Human Resources Strategy
1. Aozora’s Human Resources Strategy
Aozora’s management philosophy is to contribute to the development of society through the creation of new value-added financial services. While we are a manageably sized entity with approximately 2,500 employees, we provide high-quality financial services by harnessing our high level of expertise and capacity to offer proposals. We believe that the human capital that delivers these services is our primary source of value creation and is one of our most valuable assets.
Under our Mid-term Plan “Aozora 2025,” which lays out our management strategy, we are focusing on Aozora’s Strategic Investments Business, which seeks to serve customers in three phases: Fostering, Change, and Recovery. We are also working to resolve the issues confronting customers and regional communities. As part of our human resources strategy for realizing this management strategy, we will shift human resources to growth and focus areas. Furthermore, we will make efforts to hire and develop diverse and talented human capital, give back to employees, and improve engagement. We will continue to invest in human capital over the long term, regardless of changes in the business environment. By implementing human resources strategies that are linked to our management strategy, we will work to maximize employees’ abilities while enhancing their productivity, with the aim of increasing Aozora’s corporate value over the medium to long term.
Our Vision for Human Capital Investment
- Diversity, equity, and inclusion
Bolstering Investment in Human Capital
As part of human capital investment, Aozora emphasizes not only extrinsic rewards but also intrinsic rewards.
In terms of extrinsic rewards, we are not only implementing human capital recruitment and development measures in accordance with pay-scales and the human resources strategy, but have also been working on HR reform since FY2020 under the key phrase of taking on challenges and teamwork, as laid out in Aozora’s Key Priorities, aiming for the appointment of outstanding human resources regardless of age or gender by eliminating barriers between career courses or generations. At the same time, we have been striving to maintain a competitive remuneration system by reviewing compensation packages to better reward those who take on challenges or produce results.
In terms of intrinsic rewards, we have been working for many years to develop a good work environment for employees, improve employees’ well-being, and provide a variety of career building support programs in order to improve employee engagement.
As a result of these efforts to bolster investment in human capital, in FY2023 business-related profit from customer-related business performed strongly despite pressure on our overall business performance. This also led to a high employee retention rate. Looking ahead, we will continue to promote customer-related business centered on Aozora’s Strategic Investments Business by continuously bolstering human capital investments, with the goal of achieving the Mid-term Plan’s targets, such as business-related profit per employee. Furthermore, we will continue to make every effort to make Aozora a destination chosen by talented human resources seeking job satisfaction, as well as a business enterprise chosen by all stakeholders.
Recruitment and Assignment of Human Resources
As part of its human resources strategy to realize its management strategy, Aozora strives to secure human capital that can appropriately respond to changes in the business environment, act proactively, and embody the principle of taking on challenges and teamwork. We also strive to secure human capital that has the necessary skills for our focus areas such as Aozora’s Strategic Investments Business and DX.
Aozora’s recruitment strategy involves carefully selecting high-potential new grads as part of the new grad hiring process. Mid-career hires have also been a major focus for many years. We bring onboard highly specialized mid-career hires with a varied range of experience and values, who begin contributing to Aozora immediately and go on to have successful careers with us. (Mid-career hires account for 39% of the total number of employees.) As part of efforts to strengthen our hiring capabilities, we have institutionalized alumni hiring (re-hiring of Aozora’s retirees) and referral hiring (hires referred by employees) beginning in FY2024.
Turning to the appointment of employees, one notable characteristic of our human capital is the presence of a small but elite group of employees with diverse values and experience who have the opportunity to play active roles at Aozora, regardless of new grad or mid-career hires. In our 2020 HR system reform, we already abolished the “Ippan-shoku (non-professional career category)” and eliminated barriers to work and career paths. As a result, career courses have been concentrated into three types: Global Professional, Regional Professional, and IT Professional, which was created with the objective of strengthening IT competitiveness. For positions that require even greater specialization, we also employ contract-based Professionals and Specialists (job-based employment) in accordance with job description, skills, and experience. All hires are appointed as future candidates for management positions or highly skilled professionals. We strive for the optimal assignment of human resources, considering individual employee aptitude, abilities, and career orientation. Moreover, we analyze and visualize human resources assessment data, including employee skills, experience, career orientation, evaluation, and personality factors, and use this data to guide the strategic hiring and assignment of human resources.
Human Resources Development Strategy
A feature of Aozora’s human resources development strategy is based on the offering of a wide range of training programs that encourage employees to take on new challenges while respecting their diverse career plans and individual initiatives. Our aim is to encourage employees to take greater responsibility for their own growth and development based on their own needs and aspirations.
As part of our human resources development policy, we strive to ensure that junior employees can start to contribute at an early stage through position-specific training and business skills training offered by the HR Division as well as education and hands-on experience based on specialist training programs available where they are assigned. We also develop new grads from a medium- to long-term perspective by allowing them to gain experience in various operations at three different workplaces, including sales divisions/branches, during their first eight years, and by providing them with a variety of career building opportunities as prospective upper management candidates. Mid-level employees and managers in their 30s and 40s are placed in positions that enable them to strengthen their management capabilities and expertise. Through these measures, we hope to develop human capital capable of facing and overcoming challenges, learning to persevere, and becoming a source of value creation. Notably, we are aiming to shift managers’ mindsets by making human resources development a primary responsibility of managers. We offer seniors opportunities to change their mindsets and select new compensation packages and work styles. We believe that senior employees play an important role in passing on their experience and expertise to the next generation, while actively performing their duties.
One key feature of our training is that most of our programs are provided in-house by personnel with coaching and other certifications and employees well versed in highly specialized operations. In light of changing circumstances, we also offer practical, high-quality training through outside instructors and other professionals. We will continue to seek to develop human capital that pioneers new fields and possesses the expertise as a leading expert in each field, thereby benefiting society.
Aozora Career Building Support Programs
- For details on each program, please refer to page 12 of the Annual Report 2024 (Financial and Corporate Data Section).
Development Program for Human Resources in Aozora’s Strategic Investments Business
We started the new Development Program for Human Resources in Aozora’s Strategic Investments Business which is our focus area. This program is an updated version of the previous human resources development program carried out since FY2022. We develop core talent for Aozora’s Strategic Investments Business through the program and its implementation in each business group.
Digital Talents Development
In FY2021, we started the Digital Talents Development Program to allow all employees to take the initiative to engage in DX. In FY2023, the number of employees participating in AI talents development programs, which have been ongoing since the previous fiscal year, steadily increased. Furthermore, we held study sessions and training programs related to the use of generative AI for officers and employees to coincide with the start of trial-based use of generative AI in the second half of FY2023. A broad range of training programs were also provided to facilitate the use of BPR, digital marketing, and data. Looking ahead, we will continue to develop human resources capable of utilizing data and information in business workplaces.
Overview of Digital Talents Development
Career Autonomy Initiatives
Through interviews and Career Plan Sheets, which are submitted by each employee annually to report on their transfer requests and future career plans, the HR Division and Group heads closely monitor employees’ preferences, capabilities, and aptitude. Since FY2023 we have assigned a career consultant to the HR Division and established a system that can always respond to employees’ career consultations by offering support and addressing concerns about their careers.
Furthermore, we undertake initiatives that allow employees to expand their scope of experience so that they can take the initiative to build their own careers. As part of these initiatives, we provide opportunities for employees to gain diverse work experience and change their mindset through various voluntary systems. These systems are offered to voluntary applicants and include the overseas trainee program and short-term trainee program in other departments in Japan, Job-posting Program (internal recruitment), and Job Support Program (in-house side jobs). More and more employees are taking the initiative to build their careers by utilizing these programs. We will continue to create an environment for employees to develop their abilities and build their careers, with the aim of being a company of choice for highly talented employees.
Improvement in Employee Engagement
In order to drive Aozora’s growth, we believe that it is important to foster a comfortable working environment for employees and enhance each employee’s job satisfaction by respecting their diverse values, lifestyles, and career plans.
We conduct an annual employee survey to monitor employee satisfaction and needs. We gather a wide spectrum of employee feedback, present it to management and executive officers, and discuss it at Executive Officers’ Meetings. We incorporate this feedback into a variety of operational measures, in addition to our HR system. We aim to establish an environment that is conducive to employee success and enhances their job satisfaction by implementing PDCA cycles that involve monitoring employee needs and reflecting those needs in measures.
According to the results of the FY2023 employee survey, around 80% of the respondents said that Aozora offers a comfortable workplace environment, which was about the same percentage of respondents as in the previous survey. In contrast, the percentage of respondents who selected positive answers regarding job satisfaction decreased from 58% to 56%, indicating that improving job satisfaction remains an important issue. Meanwhile, the percentage of respondents who felt a corporate culture of support for taking on challenges increased from 37% to 39%, which was an encouraging result for the future. Furthermore, a similar trend was observed by Wevox, a system for measuring employee engagement through monthly surveys. This trend shows that efforts to make workplace-driven improvements are steadily bearing fruit.
We believe that job satisfaction can be successfully improved through the process in which each employee understands the management philosophy and strategy, accepts responsibility and ownership for transferring and implementing them at the operational level, and proactively engages in their duties. To create opportunities for the management philosophy and strategy to be widely adopted by the organization, we held Town Hall Meetings and small-sized meetings where employees can directly communicate with management, as well as Communication Forums attended by all employees on several occasions. We began holding Communication Forums in FY2020, and in FY2023, we held these events 30 times to encourage wider adoption of the management philosophy. These events not only provide an opportunity to learn about the management philosophy and review job satisfaction, but they also serve as a valuable venue for interaction among employees of various generations and groups.
We will continue to enhance employee job satisfaction through measures that increase intrinsic rewards, such as improving engagement, thereby laying the groundwork for increasing Aozora’s corporate value over the medium to long term.
PDCA Cycles for Improving Employee Engagement
Enhancing Employee Well-being—Health and Productivity Management and Financial Wellness
Being physically and mentally healthy as well as being socially stable and fulfilled are the prerequisites for employees to flourish as human capital. Aozora is working to improve employee well-being by promoting the enhancement of health and productivity management and financial wellness, with the view to maintaining and enhancing employee health and productivity.
Initiatives to Improve Employees’ Health Literacy
- Started “Training on the Importance of Physical and Mental Health Management” for new hires, led by an occupational health physician
- Held a seminar for all employees titled “How to Read and Understand the Results of Your Regular Health Checkups”
- Held a seminar, led by an outside instructor, titled “Improving the Breast Cancer Screening Rate and the Necessity of Early Detection and Treatment”
Health and Productivity Management Initiatives
Aozora has formulated a data health promotion plan and works together with Aozora Bank Health Insurance Society (a single health insurance society) to maintain and promote the mental and physical health of employees to establish work environments where employees can work for a long time with peace of mind. In addition to initiatives including programs that subsidize full-scale health checkups and cancer screenings for employees and their families, we also work to prevent mental health and lifestyle-related illness. As part of these efforts, an occupational health physician and specialized medical staff provide follow-up services based on the results of regular health checkups and stress checkups.
Initiatives such as these have brought significant benefits, resulting in a high percentage of self-reported health* among employees and being certified as a Health and Productivity Management Organization every year.
- According to Aozora's Employee Survey on Health Awareness and Literacy in FY2023, 83% of employees answered, “I am healthy.”
- [Full-scale health checkup subsidy support]
Provided every year to all employees aged 30 and over
Amount of financial support- Women:
- 71,500 yen (including gynecological option)
- Men:
- 49,500 yen
Improve Employees’ Financial Wellness
For employees to be able to fully demonstrate their abilities and flourish, we believe that it is important that they be able to work in a state of financial stability and not have anxieties about their future life. Based on this belief, we have established a program to realize financial wellness for our employees.
First, we have a compensation system in place that takes into account price increases. Based on this system, the starting salary level was raised for two consecutive years and the pay-scale was raised for three consecutive years. In addition, we have not only established a corporate pension plan to prepare for post-retirement life, but also offer training sessions to explain how to approach financial planning, as well as to present the lump-sum retirement payment and corporate pension plan, in order to provide opportunities for employees to gain a better understanding of these topics. As part of our benefit package, we also provide generous financial support for younger employees, including an allowance supporting repayment of scholarships and rent subsidies. We have also permitted secondary employment to help employees develop their skills and expand their scope of experience. By expanding these programs, we have established a comfortable work environment that supports the financial stability of employees and their families.
One of Aozora’s Key Priorities for realizing its management philosophy is to “respect one’s colleagues and support professional growth of all team members.” Based on this priority, we are working to implement diversity, equity, and inclusion by encouraging wider adoption of various activities, such as unconscious bias training. By establishing an environment in which employees can fully demonstrate their abilities, we seek to pave the way for recruiting, retaining, and ensuring the success of human capital with a diverse array of values and experience that are vital to realizing our management strategy.
Ensuring Diversity of Core Talent in Appointments and Other Areas
Since FY2021, Aozora has been moving forward on strengthening initiatives to ensure diversity in the appointment of core talent and other areas, establishing its human resource development and environmental policies while setting targets for the ratio of women, non-Japanese, and mid-career hires in management positions. The ratio of mid-career hires in management has already reached approximately 54%, leading toward ensuring diversity in management decision-making positions.
Human Resource and Working Environment Development Policies
|
Policies |
Actions |
|---|---|
|
Hiring and appointing |
|
|
Support female |
|
|
Create a working |
|
Goals and Progress
|
Categories |
Current ratios |
|---|---|
|
Female managers |
14.2% |
|
Female deputy managers |
39.3% |
|
Non-Japanese managers |
1.3% |
|
Mid-career managers |
53.9% |
|
Male employees taking |
90% |
|
Target ratios |
|---|
|
20% or higher |
|
40% or higher |
|
3% or higher |
|
Maintain 40% or higher |
|
100% or higher |
- For notes on the above table, please refer to the notes section below the relevant table in “Non-financial Information Index” on page 127 of the Annual Report 2024.
Creating Opportunities for Female Employees
Aozora is distinguished by the average years of service of female employees, which is above 16 years and surpasses that of male employees. This has been the result of various measures taken to prevent female employees from having to retire because of childcare or nursing care. The gender mix of employees is approximately equal between men and women. Many female employees are working in various workplaces throughout Aozora.
Aozora has set its own target for the ratio of deputy managers who are candidates for female managerial positions, in addition to its target for the ratio of female managers. In this way, we are striving to expand our core talent pool in order to create even more opportunities for women to succeed. Women will continue to be appointed to all manner of decision-making positions, including executive officers. We are aiming to raise the ratio of female managers to 20% or higher by March 31, 2028, and to over 25% in the long term.
In FY2020, we conducted HR reform. This reform abolished “Ippan-shoku (non-professional career category)” and integrated it with the professional category, allowing everyone to pursue their career goals. As a result, career-course-based limitations on roles and responsibilities were completely removed.
Beginning in FY2023, we have implemented new measures to support female managers and female deputy managers who are one step closer to managers. These measures include providing female leadership training in workplaces with a large number of women in the former “Ippan-shoku” category and support for network building among individuals from different groups. Furthermore, in order to prevent female employees from retiring due to childcare, we organize numerous events for child leave users who will soon return to the workplace, as well as consultations with career consultants on the topic of balancing childcare and work. In addition, the aforementioned alumni program offers a pathway for retired employees to re-enter the workforce at Aozora.
Some female employees have moved beyond their fixed roles to take on new challenges by taking advantage of measures to broaden their scope of experience, relocating to other locations, and engaging in other new ways of working, such as working remotely at the Head Office from regional branches.
As a result of these initiatives to create opportunities for female employees, the number of women being promoted from the former “Ippan-shoku” to managers has been steadily increasing.
In terms of the wage gap between men and women, women only earn 65% of what men earn, leaving room for improvement. As a result of the career course integration in FY2020, we have been able to achieve equal pay between men and women on the same career course, rank, and salary table. However, the most significant explanation for the wage gap between men and women is that there are still very few female managers. Other factors contributing to the wage gap between men and women include relatively few female employees who are active in focus areas such as Aozora’s Strategic Investments Business, as well as the fact that many female employees with long years of service work in support groups such as back-office operations and have remained low-ranking. It will take time for the effects of the career course integration and generational change to manifest. However, we expect the gap in annual salary between men and women to narrow as more women become managers or are promoted, regardless of their former job types. This trend will be facilitated by creating opportunities for female employees and assisting them in enhancing their skills.
Compulsory Childcare Leave Under the Fathers’ Post Natal Childcare Leave Program to Encourage Men to Take Childcare Leave
At Aozora, women have a 100% rate of taking childcare leave. Meanwhile, although the acquisition rate among men has increased dramatically over the last two years, it has not yet reached 100%. We view improving the acquisition rate among men as a priority. In 2022, Aozora introduced the Fathers’ Post Natal Childcare Leave Program. This program is notable for lowering the hurdles for taking leave, with features such as allowing employees to take up to four weeks of paid leave, allowing leave to be taken in installments, and enabling employees to do some work while on leave. Beginning in FY2024, Aozora changed this program to make taking five days of childcare leave per year compulsory for eligible employees. Through this redesigned program, we will strive to foster a more comprehensive understanding of the importance of balancing childcare and work in the workplace, regardless of gender, in order to achieve our target of having 100% of male employees take childcare leave.
Activities of Aozora Ally
In 2022, Aozora launched Aozora Ally to work closely with employees from diverse backgrounds, including those with disabilities or members of the LGBTQ community, toward the entrenchment of diversity, equity, and inclusion. In FY2023, Aozora Ally continued to engage in activities to cultivate a workplace culture that values diversity, such as holding a training session titled “Training to Deepen Understanding of the LGBTQ Community” for all employees to address this topic of growing public interest. We will continue to create work environments where all employees can work comfortably and energetically.
Aozora considers the individual needs of employees with disabilities based on their specific disabilities and provides an environment where these employees can work like other employees. In recognition of this, we received the Tokyo Metropolitan Government’s “Excellent Company Award for the Employment of People with Disabilities.”
A Safe Working Environment
Our staff members, including occupational health physicians, nurses, public health nurses, mental health & welfare counselors, corporate-employed job coaches, and 2nd grade certified skilled professionals of career consulting, work in partnership to take care of the individual needs of employees with disabilities.
Initiatives Led by Employees with Disabilities
The president and other executive officers engage in direct dialogue with employees with disabilities, actively exchanging opinions to create a comfortable work environment. Based on ideas proposed by employees with disabilities, we held Aozora-wide seminars to learn sign language for use in the event of a natural disaster and installed anti-collision safety mirrors. We periodically conduct study sessions to deepen understanding of disabilities, where employees with disabilities serve as instructors, as well as Aozora’s unique Simulated Hearing Impairment Program, which was proposed and designed by employees with disabilities. This section (page 100 of the Annual Report 2024) was prepared by employees with disabilities.
Initiatives to Support Employment
Aozora introduced its initiatives at the Vocational Rehabilitation Workshop held by the Japan Organization for Employment of the Elderly, Persons with Disabilities and Job Seekers. We also sent an instructor to a training session run by the “Skill Improvement Project for Cooperation with Employment Support Project Organizations” under the Tokyo Metropolitan Government’s Bureau of Social Welfare and Public Health, which was attended by supporters of workers with disabilities. In addition, we have programs in place at psychiatric day care centers and labor transition support offices as a means to support preparing for the stable employment of people with disabilities who are seeking jobs.
