WILL GROUP

Issues to be addressed and business risks

Issues to be addressed

The outlook for the future remains uncertain, due to risks such as prolonged global inflation and tight monetary policy as well as geopolitical risks related to the situations in Ukraine and the Middle East, although the domestic and overseas economies are expected to grow gradually. In Japan, despite the robust demand for human resources backed by strong corporate performance, the hiring environment is becoming increasingly challenging. Meanwhile, in Singapore and Australia, the main areas where the Group develops businesses, the rapid increase in post-COVID-19 demand for human resources has run its course and reduced hiring by major clients is becoming prolonged.
In such business environment, the Group has formulated a Medium-Term Management Plan “WILL-being 2026” (hereinafter the Medium-Term Plan), which ends in the fiscal year ending March 31, 2026, and we have been working toward achieving sustainable growth.
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.Re-growth of the Domestic Working Business

For sustainable growth of the Group, stimulating growth in the stagnant Domestic Working business segment is important. Therefore, we will strive to work on the following two issues in particular.

(1) Further expansion and profit generation in the construction management engineer domain

The construction management engineer segment achieved profitability in the fiscal year ended March 2025 as planned. Expecting continued growth, we have positioned this sector as one of the pillars of our businesses in the fiscal year ending March 31, 2026.

(2) Resumption of growth in Domestic Working Business (excluding the construction management engineer domain)

We will work to expand foreign talent management service and assignment for permanent employee staffing. For the expansion of foreign talent management service, we will strengthen the acquisition of new orders by increasing the number of sales personnel, and for local hiring, we will strengthen alliances with local corporations, schools, etc. For expansion of assignment for permanent employee staffing, we will extend the recruiting know-how cultivated in the construction management engineer domain and sales outsourcing domain to the factory outsourcing domain. In addition, in anticipation of a tougher hiring environment in the future, we will implement brand promotions to strengthen our own brand.

2.Stable growth in Overseas Working Business

The future of the permanent placement market is uncertain in both Singapore and Australia, with reduced hiring by major clients becoming prolonged after the post-COVID-19 surge in placement demand has run its course. In this situation, we will work to expand permanent placement sales once demand recovers, while securing talented consultants. In order to reduce downside risk and improve business stability, we will also work to increase temporary staffing sales in stable areas such as government while also exercising cost control and strengthening governance.

3.Acquisition and Development of 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. In the fiscal year ended March 2025, the Group aired TV commercials across 18 prefectures, including Kanto areas, which is our largest business area. In addition, we launched promotional strategies utilizing channels such as web commercials and social media platforms. Following these initiatives, the number of branded searches for WILLOF is on an upward trend. Given the anticipated increase in recruitment through owned media channels, we will continue these promotional activities. Through these implementations, we will work to enhance brand recognition and improve the hiring capability for the Group as a whole, so our overall hiring capabilities are reinforced.
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.

(1) Environmental initiatives

Along with strengthening our resilience against disasters, we have established Environmental Policies on climate change and are promoting initiatives to contribute to the achievement of a decarbonized society. We have expressed our support for the Task Force on Climate-related Financial Disclosures (TCFD) recommendations and joined the TCFD Consortium in January 2023 to disclose climate-related information based on the TCFD framework.

(2) 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.

(3) Governance initiatives

We strive to strengthen corporate governance by establishing both voluntary a Nomination Committee and a Remuneration Committee, The majority of whose members are independent outside officers, and by continuously evaluating the effectiveness of the Board of Directors with outside advice.

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. If the Group fails to secure or develop such talent as planned, its business performance may be adversely affected. In addition, if key personnel were to leave for competitors or if the Group experienced a higher-than-expected turnover rate, this could also have a negative impact on its business performance.
（Staff）
Securing staff is one of the key elements in the Group’s business activities. The recruitment and development of staff is a critical issue for the Group’s continued growth.
Countermeasures （Employees）
The Group strives to prevent the outflow of talented employees by creating a workplace environment where diverse personnel can thrive and by developing various internal systems. In addition, the Group works to secure talented personnel by enhancing our brand recognition and credibility through corporate branding initiatives.
（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.


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, laws in Japan regarding the types of work subject to dispatch and the maximum period of dispatch are revised from time to time. 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 may 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. In such cases, an increase in cost of revenue ratio or other factors may impact the business performance of the Group.
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 competitiveness and to expand customer mind share and in-store share, the Group proposes initiatives such as strengthening supply capabilities, enhancing labor management, and proposing to convert 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.
・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 has sales offices throughout Japan and in various countries around the world, with a focus on Singapore and Australia. In the event of natural disasters such as earthquakes, typhoons, and tsunamis, or other contingencies such as large-scale fires and power outages, outbreak of novel infectious diseases, terrorist attacks, and international conflicts, the Group’s business activities may be disrupted. As it is difficult to fully prevent or avoid such events, 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.


項目 （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 “5. Status of accounting, 1. Consolidated financial statements, etc., Notes to the consolidated financial statements, 17. Share-based payment” in the annual securities report (available in Japanese only).
Countermeasures In the event of issuing new shares in the future, the Company will give careful consideration to minimize the dilution of earnings per share, including confirming relevant standards and making comparisons with other listed companies.


項目 （14） Financing
Content The Group raises a portion of its business capital through borrowings from financial institutions, etc. 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.


項目 （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 Singapore and Australia, 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 seeks to mitigate the impact of economic fluctuations to its business performance by strengthening sales efforts in industries less affected by the economic cycle, such as nursing care, construction, foreign talent management service in Japan, and government-related projects overseas.
・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