We aim to further increase enterprise value by
supporting engineers’ dreams, growth, and
self-actualization, while at the same time living up to
the trust we have earned from our clients over the
more than 60 years of our existence.
SEKIGUCHI Sozo
President and CEO
Business Environment and
FY2024 Financial Results
In FY2024, the world made a full-scale entry into the
post-COVID-19 era. It was a year in which a resumption of
normal operations could be felt among our main clients,
manufacturers in industries related to automobiles and
semiconductor manufacturing equipment. There was extremely
strong demand for our engineers, and we achieved growth in
both sales and profit for the tenth consecutive year. We expect
a continued rise in development drive across various industries
and demand for engineers to exceed the previous year’s. Along
with this trend, we anticipate steady business performance.
Especially salient in FY2024 is the increase in the unit price of
engineers, which has the most significant impact on improvement
in operating margin. In FY2024, the unit price of engineers rose
by 3.2% year on year, resulting in an increase in the operating
margin from 12.9% in the previous fiscal year to 15.1%.
Contributing to the rise in the unit price of engineers is our
ability to supply talent to projects with high demand for engineer
dispatching services. Recent years have witnessed
considerably greater demand from carbon neutrality-related
projects than from other industries. By supplying engineers with
high added value to these projects, we have secured contract
unit prices above the market average. Notably, in FY2024, the
unit price of new graduate engineers at their first assignments
increased more than in other years.
Another key factor supporting the increase in the unit price of
engineers is the fact that our existing engineers under contract
with our clients are delivering strong performance and outputs
in their respective projects. We offer engineers a comprehensive
curriculum and our own education system to improve their
individual skills. We will further strengthen our training programs
and provide career support to help engineers succeed and to
contribute to client satisfaction.
In order to continuously secure and develop excellent talent in
an increasingly competitive environment, it is critical to expand
talent utilization channels. In our Medium-Term Business Plan
(FY2023 to FY2025), we have set a goal to increase the
percentage of our contracting business, which accommodates
diverse work styles, to 10%. Due to high client demand, the
percentage rose from 8.6% in the previous year to 9.3% and is
projected to reach the 10% target by the final year of the plan.
Progress of Our Carbon Neutrality Efforts
At Artner, we position “carbon neutrality” as a pillar of our
business activities in our Medium-Term Business Plan. By
having our engineers participate in carbon neutrality-related
technology development projects, we will advance the
development of these technologies and support their
widespread use in the market. This is how we contribute to
carbon neutrality. Today, ESG initiatives are being scrutinized by
clients and employees alike.
To contribute to carbon neutrality, we have set two numerical
targets. One is the ratio of carbon neutrality hires among new
graduate and career hires, and the other is the ratio of
engineers working on carbon neutrality projects among our
currently assigned engineers. We have secured 46.1% new
graduates as of FY2024, compared to our FY2025 target of
55.0%. We will continue to strengthen our recruitment efforts to
achieve the 55.0% target. In addition, the ratio of currently
assigned engineers was 48.3% as of FY2024, just shy of our
FY2025 target of 50.0%. If we can steadily supply talent to
meet the strong demand from carbon neutrality-related projects,
we believe we can fully achieve our targets by FY2025, the final
year of the Medium-Term Business Plan.
Future Growth Strategy
Clients have speeded up development more than the previous
year, which has greatly increased the demand for engineers.
Our performance this year, the final year of the Medium-Term
Business Plan, depends on how well our talent supply can meet
this demand. Labor shortages have become a major social
issue in recent years, and the shortage of engineers is no
exception.
In the increasingly competitive recruitment market environment,
it will be crucial to secure the number of engineers needed for
our plan.
Supporting engineers’ dreams and self-actualization is at the
core of Artner’s business. In our recruitment activities, we fully
appeal to candidates with project themes and the companies
with which they may be placed. Those with whom this resonated
tend to join the Company. Despite the challenging recruitment
market environment, our unified recruitment activities from start
to end, from hiring to placement, led to 171 newly graduated
engineers joining us in April 2024, about 40 more than in the
previous year. In addition, we are committed to achieving our
target of 100 career hires to meet client demands.
We have a three-fold strategy for future growth. The first is to
actively negotiate the unit price of engineers, taking into
account the current market environment, the so-called
supply-demand balance, with the aim of increasing the unit
price of engineers to at least that in the previous year. The
second is to further educate and train engineers who are our
human capital and enhance their added value. This will contribute
to client satisfaction and in turn to higher unit prices of
engineers. The third is to properly respond to the needs of our
main clients, manufacturers in industries related to automobiles
and semiconductor manufacturing equipment.
Moreover, reflecting on the progress made over the past two
years, we believe we can increase our market advantage by
expanding and deepening the first basic measure of “Promoting
strategies by segment” in our Medium-Term Business Plan, as
well as breaking down, enhancing, and complementing Artner’s
strengths and weaknesses compared to other companies in the
same industry.
Building a Business Environment that Enables
Continuous Improvement and Enhancement
of Work Conditions for Securing Talent
A key challenge for the Company is to secure the quality and
quantity of talent. Failing to meet the quality and quantity
demands of our clients could open the door for competitors.
Artner needs to put all that it has to address this challenge.
To secure the quality of talent, we will obtain even more attractive
work to provide engineers with job opportunities, and offer
appropriate education, training, and follow-up. Additionally, we
must create a business environment that allows for continuous,
rather than temporary, improvement and enhancement of work
conditions. To this end, the Company will aim to increase its
added value.
As for the quantity of talent, we anticipate that we can recruit
approximately 200 to 250 new graduates and 100 to 150 career
hires in our current business fields. If more talent is needed, we
will need to secure the necessary numbers through M&A
measures or consider strategies for recruiting foreign nationals.
To increase the share of our contracting business going forward,
it will become important to utilize outside talent and better
organize our partner companies. In our current fields, we
believe that we can resolve the quantity challenge by further
securing our own engineers, foreign talent, and partner
company talent.
Artner’s Strengths and Advantages
Artner started this business in 1962. No other listed companies
in the same industry have a history longer than ours. I believe it
is not an exaggeration to say that we are pioneers in the
engineer dispatching business. We have built a solid position in
this industry for over 60 years through our achievements and by
earning the trust of our clients. This is an undeniable fact and
constitutes a value of the Company. Compared to other companies
in the same industry, we have a higher project participation rate
in high-level technology fields, including upstream and
midstream processes. This is an advantage of the Company
and something we should continue to maintain. Notably, our
main clients in industries related to automobiles and
semiconductor manufacturing equipment sectors view Artner
as a go-to brand for quality engineers. This is a value we must
continue to uphold. Such an image is based on our strength in
being able to provide a continuous and stable supply of talent,
and it is our mission to keep meeting this expectation.
Human Capital Approach and Initiatives
Our basic view on human capital aligns with our Management
Philosophy, “Engineer Support Company: We support our
engineers’ dreams.” Based on the fundamental philosophy
embodied in our Purpose, “support the growth and
self-actualization of engineers, who are Japan’s world-class
assets,” we conduct business by continually considering
measures to support the growth and dreams of our engineers.
Education is at the core of our human capital initiatives. Under
our education philosophy to support engineers’ personal and
professional growth, we offer various education and training
curricula to support engineers, including our own “T-shaped
specialist education system.”
Furthermore, promoting women’s participation is one of the
important initiatives outlined in our Medium-Term Business Plan.
We are working to establish a working environment and support
programs for those who have temporarily left their engineer
careers due to marriage, childcare, or other reasons and wish to
return to the job market as engineers. We will also continuously
foster a corporate culture in which both men and women can
freely take childcare leave and will develop a track record in
increasing parental leaves.
At Artner, talent turnover is distinguished between passive and
constructive turnover. We view constructive turnover as
engineers growing at Artner, graduating from the Company, and
moving on to new challenges. They are supported by our “job
change assistance program.” We have also established the “job
return program” for those who wish to return to Artner after
leaving us and moving on to their second stage.
These initiatives are based on our Management Philosophy and
Purpose. Our Management Philosophy and Purpose are truly
the “roots” of the Company. They allow us to implement a
variety of measures flexibly. As a result, when engineers move
on to the next stage, we are able to send them off with a smile,
rather than thinking, “why are they quitting when we have taken
time to train them?” We hope that this mindset ultimately leads
to employee satisfaction and creates a cycle in which our
former engineers succeed at various manufacturers and use the
services of Artner’s engineers.
Respecting Human Rights
Artner is a company engaged in the business of human talent.
Without underlying policies that value people, people will
become mere “objects.” As long as we continue to develop this
business, it is vital to give various considerations to all of our
employees, whom we call “talent,” and we will advance the
business accordingly. To make this intention clear, in January
2024, we announced our support for the United Nations Global
Compact. In addition, we conduct ongoing training for all
employees to familiarize them with our approach to human
rights and to raise their awareness of human rights.
Last year, we held a training on human rights, and the year
before that on LGBTQ+. Going forward, when we consider
organizing our partner companies, it will be very important to
determine whether or not they have the same policies on talent
as we do.
In particular, it will be essential that they agree with and share
our Management Philosophy of being an “Engineer Support
Company” and our Purpose. If they agree with and are able to
uphold our Management Philosophy and Purpose, there may be
an opportunity to expand the scope of our partnership and
engage in further collaboration, such as providing education to
the partner company’s engineers as “shared assets.”
Donations for
the 2024 Noto Peninsula Earthquake
We extend our deepest sympathies to everyone affected and
displaced by the Noto Peninsula Earthquake that occurred in
2024. As part of our support for the people affected by the
earthquake, Artner made donations through the Central
Community Chest of Japan. The Hokuriku area, home to
universities and other educational institutions from which we
regularly recruit, also has a long history of developing precision
technology as a local industry. Our clients and Japan’s other
leading precision machinery manufacturers are located in this
region. We believe that the recovery of the Hokuriku area will
help benefit Japan as a whole. We sincerely pray for the swift
recovery of the affected regions.
To Our Stakeholders
Our 60-year history has witnessed oil shocks and the global
financial crisis of 2008. And then there was the COVID-19
pandemic. From these past experiences and history, we have
learned that being able to adapt the business rapidly to societal
changes is essential for a company to survive and persist.
As we aim for our 100th anniversary, it is my role as the head of
the Company to swiftly grasp the changes in client needs, shifts
in employee preferences, and change in the market
environment, and address them flexibly by discerning what
must never change and what needs bold overhaul. We will
continue to support our engineers and work to increase Artner’s
value as a group of high value-added engineers. We appreciate
your continued support and cooperation.