Mismatch Risk between Permanent Employment and the Termination of Client Contracts
First written in FY2016. 6 of 18 entries say "Materialised", first in FY2020-Q3. Latest entry: FY2026.
Open Up Group moved to the "Worse" side of this theme in 2024, 5 years after the typical company in this theme (2019).
The whole theme swung hardest in 2024: 3 of 7 companies on the "Worse" side.
2 other companies' latest entry also says "Materialised".
- FY2026MaterialisedAnnual report
「Against this backdrop, the number of employees working fell below the previous year’s level due to the effects of organisational integration and the restructuring of the sales organisation.」
The effects of organisational integration and the restructuring of the sales organisation caused the number of employees working in the construction field to fall below the previous year’s level, and the mismatch between permanent employees and customer demand and organisational structure was reflected in the results. - FY2026-H1WorsenedAnnual report
「Meanwhile, in the existing business, productivity declined in some areas as a result of organizational integration, and the number of employees assigned to work decreased. Although utilization is improving, challenges remain in improving the employee turnover rate, and the Group will implement measures to improve its business fundamentals in the second half of the fiscal year.」
In the construction field, the effects of organisational integration caused lower productivity and a decline in the number of employees working, while challenges remained in improving the turnover rate. The mismatch between securing assignments for permanent employees and the business’s demand and organisational structure continued to be evident. - FY2024-Q2MaterialisedAnnual report
「During the six months ended [the second quarter], demand for personnel in manufacturing remained sluggish. The Group continued to broadly develop clients within its sales area, increasing the number of orders, but the orders were predominantly small projects, so the number of personnel ordered declined and the number assigned to work did not increase.」
Stagnant demand in the manufacturing industry and orders concentrated on small projects were reflected in the results as a lack of growth in the number of employees ordered and working, and the mismatch between permanent employees and customer demand for work assignments continued. - FY2024-Q1WorsenedAnnual report
「During the first quarter of the consolidated cumulative period, the number of employees on staff grew steadily as a result of active recruitment investment from the previous consolidated fiscal year, and the utilisation rate remained stable at approximately 93–94%. During the first quarter of the consolidated cumulative period, the number of employees on staff increased as a result of strengthened recruitment and employee retention measures from the previous consolidated fiscal year. Contract billing rates also improved, reflecting labor supply and demand in the construction industry. Although selling, general and administrative expenses, including recruitment costs, were controlled, utilisation remained somewhat weak and employment adjustment subsidies declined, resulting in higher profit but a slight decline in the profit margin. During the first quarter of the consolidated cumulative period, revenue increased slightly due to the increase in the number of employees on staff and improved billing rates. In terms of profit, the gross profit margin declined due in part to a downward trend in working hours.」
In the machinery, electrical and IT fields, the utilisation rate was approximately 93–94%; in the construction field, utilisation was somewhat weak; and in the manufacturing field, working hours were trending downward. The mismatch between securing assignments for permanent employees and customer demand emerged differently across the fields. - FY2023-Q3MitigatedAnnual report
「During the cumulative third quarter of the current consolidated fiscal year, the number of employees grew steadily as a result of active recruitment investment since the previous consolidated fiscal year, the recovery in business conditions across a broad range of industries, and increased demand for personnel. The utilization rate also remained stable at generally above 95%.」
In the machinery, electrical and IT fields, growth in the number of employees on staff and stability at a utilisation rate above 95% continued to ease the mismatch between permanent employees and customer demand for work assignments. - FY2023-Q1MitigatedAnnual report
「During the first quarter of the consolidated cumulative period, the recovery in business sentiment in the manufacturing industry led the Group to resume active recruitment investment from the second half of the previous consolidated fiscal year. As a result, the number of employees on staff grew steadily, and the utilisation rate remained stable at generally above 95%.」
In the machinery, electrical and IT fields, growth in the number of employees on staff and stability at a utilisation rate above 95% partially eased the mismatch between permanent employees and customer demand for work assignments. - FY2022-Q2MitigatedAnnual report
「During the second quarter of the consolidated cumulative period, the number of employees working increased compared with the end of the previous consolidated fiscal year, and the utilisation rate improved, resulting in higher profit.」
In the construction field, the number of employees working and the utilisation rate improved compared with the end of the previous consolidated fiscal year, partially easing the mismatch between customer demand and the utilisation of permanent employees. - FY2021MaterialisedAnnual report
「However, the spread of the novel coronavirus disease caused overtime hours, working days and billing rates to decline. Although there were no cases of mid-contract cancellations involving engineers already assigned, demand for entry-level personnel contracted. As a result, the assignment of newly graduated and other less-experienced technical employees stagnated, particularly in the first half of the consolidated fiscal year, and the utilisation rate remained low.」
The difficulty of securing assignments for permanent employees amid shrinking customer demand was reflected in the results as stagnant assignments of less-experienced technical employees and a low utilisation rate. - FY2021-Q3MitigatedAnnual report
「During the third quarter of the consolidated cumulative period, production increased in some industries in the temporary staffing business, and the number of employees working in the second half of the third quarter consolidated accounting period increased, although the effects of low utilisation at the beginning of the period remained.」
Production increases in some industries led to an increase in the number of employees working in manufacturing-related fields in the second half of the quarter. The effects of low utilisation at the beginning of the period remained. - FY2021-Q2The number of employees working in manufacturing-related fields shows signs of bottoming outAnnual report
「During the second quarter of the consolidated cumulative period, customer production recovery remained weak even after the lifting of the state of emergency, although some customers increased production toward year-end. The number of employees working in manufacturing-related fields showed signs of bottoming out.」
Although customer production recovery remained weak, an increase in production at some customers caused the number of employees working in manufacturing-related fields to show signs of bottoming out, indicating a degree of change from the declines through the previous quarter. - FY2021-Q1MaterialisedAnnual report
「During the cumulative first quarter of the current consolidated fiscal year, customer companies showed little sign of a recovery in production even after the lifting of the state of emergency, and the gradual decline in the number of employees on assignment continued.」
With the recovery in customer production weak, the difficulty of using permanent employees to meet customers’ demand for work assignments continued, and the risk emerged in the results as a decline in the number of employees working in manufacturing-related fields. - FY2020WorsenedAnnual report
「However, the Group was unable to achieve utilisation exceeding the level of production adjustments in Japan’s manufacturing industry. As of the end of June 2020, the number of employees in this segment was 2,093, down 208 from the end of the previous fiscal year, and sales were ¥9,021 million, down 9.4% from the previous fiscal year.」
Production adjustments in Japan’s manufacturing industry and the pandemic made it difficult to secure work assignments after customer contracts ended, and this was reflected in the full-year results. The number of employees in the manufacturing-related field fell by 208, and sales declined 9.4%. - FY2020-Q3MaterialisedAnnual report
「However, the Group was unable to achieve utilisation exceeding the level of production adjustments in Japan’s manufacturing sector. As of the end of March 2020, the number of employees in this segment was 2,301, down 72 from the end of the previous fiscal year, and sales were ¥7,016 million, down 5.9% year on year.」
Production adjustments in Japan’s manufacturing sector prevented the Group from securing utilisation. The number of employees in the manufacturing-related field fell by 72 from the end of the previous fiscal year, and sales declined 5.9% year on year. The mismatch between permanent employees and customer demand for work assignments was reflected in the results. - FY2019RestatedAnnual report
「The Company works to ensure that it can always provide employees with placements through training tailored to customer companies’ needs and the development of new customer companies. However, if rapid changes in the economic environment or a loss of confidence in the Group cause contracts to end simultaneously or customer companies to stop placing orders, the Group’s performance could be affected.」
While using training and the development of new customers as measures to provide work placements, the Group continues to disclose the risk of customer contracts ending simultaneously. - FY2017RestatedAnnual report
「The Company works to ensure that it can always provide employees with placements through training tailored to customer companies’ needs and the development of new customer companies. However, if rapid changes in the economic environment or a loss of confidence in the Group cause contracts to end simultaneously or customer companies to stop placing orders, the Group’s performance could be affected.」
The disclosure continues to describe training and the development of new customers as measures for providing work placements, and the impact on performance if customer contracts end simultaneously. - FY2016First statedAnnual report
「The Group works to ensure that it can always provide employees with placements through training tailored to customer companies’ needs and the development of new customer companies. However, if rapid changes in the economic environment or a loss of confidence in the Group cause contracts to end simultaneously or customer companies to stop placing orders, the Group’s performance could be affected.」
For employees hired as permanent employees, the disclosure identifies the impact on performance if customer contracts end simultaneously as a risk.