Changes in the Career-Change Market and Hiring Trends Due to Economic Fluctuations

「During the second quarter of the current consolidated fiscal period, the situation in the Middle East affected revenue, mainly in the manufacturing sector, but placement conditions in that sector have been recovering since April.」

「Under these circumstances, the domestic recruitment business, which accounts for approximately 90% of the Group's consolidated revenue, maintained strong performance in the IT sector, including AI-related services, the consulting sector, and the financial sector, which is benefiting from higher interest rates. However, due to a decline in contract value in the manufacturing sector during the first quarter, consolidated revenue for the current interim period ended slightly below the initial plan.」

「As employee treatment improved, particularly at large companies, against the backdrop of the government's requests for wage increases and other factors, labor mobility in the employment market slowed, and revenue for the first quarter cumulative consolidated period fell below the initial plan.」

「Hiring restraint that had continued since last autumn at some US IT and consulting companies and major Japanese IT companies affected the digital division of the Group's core domestic personnel placement business. As a result, Group-wide revenue for the third quarter cumulative consolidated period increased 15.6% year on year but fell below the initial plan.」

「Meanwhile, restraint on employee hiring intensified, particularly among foreign-affiliated companies and major IT companies. The Group's core domestic personnel placement business was also affected, and Group-wide revenue for the first quarter cumulative consolidated period came in slightly below the initial plan.」

「In Japan's economy during the current consolidated fiscal year, although the impact of COVID-19 declined, uncertainty about the outlook for the global economy, particularly in Europe and the United States, increased because of the prolonged situation in Russia and Ukraine, global inflation and the resulting monetary tightening. In the December Tankan survey, sentiment among large companies deteriorated for the fourth consecutive quarter. Against this backdrop, some foreign-affiliated companies began to hold back on hiring employees, but many companies in Japan moved to hire employees in pursuit of renewed business growth and greater diversity in human capital, and the effective job-openings-to-applicants ratio remained firm.」

「Since the beginning of the current consolidated fiscal year, the impact of COVID-19 on this business has also declined」

「However, the April declaration of a state of emergency made companies' postponement of hiring and the decline in the number of job openings in the market more pronounced. We were also forced to proceed through trial and error as we shifted to company-wide remote work, and placement results in this business during the second quarter consolidated accounting period declined substantially year on year.」

「However, particularly in Japan, after the declaration of a state of emergency, and similarly overseas, progress increasingly slowed in both our business activities and the hiring activities of companies with open positions, and the number of job openings also declined.」

「However, particularly in Japan, after the declaration of a state of emergency, and similarly overseas, progress increasingly slowed in both our sales activities and the hiring activities of companies with open positions, and the number of job openings also declined.」

「However, customer companies, particularly in the manufacturing sector, became increasingly cautious about hiring as changes in economic conditions anticipated at the beginning of the fiscal year unfolded. Although the measures described above were put in place, they took time to implement fully, and the combined effects were reflected in the Group's operating results.」

「The Group's core domestic personnel placement business reflected strong placement results in the fourth quarter of the previous fiscal year, and consolidated revenue and profit for the first half of the current fiscal year exceeded the forecasts. However, growth slowed in the third quarter, particularly in the division responsible for manufacturing. Overseas operations also saw a marked strengthening of the same trend across the Japanese manufacturing sector in many countries.」

「The Group's core domestic personnel placement business reflected strong placement results in the fourth quarter of the previous fiscal year, and produced steady revenue and profit in the first quarter of the current fiscal year. Although placement results subsequently slowed in the second quarter, particularly in some manufacturing sectors, consolidated revenue and profit for the first half exceeded the forecasts.」

「Meanwhile, amid increasing instability in international conditions, some companies, particularly in manufacturing, began to suspend employee recruitment. Although this trend had not yet spread across all industries, the Company regarded the situation as one requiring caution, and it had some impact on contract-closing activities in the first quarter.」

「The employment market is affected by changes in hiring trends associated with economic fluctuations. If the economy fluctuates beyond expectations, this could affect the Group's operating results.」