Japan Markets ViewWork Style Reform impacting on business performance – the Smart Work Management Survey

 

There are new discoveries when we look at the financial results announcements of companies in Japan from a different angle other than the business results. QUICK Corp. in collaboration with SCRIPTS Asia Inc., provides transcripts of investor events of listed companies in Japan. Based on the transcripts, we investigated the progress of their Work Style Reform.

 

■ Savings of as much as JPY400mn
We reviewed the transcripts of the earnings meetings held over the period of 26-30 April, 2021 to see if the transcripts had words such as ‘work style’ or ‘remote work’. Although only 12* out of 55 companies mentioned in their meetings, there were some cases they contributed to better business performance through implementing Work Style Reform.

 

For example, Z Holdings Corp. (4689) stated during their earnings meeting that “We have shifted to the online based working style. On average 95% of their employees have been working remotely, and are still able to maintain their work productivity and engagement levels with the company.” This statement shows how deep remote work has now penetrated.

 

METAWATER Co., Ltd. (9551), a major player in the water treatment industry, is offering a choice of four-day workweek to the employees from 2019. The company was invited by the government and explained this measure. Depending on the job profile, and if employees desire, the company is considering extending the retirement age up to 75 years old. The company stated that they were able to save around JPY400mn (for the fiscal year ended March 2020) through cost improvements as a result of Work Style Reform.

 

■ Companies with high ratings on the ‘Human Resources’ outperformed TOPIX
Companies that promote Work Style Reform are highly evaluated in the stock market. The ‘Nikkei Smart Work Management’ survey is conducted by Nikkei Inc. for evaluating the initiatives to Work Style Reform taken by companies.

 

In the same survey in 2020, the following seven companies received the highest score on the ‘Human Resources’ which evaluates their work styles.

 

 

For all these seven companies, we compared their composite index against the TOPIX performance from the end of last year to the end of this April. The composite index rose by 9% outperforming TOPIX (5% up).

 

 

Work Style Reform will not only lead to cost reductions and other benefits, but might positively contribute to medium to long-term business performance, and companies also now know that very well. Last week, FUJITSU Ltd. (6702) announced its financial results for the fiscal year ended March 2021 stating that “we have successfully achieved cost reduction as a result of decreased expenditure on commuting and business trips.” They are also aggressively implementing growth investments in fiscal year 2021. In addition to the investments on their own DX (Digital Transformation), they are focusing on investing in acceleration of Work Style Reform.

 

We will be closely following the company’s earnings announcements watching their progress in Work Style Reform.

 

*We selected only those companies that mentioned their own work style or remote work initiatives.

 

What is Smart Work Management?
It is a management strategy that aims to optimize the performance of an organization through ‘Human Resources’ backed by diverse and flexible work styles, ‘Innovation’ that creates new business opportunities, and ‘Market Development’ for expanding to newer markets. It is defined by the Nikkei Group and ‘Nikkei Smart Work Management Survey’ is conducted to comprehensively evaluate listed companies from these three perspectives. It increases employee productivity through Work Style Reform and helps companies strengthen their competitiveness.

 

QUICK Data Factory
https://corporate.quick.co.jp/data-factory/en/product/data005/

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