorldSkills Competition with the aim of improving our 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 FY2023 tournament, seven members from the Citizen Watch Group participated, with four entrants in the watch repair category winning awards (one gold, one silver, one bronze, and one commendation award).

Such efforts help to improve employee motivation and foster an attitude of striving toward goals that lead 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 and career recruits for immediate starts with the intention of engaging them in the medium to long term. Approximately 30% of our management positions are filled by mid-career employees. We intend to continue to hire mid-career workers to accelerate our business development and maintain our current proportion of mid-career workers in management positions. Mid-career hires bring with them a wealth of knowledge and skills from diverse industries and bring vitality and a diversity of values to the Group. In FY2021, over 50% of recruits were mid-career hires. In FY2023, we continued from the previous fiscal year and held roundtable discussions between the President and mid-career hires to increase the awareness of our corporate philosophy, boost employee engagement, and refresh communication among mid-career hires.

We have also launched a system to promote the transition of suitably motivated and skilled contract employees to permanent employees. Our focus when hiring permanent employees is individual ability, aptitude, and motivation and we 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 hold company information sessions that visit multiple universities. In FY2023, face-to-face internships were resumed, in combination with online internships. At the same time, videos of company introduction seminars were available via web media, online interviews were conducted, and Japanese students studying abroad became eligible for selection. To ensure that students are not disadvantaged due to their area of residence or academic availability, we strive to provide open employment opportunities to a larger number of students.

Initiatives to Ensure Diversity

CITIZEN WATCH appoints personnel who have gained experience by being stationed overseas from their late 20s to early 30s as young mid-career employees and experienced diversity firsthand to heads of divisions at the head office and overseas offices to ensure the diversity of the entire organization. We offer assignments and opportunities regardless of gender, nationality, new graduates or mid-career hires, and we actively assign female expatriates and mid-career hires as overseas office management staff shortly after they join the company.

There is no gender wage gap; differences in the composition of male and female employees across job grades are the sole factor leading to disparities.

Creating a Workplace where talent Can Thrive

Promoting a Work-Life Balance

The CITIZEN Group is working to create a comfortable work environment that helps employees to achieve a work-life balance that provides economic independence, secures time for a healthy and fulfilling life, and facilitates a variety of work and lifestyle choices. Moreover, in terms of compliance with the Labor Standards Act and other national laws and regulations and employee health management, we maintain a professional environment that organizes work in a manner that avoids excessive overtime and long working hours.

Autonomous Career Development and Diverse Career Paths

CITIZEN WATCH has been holding career design seminars for young and mid-career employees since FY2021 to support their autonomous career development. Thus far, close to 100 employees have learned about fundamental concepts and theories relating to career development and employees of the same generation have been able to network, exchange experiences and knowledge, and deepen their understanding of other departments. A service to consult with external career consultants was also introduced in the same year, with around 20 people participating each year.

CITIZEN WATCH has implemented an in-house side job system that allows employees to spend up to 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 expanded opportunities for employees to develop their skills and has introduced new, diverse values into existing departments with positive results. In FY2023, in-house side job project was underway in four divisions, involved in examining the circular economy and updating fine tuning services, which brought new energy and insight to each project and freed it from the constraints of the conventional thinking driving these projects. Together with the existing external side job system, the in-house side job system is a voluntary tool for employees to seek out their desired work experiences.

Additionally, in FY2023, departments requiring new human capitals introduced an internal open transfer system on a trial basis to invite personnel to transfer to their department, which was formally introduced after a trial in the previous fiscal year. This resulted in several successful personnel transfers in accordance with the requests of the employees.

Since FY2019, CITIZEN WATCH has used a 360-degree evaluation system and follow-up training to improve human capital development and employees’ management skills. Our talent management program promotes the success of diverse employees and serves as a platform for personnel to submit reports on their qualifications and transfer requests. Moreover, we have established a training menu tailored to specific learning and goals to support individual career development and optimize the capabilities of human capitals throughout the company.

As an example of a diverse career path facilitated by CITIZEN WATCH, in FY2021, we introduced a fellow system 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. In this way, late-career employees can leverage their achievements, strengthen the development of their successors, and enhance corporate value.

Workplace Reform and Diverse Work Practices

CITIZEN WATCH has been quick to institutionalize telework and expand the scope of the flextime system to respond to the diversification of work styles, enhance the work-life balance, and realize a work style that is not restricted by location or time. From FY2022, telework is allowed for up to half the number of working days in a month. In addition, as part of the reform of the work style, the working hours were reduced to 7 hours and 45 minutes from the previous 8 hours. 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 business improvement projects and promoted the introduction of systems that contribute to operational improvements and greater efficiency at each workplace.

At the same time, in order to avoid excessive work, each department strives to monitor employee overtime hours and provides thorough guidance to department management staff as needed to avoid excessive overtime and concentration of work from the perspective of compliance with the Labor Standards Act and from the perspective of employee health management. We also work closely with the labor union through information exchange and other means to ensure proper operation.

Roadmap for Improving Decent work

To improve decent work, the CITIZEN Group has been focusing on improving employee engagement by conducting engagement surveys at three companies: CITIZEN WATCH, CITIZEN MACHINERY and, CITIZEN FINEDEVICE, and by sharing information with the Group regarding measures developed in response to the survey results, we aim to improve employee engagement across the entire Group.

Toward Increased Employee Engagement

At CITIZEN WATCH, efforts to enhance decent work include incorporating the results of employee awareness surveys into initiatives such as the implementation of telework systems and training and development programs. Since FY2023, engagement surveys have been regularly conducted across CITIZEN WATCH, CITIZEN MACHINERY, and CITIZEN FINEDEVICE. Employees can conveniently respond to these surveys via smartphone, and a system has been established for department heads to review and address their department's survey results to drive improvements.

At CITIZEN WATCH, the response rate for the second engagement survey, which included all employees including non-regular employees, reached 95%, achieving the annual target rate.

The results of the survey, together with the analysis by the survey company, are reported to management. As company-wide measures, measures to support career autonomy, expansion of the management staff reskilling menu, and training for evaluators are implemented to improve “provision of career opportunities,” “relationship with superiors,” and “satisfaction with evaluations.” CITIZEN WATCH has introduced a target management system, whereby performance evaluations are conducted twice a year against targets set with management staff at the beginning of the term, and performance feedback from supervisors and career interviews are held at least three times a year to promote career development. Further in FY2023, seminars on improving engagement were conducted with participation from department heads. Concrete actions tailored to each department to improve engagement, such as conducting value workshops to determine and share values important to the team, were discussed and implemented.

Through actions deployed from both company-wide and departmental perspectives, we aim to enhance decent work by improving employee engagement.

Creating a Comfortable Work Environment

Acquisition of the Kurumin Certification Mark

"Kurumin Certification" is a system under which the Minister of Health, Labour and Welfare certifies companies that have achieved their goals and met certain standards for their general business owner action plans, formulated in accordance with the Act on Advancement of Measures to Support Raising Next-Generation Children, as “Companies that support child-rearing."

In The CITIZEN Group, CITIZEN MACHINERY (certified in 2018 and 2021), CITIZEN WATCH MANUFACTURING (certified in 2018 and 2022) have received “Kurumin certification” from the Ministry of Health, Labour and Welfare as companies that are working to support employees to balance work and childcare.

The companies were recognized for their efforts to introduce and promote the use of support systems that exceed the legal requirements to enable all employees, including those raising children, to develop long-term careers, as well as for their efforts to create a diverse and comfortable work environment based on the perspective of a work-life balance.

Acquisition of “L-boshi” Certification

The “L-boshi” Certification is a system under which the Minister of Health, Labour and Welfare certifies companies that meet certain standards and have excellent conditions for promoting women’s activities based on the law concerning the promotion of women’s activity in the workplace (The Act on Promotion of Women’s Participation and Advancement in the Workplace).

CITIZEN FINEDEVICE CO., LTD., which was certified in FY2023, was awarded the highest three-star “L-boshi” Certification, in recognition of its various efforts to demonstrate the abilities of women, including equal competitive rates for men and women in recruitment, efforts to reduce working hours, with the average total number of legal overtime and legal holiday working hours being less than 45 hours per month, and promotion of career advancement for women, including the transition from general to senior-level positions.

“L-boshi” Certification (Three-star)

Relationship with the Labor Unions

At The CITIZEN Group companies, labor unions representing employees and the companies regularly negotiate and discuss management policies and working conditions, and through exchanges of opinions respecting each other's views, opportunities are provided for labor unions to engage in dialogue with company management to build stable labor-management relations. 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 optimal working environments in order to raise the corporate value and improve employee satisfaction.

Prevention of Harassment

The CITIZEN Group has established rules to prevent sexual and power harassment, which we recognize as a social issue, and conducts educational activities such as "Harassment Prevention Seminars" led by legal counsel and outside consultants. In FY 2023, we conducted “Assertive Communication training.” These sessions went beyond basic knowledge acquisition and delved into deepening understanding of harassment prevention through practical interactions and exchanges. 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 "The CITIZEN Group Compliance Hotline" to receive consultation on all aspects of harassment. Furthermore, CITIZEN WATCH has set up a consultation desk for harassment in the workplace and accepts a wide range of consultations regarding harassment.