Message from the Chief Human Resources Officer
Our employees and teams that embrace challenges are the driving force behind DENSO. We create social value through the ability of our employees and organizations to turn ideas into reality.
Yasuhiko Yamazaki
Executive Vice President
Chief Human Resources Officer (CHRO)
Outline of Efforts to Strengthen Human Capital
The foundation of DENSO’s management lies in balancing the happiness of all employees with the realization of the Company’s philosophy, while striving for the sustainable enhancement of corporate value. Under “PROGRESS,” a vision and action plan for our people and organization, DENSO’s ideal employees are professionals committed to taking on the challenge of achieving new personal bests, while the Company’s ideal organization provides a platform for co-creation initiatives and the interaction of diverse professionals. We promote human capital-focused management, with the maximization of the value of human capital at the core of management, while reforming our human resource policies and systems.
DENSO’s Approach to Human Capital-Focused Management
Since its establishment in 1949, DENSO has viewed people as the most important form of management capital and practiced human capital-focused management that values people. In 1954, DENSO established technical training schools to strengthen its technologies and skills, marking the beginning of its focus on human resource development. Through these efforts, we have continuously honed our ability to turn ideas into reality, i.e., the ability to create things that did not previously exist in this world. As a result, DENSO has created over 180 world-first technologies and products. Marking its 75th anniversary in 2024, DENSO recognizes the importance of returning to its founding roots during this period of rapid change. We are determined to improve corporate value further by enhancing the ability of our people and organizations to turn ideas into reality.
I believe that the key to putting human capital-focused management into practice is linking human resource strategies with business and management strategies. This involves clearly defining how activities that enhance the value of human capital (input) lead to specific results (output) that ultimately contribute to business and financial value, and by extension, the creation of new value for society (outcome). This approach embodies the principle we have upheld since our founding: “Monozukuri is Hitozukuri (Our performance relies on our people).” This, I believe, is the essence of DENSO’s human capital-focused management.
Our Approach to Human Capital-Focused Management
(Value Creation Path)
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Activities (Input)
Activities encompass reforms to our human resource policies and systems under the “PROGRESS” vision and action plan for our people and organization. These reforms include helping employees realize their career goals, promoting learning and growth, and creating open workplaces full of vitality. We are also changing welfare benefits that no longer align with the times and environment and increasing investments in activities that effectively enhance the value of human capital while efficiently generating funds.
Results (Output)
From the perspective of our people, our goal is to have more employees feel that working at DENSO is a positive experience and that their dreams have come true. Essentially, our goal is to improve employee engagement. From an organizational standpoint, the objective is to move ahead with the transformation of our human capital portfolio with the quality and quantity of talent necessary to achieve our business and management strategies. We have set specific KPIs, clarified issues, and are working to increase the speed of addressing these issues.
Value (Outcome)
From the perspective of our people, outcomes are the value we create for our customers and society as a result of fully developing our human resources to maximize their potential. From an organizational standpoint, our goal is to balance the realization of profitability and the “green” and “peace of mind” principles through the inclusion in our business portfolio of growth businesses as replacements for businesses involved in the de-emphasis and discontinuation of internal combustion engine products. Essentially, this entails reforming our business portfolio. As a part of management, we continuously assess whether all people and organizations at DENSO are sustainably delivering value that pleases our customers and society—essentially, whether the ability of our employees and organizations to turn ideas into reality is improving. To this end, DENSO has established the “productivity of investment in human capital”* as a key indicator to monitor trends.
* Productivity of investment in human capital: Added value ÷ Investment in human capital
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We believe that the ability of our employees and organizations to turn ideas into reality (productivity of investment in human capital) can be enhanced through better employee engagement and having the quality and quantity of talent needed to achieve business and management strategies (transformation of the human capital portfolio). Higher levels of engagement translate into a collective of individuals striving to achieve ambitious goals, and the transformation of the human capital portfolio means a stronger ability to achieve success as an organization. We are therefore committed to seeing progress on these two fronts as the results (output) we aim for in human capital-focused management.
Enhancing Employee Engagement
Improving the engagement of our approximately 160,000 employees working worldwide is one of our most important management challenges. With employee engagement positioned as a KPI for sustainability management, we regularly assess the current state of employee engagement at Group companies, visualize issues, and take actions to address them.
At DENSO CORPORATION, we conduct an annual engagement survey that covers all employees and workplaces. The results of this survey are scientifically analyzed to identify factors that contribute to improving engagement and ultimately enhance the ability of our employees and organizations to turn ideas into reality. We also identify issues from various angles, such as line of work and age group, and take actions that contribute to the overall vitality of the workforce.
From the survey results, we identified five factors that contribute to higher levels of engagement. Of these, three key factors—career realization, real sense of growth, and attitude toward work—motivate employees to take ownership and action in their own careers and roles. We understand that it is especially urgent to engage with young employees (employees younger than the average age of all employees), skilled employees, and female employees. With this in mind, we have implemented the following initiatives, resulting in significant improvement in engagement with these types of employees from fiscal 2023 to fiscal 2024.
Young employees
DENSO has created a systematic training program as part of the onboarding process for the first three years after a young person joins the Company. This includes creating a supportive environment within the workplace to accelerate early skill acquisition while fostering a mindset that encourages young employees to take ownership of their career paths. Additionally, we have launched a program for dispatching young employees on external internships in other industries to gain challenging practical experience early in their careers. Ultimately, our goal is for new graduates who join DENSO to quickly develop into top-level talent able to perform on the world stage.
Skilled employees
In light of the need for reskilling and an increase in job transfers associated with the transformation of our business portfolio, we have implemented career training for 10,000 employees working in skilled labor positions. This training aims to enhance their adaptability to change and support their pursuit of independent and autonomous careers, moving beyond growth based solely on instruction and guidance from supervisors.
Female employees
For the first time since its founding, in fiscal 2025 DENSO is revamping the system for general staff (administrative positions), which has historically been focused on routine and support tasks. We will integrate general positions and career-track positions into a new job-based role system. By removing barriers in evaluation, training, and workstyles, we aim to maximize the motivation and abilities of approximately 1,800 general staff, fostering a real sense of growth and career success.
Of the five factors that elevate engagement, the remaining two factors—openness of the workplace and corporate policies —entail actions to improve the awareness and behavior of management that influence the organization. In addition to ongoing and proactive activities to address issues identified in the survey results and employee–management meetings grounded in mutual trust, we began providing multifaceted feedback to approximately 3,000 managers in fiscal 2024. This initiative aims to enhance self-awareness among management and encourage improvement in behavior through self-reflection. Furthermore, to deepen the understanding of Company policies and encourage autonomous thinking and actions in workplaces and among employees, DENSO held Conversations with Our President and Vice Presidents in April 2024, where senior management directly communicated and engaged in dialogue with workplace leaders.
Additionally, we are strengthening support for employee health and well-being as well as work–life balance, including childcare and caregiving, as the basis for a good work environment. We have enhanced our health consultation system, offering health guidance for employees at their workplace, and offer personalized health guidance to employees interested in maintaining and improving their health, especially for preventing metabolic syndrome. We are also working to create a workplace environment and foster a work culture that makes it easier to balance work with childcare. The percentage of male employees taking childcare leave has increased to 53% as of fiscal 2024, and we aim to increase this to 70% in fiscal 2025.
As a result of these initiatives, the responses in the annual employee engagement survey have improved, centered on the five factors that lead to better employee engagement. The overall positive response rate in DENSO CORPORATION’s engagement survey has improved from 70% in fiscal 2022 to 75% in fiscal 2024. We are targeting 78% in fiscal 2026. The factors that have led to better engagement vary depending on the region, country, and work environment. At each Group company, we are also implementing activities tailored to improving employee engagement based on the actual work conditions of employees in each region and country.
Transforming the Human Capital Portfolio
In alignment with the Companywide strategy of transforming the business portfolio, we are actively engaged in transforming the human capital portfolio through the acquisition, development, and optimal allocation of talent to ensure that we have the needed quality and quantity of human resources.
From the standpoint of quality in human resources, we have defined 535 categories of expertise required across 40 fields Companywide. Approximately 15,000 administrative and technical employees have clarified their career goals and areas for skill development during discussions with their supervisors, referring to categorization on five levels. Based on this, we have set up human resource development committees in key areas, such as software, systems, digital technology, and semiconductors, to implement development and allocation strategies that enhance expertise. From the standpoint of quantity in human resources, by fiscal 2026, we plan to shift a large number of personnel, around 4,000 employees, to the vehicle electrification and software domains, which are priority areas, through external and internal recruitment. In the software domain, for example, approximately 200 engineers are being encouraged to transition from hardware to software roles through a software recurrent program by the end of fiscal 2024. Looking ahead to 2030, DENSO aims to create an optimal portfolio of mechanical, electronics, and software talent while systematically increasing the number of systems personnel who can play a key role in DENSO’s technological development by designing optimized functions across businesses, from the perspective of both society and automobiles.
Strengthening the IT and digital capabilities of all employees is also a key management priority. While encouraging employees to take on challenges that arise internally, we provide highly effective training through practical experience. For example, about 5,000 employees voluntarily participated in a basic course on digital transformation in a team learning environment, and we think that around 1,000 employees will be interested in participating in a machine learning study group in fiscal 2025, with a focus on the utilization of more advanced AI. We also launched a Digital Cross-Border Challenge (an internal side job program) where employees apply their IT and digital skills to solve challenges in other departments, with around 20 participants expected in fiscal 2025. Our goal is to have 50% of our employees proficient in advanced IT and digital tools by fiscal 2025, and we are intensifying efforts to achieve this goal.
DENSO’s competitive strength lies in the ability of highly specialized talent to drive innovation and create value across diverse businesses and domains. Through these activities, we are determined to ensure that we have the necessary quality and quantity of talent to achieve our business and management strategies.
The DENSO Way of Human Capital-Focused Management
DENSO is moving toward a new stage of management, where corporate value is enhanced by strategically increasing investment in human capital and providing greater support to employees and teams taking on new challenges, with the aim of strengthening the ability of our employees and organizations to turn ideas into reality.
Moving forward, we will continue to cherish what makes DENSO unique, fostering talent on the front lines and advancing human capital-focused management that generates new value while addressing social issues.