WILL GROUP

Issues to be addressed and business risks

Issues to be addressed

For the future outlook, despite the robust demand for human resources backed by strong corporate performance, the hiring environment in Japan is becoming increasingly challenging.
Meanwhile, in Australia and Singapore, the main areas where the Group develops businesses, population and economic growth are expected to continue to expand at a moderate pace. However, there are concerns about the deterioration in economic sentiment due to inflation, rising interest rates, and the situation in the Middle East, and the Group will continue to closely monitor these developments.
In such business environment, the Group has newly formulated the Medium-Term Management Plan (WILL-being 2029), covering the three-year period from the fiscal year ending March 31 2027 to the fiscal year ending March 31, 2029.
In the light of the current and future business environment, the following issues will be addressed by the Group from a medium- to long-term perspective.

１．Domestic Working Business “Expand our talent solutions business for permanent employees and foreign workers”

To achieve the Group’s sustainable growth and enhance corporate value, it is essential to transform the business structure of the Domestic Working Business from its traditional business model, which was mainly focused on temporary staffing, to a high-margin business model. With that, the Group will focus on the essential domains* with significant labor supply-demand gaps and low risk of replacement by AI or robots, while pursuing the following three initiatives to expand its talent solutions business for permanent employees and foreign workers.
(ⅰ)Permanent employee staffing and outsourcing We will focus on essential domains with significant labor supply-demand gaps such as construction, factory, and care support, where there is strong demand for support including retention and training, to expand employee staffing and outsourcing. We will expand the business by leveraging the recruitment, placement, and retention expertise cultivated in temporary staffing as well as our customer base and nationwide network.
(ⅱ)Foreign talent management services As the number of domains such as factory, care support, accommodation, and food services, where it is difficult to secure sufficient manpower within Japan alone, continues to increase, the importance of hiring foreign workers based on proper onboarding processes is also increasing. We will leverage our industry-leading track record in providing support and its structure to provide comprehensive support from recruitment to retention, and will expand foreign talent management services that prioritize compliance.
(ⅲ) Permanent placement We will focus on essential domains such as care support, nursing, and construction, where demand for specialized personnel and permanent employees is growing and where hiring is difficult to fill through internal hiring alone. We will leverage our existing customer base cultivated through the existing businesses, as well as permanent placement operations acquired through an M&A, and will expand permanent placement as a new growth domain. Also, we will continue to expand permanent employee staffing and outsourcing and foreign talent management services, for which the effectiveness of investments was validated in the previous Medium-Term Management Plan, and will further strengthen the earnings model of the Domestic Working Business by leveraging permanent placement operations acquired through an M&A.

*Domains that are indispensable for maintaining social life and are less likely to be replaced or automated by AI. These generally include domains associated with essential workers.

２．Overseas Working Business “Strengthen profitability with a focus on productivity”

In the Overseas Working Business, both Australia and Singapore continue to face a challenging market environment due to changes in the operating environment following COVID and the impact of inflation. In addition to changes in government policies, economic conditions, and hiring demand in each country, the Group also needs to closely monitor the impact of foreign exchange fluctuations on its business performance.

Even under these circumstances, to establish an earnings base that enables the Overseas Working Business to generate stable profit, we will focus on improving productivity and disciplined earnings management, with temporary staffing and permanent placement in our areas of strength in existing countries serving as our core businesses. In Australia, we will strengthen profitability by deepening relationships with existing customers and capturing demand in high value, innovation-driven domains. In Singapore, we will leverage our existing customer base, particularly government agencies, to secure stable demand.

While carefully assessing changes in the market environment in each country, we will continue to strengthen cost control, improve sales productivity, and enhance governance. Without relying excessively on market recovery, we will thoroughly implement a business management approach focused on profitability, and aim to establish an Overseas Working Business that can generate stable profit even when taking into account external environment risks such as foreign exchange fluctuations.

３．Secure and develop human resources

Securing human resources is the cornerstone of the Group’s growth, and recruiting, nurturing, and retaining staff are critical issues for achieving competitive advantage and sustainable growth.

In October 2019, we unified the service brands of our major subsidiaries with the name “WILLOF” and implemented brand promotions to strengthen the Group’s capability of hiring. During the fiscal year ended March 2026, the Group aired TV commercials in June and October across 18 prefectures, including Kanto areas, which is our largest business area. In addition, we continuously implemented promotional strategies utilizing channels such as web commercials and social media platforms. Compared with the fiscal year ended March 2023, prior to the launch of these promotional activities, awareness, branded search volume, and willingness to use have all increased significantly.

In terms of staff development and retention, the Group will further enhance the scheme to train staff before and during the employment period that incorporates the essential skills and mindset of the client company and provide regular follow-up for staff on the job. Additionally, we will review our qualification incentive programs and compensation evaluation systems to improve staff retention rates.

４．Enhancement of sustainability

Based on our Sustainability Policy, the Group is making the following efforts to contribute to the sustainable development of our society and companies.
(ⅰ) Environmental initiatives The Group has established a climate change policy and is working to contribute to the realization of a decarbonized society. In addition, the Company supports the Final Recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) and discloses risks and opportunities of climate change on our business in accordance with the TCFD’s framework.
(ⅱ) Social initiatives We believe that in order for the Group to achieve sustainable growth, it is essential that we leverage the participation of diverse human resources, rather than allowing our thinking to be dominated by a homogeneous perspective. We provide support for each and every one of our employees so that they are able to achieve self-directed career formation irrespective of gender, age, nationality, disabilities or other characteristics. In addition, we expect that technological innovations will significantly change the types of human resources and jobs in demand, and the gap between labor supply and demand will be wider than now. Therefore, the Group will work to “maximize” and “optimize” career paths that transform workers into experts.
(ⅲ) Governance initiatives We strive to strengthen corporate governance by establishing a voluntary Nomination Committee and a Remuneration Committee, both of which are composed of a majority of independent outside directors, and by continuously evaluating the effectiveness of the Board of Directors with external advisory support.

business risks

Item （1）Dependence on specific businesses
Content The Group provides specialized human resources services (temporary staffing, business process outsourcing, and permanent placement) for each industry. A large portion of its consolidated revenue relies on existing domains within the Domestic Working Business, particularly the three main domains of human resources services (sales outsourcing domain, call center outsourcing domain, and factory outsourcing domain). If revenue from these three domains were to decline significantly due to changes in the business environment or other factors, it could have an adverse impact on the business performance of the Group.
The Group is promoting the growth of new potential pillars such as the nursing care domain and the construction management engineer domain in the Domestic Working Business, as well as the Overseas Working Business because the ratio of revenue attributable to the three main domains is expected to decline. However, if this transition does not progress as planned and the dependence on these main domains remains high, fluctuations in their revenue could adversely affect the Group’s business performance.
Countermeasures We promote the growth of potential next-generation pillars such as the nursing care domain and the construction management engineer domain in the Domestic Working Business, as well as the Overseas Working Business, and continue efforts to diversify the business portfolio while maintaining a balanced structure.
Item （2）Business licenses and permits
Content If the Group were to commit a serious legal violation and have its licenses revoked or operations suspended, it could hinder its core business activities and adversely affect its business performance.
（Worker dispatching business）
We conduct our temporary staffing business in Japan after obtaining a license from the Minister of Health, Labour and Welfare under the Act on Securing the Proper Operation of Worker Dispatching Businesses and Protecting Dispatched Workers (hereinafter the “Worker Dispatching Act”). The Worker Dispatching Act stipulates that, in order to ensure the proper operation of the worker dispatching business, the business license may be rescinded or the business may be suspended in whole or in part, if any of the grounds for disqualification as a dispatching business operator or grounds for revocation of the license concerned are met.
（Job placement business）
We conduct our permanent placement business in Japan after obtaining a license from the Minister of Health, Labour and Welfare under the Employment Security Act. As in the case of the Worker Dispatching Act, the Employment Security Act stipulates that the business license may be rescinded or the business may be suspended in whole or in part, if any of the grounds for disqualification as a provider of paid employment placement services or grounds for revocation of the license concerned are met.
Countermeasures To ensure proper business operations, the Group continuously enhances its frameworks, including internal training programs and operational systems related to corporate compliance, in accordance with relevant laws and regulations in each country. The Group also monitors compliance with applicable laws through regular internal audits and makes ongoing efforts to prevent any legal violations.
Item （3）Securing human resources
Content （Employees）
Securing and developing talented employees is a key management issue for the Group to maintain competitive advantage, respond to changes in the business environment, and achieve sustainable growth. The Group’s business is founded on human resources, and employee engagement and job satisfaction are crucial factors that significantly impact service quality, productivity, customer satisfaction, and other related elements. However, if the Group fails to make progress in securing or developing such talent as planned, or if declining employee engagement leads to higher turnover and lower productivity, its business performance may be adversely affected.
（Staff）
Securing staff is one of the key elements in the Group’s business activities. The recruitment, development, and retention of staff is a critical issue for the Group’s continued growth.
Countermeasures （Employees）
The Group strives to prevent the outflow and ensure the retention of talented employees by building a supportive working environment through the creation of a corporate culture where diverse personnel can thrive and the development of various internal systems, and actively providing opportunities for challenge and growth. In addition, the Group aims to enhance its recognition and credibility by strengthening our corporate branding. Furthermore, the Group regularly conducts job satisfaction surveys, placing significant emphasis on changes in our “Job Satisfaction Score” as we implement various initiatives to enhance job satisfaction. Moreover, HR Management Partners (HRMPs) dedicated to specific business collaborate with each business unit in recruitment, training, and appropriate personnel placement, working to reinforce the human resource foundation that underpins business growth. For our policies to address these risks, please refer to “Section 2 Overview of business, 2 Disclosure of sustainability-related financial information, (3) Human capital strategies, metrics, and targets” in the Annual Securities Report (only in Japanese).
（Staff）
The Group diversifies recruitment methods by placing emphasis on our proprietary web-based recruitment media. The Group also implements measures such as online registration and counseling, refer-a-friend campaigns, and the establishment of recruitment centers. In addition, the Group endeavors to win projects for non-full-time workers, such as housewives, seniors, and international students, including positions with fewer than five working days per week or shorter working hours. For our policies to address these risks, please refer to “Section 2 Overview of business, 1 Management policy, business environment, issues to address, (4) Issues to be addressed by the company, iii Securing and developing talented employees” in the Annual Securities Report (only in Japanese).
Item （4）Revisions to laws and regulations
Content Laws and regulations in the countries and regions where the Group operates may be revised in response to changes in the labor market environment and other factors. In particular, the Worker Dispatching Act is revised from time to time regarding matters such as the types of work subject to dispatch and the maximum period of dispatch. Depending on the content of such revisions, the Group’s business performance may be adversely affected.
（Social insurance system）
The Group ensures that, in addition to its employees, all staff who meet the eligibility requirements are enrolled in social insurance. As insurance premium rates and coverage are subject to revisions based on social and economic conditions, a significant increase in the Company’s contribution due to changes in the social insurance system could adversely impact the Group’s business performance.
（Labor Contracts Act）
The revised Labor Contracts Act, which came into effect in April 2013, introduced a mechanism under which fixed-term employment contracts that commenced on or after the effective date and have been renewed for more than five years in total may be converted into permanent employment contracts (employment contracts with no fixed term) upon application by the worker. Under this new system, when the Group hires temporary or other staff under permanent contracts, labor and other associated costs arise during the waiting period until an assignment at a client company is secured.
In addition, the law on equal pay for equal work, which came into effect on April 1, 2020, requires equal and balanced treatment regardless of employment type, and mandates the correction of any unreasonable disparities in treatment. If similar revisions to laws and regulations occur in the future, they may impact the business performance of the Group, depending on the content thereof.
Countermeasures ・The Group’s legal affairs department constantly monitors revisions and trends in laws and regulations related to its business operations. When the need to respond arises, relevant information is promptly communicated to the related parties, and management decisions are made in a timely and appropriate manner.
・To mitigate the risk of rising costs such as wages and social insurance premiums for temporary workers and others due to legal revisions, the Group ensures that increased costs are properly reflected in billing rates and engages in appropriate negotiations with client companies to revise pricing. In particular, for non-fixed-term staffing business models, under the supervision of responsible business managers, the Group continues to implement and monitor efforts to maintain appropriate billing rates, thereby striving to ensure profitability.
Item （5）Intensifying competition
Content ・The human resources services industry to which the Group belongs is characterized by the presence of numerous competitors. If competition further intensifies, it may have an adverse impact to the Group’s business performance.
・If the Group fails to respond to technological innovation, changes in customer needs or preferences, or loses competitiveness due to mergers or consolidations among competitors, the Group may lose its market share.
Countermeasures ・The Group strives to differentiate itself from competitors and enhance a high level of customer satisfaction by first identifying client needs, then recruiting staff capable of meeting those needs, and providing accurate and prompt responses.
・To maintain our competitiveness, the Group focuses on expanding customer mind share and in-store share by proposing initiatives such as strengthening supply capabilities, enhancing labor management, and converting temporary staffing into outsourcing, thereby striving to maintain and improve profitability.
Item （6）Future acquisitions of companies or businesses
Content ・Mergers and acquisitions (“M&A”) are regarded as one of the Group’s key management strategies. However, M&A inherently involves various risks, such as operational disruptions or performance declines caused by deficiencies in post-merger integration processes, frictions arising from differences in corporate cultures, employee turnover, and internal conflicts. If the Group is unable to properly execute post-merger integration (“PMI”) as planned following an acquisition, the value of acquired assets may be impaired, potentially resulting in losses. Such events could have an adverse impact on the Group’s business performance.
・Goodwill arising from M&A may be reduced to its recoverable amount, if it is determined that the carrying amount is unrecoverable, and the amount of the reduction may be recognized as a loss. Accordingly, depending on the expected future cash flows of the business to which the goodwill pertains, an impairment loss may be recorded, which could have an adverse impact on the Group’s business performance.
Countermeasures ・In order to maximize the intended effects upon completion of M&A, the Group considers it extremely important not only to conduct thorough due diligence but also to carry out PMI appropriately. Accordingly, PMI plans are developed promptly and with a long-term perspective.
・To ensure the appropriateness of valuations during M&A considerations, the Group conducts thorough reviews in collaboration with third-party institutions. Furthermore, the Group carefully formulates post-acquisition business succession plans, enhances the monitoring of PMI execution, and engages in management-level discussions to address improvement if there are any changes in the recoverability of goodwill, thereby mitigating the risk of impairment losses.
Item （7）International business development
Content The Group advocates the global business development, and currently operates offices in Singapore, Malaysia, Australia, the United States, China, Vietnam, the United Kingdom, Germany, and Switzerland. In these overseas operations, the Group is exposed to country risks, including economic fluctuation risk, foreign exchange fluctuation risk, government regulations, political instability, and restrictions on fund transfers in each respective country.
If such unforeseen circumstances arise, they may have an adverse impact on the Group’s business performance.
Countermeasures ・The Group has established an intermediate holding company in Singapore as a control office. Through this office, the Group regularly gathers information on changes in the business environment (legal revisions and the latest developments by local authorities in each country), and promotes businesses by taking risk mitigation measures for each local project, including the prevention of asset concentration.
・In the business development, the Group works in close coordination with legal and tax advisors in the relevant countries, striving to mitigate risks through early-stage country risk assessments and professional guidance on a regular basis.
Item （8）Handling of personal information
Content Due to the nature of its business, the Group holds personal and confidential information, including data on registered temporary staff and job applicants. If such information is leaked externally due to unforeseen circumstances and the information provider suffers from damage, the business performance of the Group may be adversely affected by claims for damages, loss of social credibility, or sanctions under the EU General Data Protection Regulation (GDPR).
Countermeasures ・In handling personal information, the Group takes thorough precautions in accordance with the Act on the Protection of Personal Information, which was amended in April 2022. These measures include developing internal systems, conducting regular training, and strengthening information management. Some Group companies have also acquired certifications such as the PrivacyMark and Information Security Management System (ISMS) to objectively validate the Group’s level of information management. In addition, the Group takes risk mitigation measures such as subscribing to personal information leakage insurance for unforeseen incidents.
・The Chapman Consulting Group Pte. Ltd., a subsidiary with offices in Europe, has established and operates internal guidelines in accordance with the GDPR. The Group also follows the guidelines based on the Personal Data Protection Act in Singapore, and those aligned with personal information protection laws in Australia.
Item （9）Risks related to compliance with laws and regulations
Content （General risks）
The Group’s business activities are subject to a wide range of laws and regulations, including various domestic laws such as the Act on Securing the Proper Operation of Worker Dispatching Businesses and Protecting Dispatched Workers, Employment Security Act, Labor Standards Act, Industrial Safety and Health Act, Industrial Accident Compensation Insurance Act, Health Insurance Act, and Employees’ Pension Insurance Act, as well as various laws and regulations in countries where the Group operates such as equal employment opportunity laws. The Group is also subject to regulations related to new business domains. Despite implementing necessary measures, the Group may not be able to fully eliminate the compliance risks including misconduct by officers, employees, or staff of group companies, as well as the risks of losing social credibility such as human rights violations. These factors may have an adverse impact on the Group’s business performance.
（Risks of serious lawsuits, etc.）
The Group is mainly engaged in temporary staffing and permanent placement businesses. In the process of conducting its business activities, the Group may be subject to lawsuits or other legal proceedings brought by client companies, job seekers, competitors, or other related parties concerning inadequacies in the services provided, leakage of personal or confidential information, or infringement of intellectual property rights. In addition, we may be subject to investigation or punishment by the authorities, etc. These legal proceedings could result in significant expenditures or disrupt the Group’s business activities. Such proceedings may be prolonged and costly, and their outcomes can be difficult to predict. As a result, they may have an adverse impact on the Group’s business performance.
Countermeasures ・The Group recognizes legal compliance as a critical corporate responsibility and strengthens its compliance framework to ensure thorough adherence to relevant laws and regulations (by measures such as expanding training programs and conducting surveys).
・In the event of legal action such as the filing of a lawsuit, the dedicated department (the legal affairs department) works in coordination with external experts to take timely and appropriate action.
Item （10）Impact of natural disasters and contingencies
Content The Group operates sales offices throughout Japan and overseas, with a focus on Australia and Singapore. In the event that natural disasters such as earthquakes, typhoons, and tsunamis, or other contingencies such as large-scale fires and power outages, outbreaks of novel infectious diseases, terrorist attacks, and international conflicts occur in these regions, the Group’s business activities may be disrupted due to the suspension of office functions, operational restrictions on employees and temporary staff, or stagnation in the business activities of client companies. Consequently, any resulting damage may have an adverse impact on the Group’s business performance.
Countermeasures To prepare for natural disasters, such as major earthquakes and floods, as well as outbreak of infectious diseases, the Group has established a crisis management system to confirm the safety and whereabouts of employees and dispatched staff. In addition, the Group has implemented business contingency measures, including decentralizing business site functions and migrating information assets to the cloud.
Item （11）Risks of information systems
Content The business activities of the Group depend on IT systems including computers and the network, and some of the development, maintenance, and management of these IT systems are outsourced to third-party service providers. By utilizing highly-rated data centers and cloud services, the Group ensures system availability in the event of major natural disasters such as large-scale earthquakes and maintains remote work environments. In addition, the Group has implemented countermeasures against external cyberattacks and unauthorized access to ensure business continuity. However, in the event of a large-scale system failure due to unforeseen causes, the Group’s business operations could be adversely affected.
Countermeasures ・To ensure system availability in the event of natural disasters such as large-scale earthquakes, the Group has built its core operational systems in Tier 4-level data centers. In addition, remote work environments have been established to maintain business continuity in situations where employees are unable to come to the office due to transportation disruptions or infectious disease outbreaks.
・To minimize the operational impact of large-scale system failures and ensure the implementation of effective recurrence prevention measures, the Group has defined a system failure response policy in its “IT management regulations” and has established a system failure management framework.
・When selecting new third-party providers for IT development, maintenance, or management, the Group follows its “vendor selection checklist.” This includes prior verification of whether the vendor has experience with projects of similar content and scale, thereby ensuring the quality of the outsourced systems.
Item （12）Changes in environment surrounding the industry
Content In many of the markets where the Group operates, the rapid advancement of IT technologies in recent years has accelerated the shift toward online services utilizing the internet. As a result, conventional barriers to entry, such as human-driven sales capabilities and logistics networks have been lowered, making it relatively easier for users to switch between services. Furthermore, online communication through social media is expected to become increasingly active both in Japan and overseas, enabling more direct matching between clients and users. Particularly in temporary staffing and permanent placement businesses, market competition may intensify, potentially making it difficult to maintain the Group’s current market share, thereby adversely affecting its business performance.
Countermeasures The Group implements various initiatives to expand its earnings base, such as measures to enhance service capabilities and brand strength in its existing business domains, as well as leveraging corporate venture capital to capture newly emerging business opportunities. In October 2019, the Group unified the service brand of its major domestic subsidiaries under the name “WILLOF” to enhance overall brand recognition and improve service quality of the entire Group. By promoting the “Chance-Making Company” branding, the Group aims to raise awareness among job seekers.
Item （13）Dilution of share value
Content The Company grants share acquisition rights to officers and employees of the Group. If these share acquisition rights are executed, additional Company shares will be issued, which may dilute the value of the shares and the percentage of voting rights held by existing shareholders. The number of shares under share acquisition rights are described in “Section 5 Status of accounting, 1 Consolidated financial statements, etc., Notes to consolidated financial statements, 17 Share-based payment” in the Annual Securities Report (available in Japanese only).
Countermeasures The exercise of the share acquisition rights issued by the Company is conditioned upon the achievement of predetermined performance targets, and the Company recognizes that achieving these targets will contribute to enhancing its corporate and shareholder value. Therefore, the Company considers that the issuance of these share acquisition rights contributes to the interests of our existing shareholders and that the resulting impact of share dilution is reasonable.
Item （14） Financing
Content The Group raises a portion of its business capital through borrowings from financial institutions. Should the Group become unable to raise funds on favorable terms and in a timely manner due to factors such as recession, deterioration in financial markets, rising of interest rates, a decline in the Group’s creditworthiness, or a worsening business outlook, its financial conditions and business performance may be adversely affected.
Countermeasures To prepare for potential situations where required funding cannot be obtained, the Group strives to maintain a certain level of liquidity on hand at all times. Going forward, in light of the recent rise in interest rates and the possibility of further increases, the Group will consider measures to mitigate interest rate risks, such as fixed-rate financing and interest rate swaps, while closely monitoring market trends.
Item （15）Risk of economic fluctuations
Content Since the Group’s performance is generally affected by economic conditions in Japan as well as overseas, particularly in Australia and Singapore, a prolonged economic slowdown, including reduced hiring demand and consumer spending, may have an adverse impact on the Group’s business performance.
Countermeasures The Group’s business domains are centered on sectors that are relatively resilient to economic fluctuations, such as food processing factories, nursing care facilities, and the construction industry in Japan, as well as government and public projects overseas. Going forward, the Group will work to establish a business that is even less susceptible to economic trends by reinforcing our sales efforts in these essential fields required to maintain social life, and by strengthening our profitability through productivity improvements. When necessary, the Group takes necessary measures such as reducing fixed costs, restraining IT and new business investments, and securing sufficient cash and deposits, in order to swiftly stabilize management.

Management Policy