Human Resources Strategy

To create social value and customer value and to ensure sustainable growth for the Group, we are focusing on a human resources strategy that links with our growth strategy to achieve our ideal situation, and will reflect this in our programs. Specifically, we have defined the ideal situation for both our organization and our human resources and are developing a human resources management program to build the ideal human resources portfolio to achieve our ideal situation.
Through this, the MEDIPAL Group will continue to contribute to people’s health and the advancement of society by thinking proactively and constantly evolving, no matter what changes we face in the operating environment.

In order to realize the vision we have for our ideal organization and ideal human resources, we have opened up various communication channels to further everyone’s understanding, including opportunities for direct interaction between management and employees, and are drafting and executing human resources management action plans for each function with an emphasis on employee initiative and autonomy.

To shift to a business portfolio that will allow us to achieve the 2027 MEDIPAL Medium-Term Vision, we need to match the right person to the right job position. In our core businesses, we aim to increase added value and productivity while also achieving further growth. In order to shift human resources into what we now define as priority businesses, such as new businesses, medical devices and reagents, or AGRO & FOOD, we will analyze the current human resources portfolio for each business and design and visualize targets in order to execute our human resource strategy for both quantity and quality. We will enable faster business decisions and constant innovation by pursuing a human resources strategy to take us into the future. This will allow us to build systems to create social value and customer value and to achieve sustainable growth by the Group.

To pursue this strategy, our Human Resources Strategy Department is working out the concept and direction of the human resources strategy for the Group and developing platforms and other programs for overall management. After laying the groundwork in this way, the actual programs are handed over for the administrative and HR departments of each company to actually implement. We have set up a Human Resources Committee as the organization responsible for liaising and coordinating between the Human Resources Strategy Department and the HR divisions of each company. This committee meets monthly to share, investigate, and discuss problems, policies, and actions. The strategies and measures decided by the committee are reported to the management levels as needed.

To realize our vision for the the ideal organization and ideal human resources and to develop our human resources portfolio, we will implement the foundation building phase and the execution phase in parallel.

1. Understand the current situation and identify problems
   To be able to put this human resources portfolio management into practice, we will work to understand where we are now in terms of what skills our human resources have, where these resources are, and how much resource we have. In parallel, we will also run a survey of our workplace culture to identify any problems.
2. Implement programs and build a human resources platform
   Reflecting on both the problems identified (current situation) and the vision (target), we will implement programs and build a human resources platform.
   • Centralize, visualize, and analyze HR data
   • Build systems to recruit future-oriented human resources and highly specialized human resources from outside the company
   • Build and implement talent management systems
   • Systematize reskilling
   • Build and implement systems to develop future-oriented human resources
   • Formulate and implement job descriptions for key positions
   • Allocate human resources in a strategic, optimized manner
   • Rebuild HR evaluation systems and step up implementation to support development of future-oriented human resources
3. Manage progress based on KPIs
   As we implement the foundation building phase and the execution phase in parallel, in line with our human resources strategy, we will set KPIs for our human resources strategy to manage our progress. To set the KPIs, we are drawing on the ISO 30414 standard and considering developing KPIs specific to the MEDIPAL Group that link with our growth strategy.

The MEDIPAL Group introduced a talent management system in April 2023 for more advanced management of human resources. This system allows us to centralize, visualize, and analyze various HR data, including in-depth work experience and qualifications for individual employees, or the skills developed through work experience and employee career plans. This system will allow us to place the right person in the right job. At the same time, the system provides status reports on employee numbers and sufficiency of suitable human resources for particular roles, and we aim to use this information to build a human resources portfolio that links with our business strategies.

• Common Values
  For its human resources, the MEDIPAL Group places great importance on integrity, morality, and a sense of mission as common values and considers these qualities to be the foundations of decision making.
  Integrity: Always take a sincere approach and behave with fairness and honesty.
  Morality: Act with general common sense as well as in compliance with laws and industry rules.
  Sense of mission: Take responsibility and behave in accordance with what is right for the organization and oneself.
• For the future of the MEDIPAL Group, we have defined six requirements for the future-oriented human resources to strengthen our business foundations, drive transformation, and develop our business broadly: sharing management philosophy; creativity; understanding the essence; involving others; communication; and analysis, identifying issues and resolution.

We must transform our recruitment activities so we are focused　on quality not quantity. We will change our hiring processes by　using the requirements for future-oriented human resources for　the Group. Above all, for highly specialized human resources　capable of dynamically executing the Group’s growth strategy,　our policy is to actively recruit human resources from outside the　company. We are developing systems to hire external candidates,　for example through referrals* from company employees.

* A process where company employees recommend candidates from their own network or personal relationships for possible recruitment.

Build and implement systems to develop future-oriented human resources

We are preparing Group-wide systems to develop future-oriented human resources. We are currently evaluating and analyzing the systems in place for human resources training and the HR training issues faced at Group companies. In the future, we will develop Group-wide systems for human resources development that provide an effective combination of education and training (off-the-job training), workplace instruction (on-the-job training), and self-study. Specific plans include managerial training to improve leadership and management capabilities, training on personnel evaluation systems for human resources development, and one-on-one sessions to improve the quality and quantity of communication between supervisors and their direct reports and to support personal growth for employees. We will also focus on building platforms to help employees take self-directed steps to improve their study skills and develop career pathways; reskill our employees as part of the shift in our human resources portfolio, including the development of human resources for DX; and implement more diversity and inclusion training. We will use workplace culture surveys to evaluate and analyze the outcomes from these initiatives and will incorporate employee feedback to optimize our efforts.

Build and implement talent management systems

In parallel with setting up Group-wide systems to develop future-oriented human resources, we consider the creation of Group talent management systems to be an urgent priority. We will provide training tailored to individual needs and support career development, as well as provide more opportunities to be active at work, which will improve employee engagement and reduce employee resignations.
For key positions, such as management personnel and important posts, we will strategically develop our human resources through succession planning. Based on talent reviews, we will develop successors systematically, strategically, and sustainably over several years, and believe this will serve as the driving force for realizing our growth strategy.

Development of human resources with advanced and specialized knowledge

As a “medical coordinator” that links customers, manufacturers, and patients, the MEDIPAL Group supports its sustainable growth by developing human resources with a strong ethical sense and specialized knowledge to enable them to propose solutions.

• AR（Assist Representatives）

If we are to execute the five growth strategies in the 2027 MEDIPAL Medium-Term Vision, we need to transform our human resources portfolio as the business portfolio shifts.
To achieve the Medium-Term Vision, we need to optimize the allocation of human resources by analyzing and planning for each business the current status and target status for (1) resource allocations (department, management, position), (2) human resource types (occupation, skill, capability, aptitude, personality type), and (3) resource amounts (headcount). To achieve this, we will build a human resources database to understand the current situation and visualize the skills, experience, and career goals for all Group employees.
To transform the human resources portfolio, we need to make sure we take into account quality as well as achieving a shift in quantity. In particular, for the key positions needed to realize our ideal organization, we first need to clarify job descriptions and create development plans for potential successors, and then move forward in a strategic manner. We will match employees with the requirements for executing our growth strategy, thereby optimizing our human resource allocation.
For human resources with advanced and specialized knowledge, we plan to utilize our database and focus on identifying potential resources and optimized allocation within the Group. We need to move quickly to secure these resources, so we will also consider recruiting highly specialized human resources from outside the company. Ultimately, we will take into account overall optimization within the Group and will embark on the development of a framework to promote personnel transfers across the Group and human resource exchanges. We will also work on establishing support systems for employees to drive their own career development, which serves as the foundation for these initiatives.

We have launched a project with members assigned from each group company and are currently considering how to rebuild our evaluation and compensation systems in order to develop future-oriented human resources and provide appropriate evaluation and treatment. This project will analyze the current status of the different evaluation and compensation systems in place at the various Group companies and identify any issues with these systems. The project will then consider what parts will be retained in a Group-wide system and whether to tailor some aspects for some of the companies, so that we maintain the competitive edge of Group companies while also generating synergies for the Group. In terms of our direction and concept, we will continue to deliberate how best to achieve the following: (1) make our system design and implementation as standardized across the Group as possible to ensure a smooth shift in our human resources portfolio; (2) redefine our competency assessment criteria to align with the requirements we have defined for future-oriented human resources, so that we are better positioned to develop such talent; and (3) enhance our evaluation system with a focus on connecting goal management and competencies, in order to support the achievement of organizational goals and individual employee goals, as well as competency development.

The MEDIPAL Group has conducted a survey on workplace culture and used the results from this survey to design new measures for human resource development. This survey included questions on employee engagement and work engagement to measure and improve the connections between employees and the Company and their motivation toward work. We plan to review our programs for human resource development as we work to develop the appropriate human resources to support business growth while conducting this survey periodically.