Respect for human rights, the development of human resources, and the promotion of diversity

Human Resource Development / Promotion of Diversity

Basic Policy on Human Resources Strategy

Human capital investment

figure: Human capital investment. Priority themes: The cultivation of expertise. Relevant priority measures: OJT-based human resource development cycle. Relevant indicators: Average years of continuous service.

*Scope: The employees of and loaned employees from Shin-Etsu Chemical.

We aim to achieve the highest productivity in the industry and then improve even further. To this end, we have set operating income per employee as a key indicator and are focusing on developing “T-shaped human resources" who can achieve high productivity. A “T-shaped human resource” is someone who is an expert in a certain task or field, but also has a wide range of work skills that allow them to excel in other fields.

On-the-job training (OJT) is the cornerstone of our efforts to develop T-shaped human resources. We place employees into jobs with a sense of respect for their aptitude and professional aspirations, and we support each employee to become a true expert in their assigned job. For this reason, the Company does not implement one-size-fits-all personnel transfers or so-called routine reassignments. By having employees thoroughly study the work they are responsible for, we focus on developing employees with high levels of work ability.

The Group's business partners are spread around the world, with overseas sales now accounting for approximately 80% of consolidated sales. For this reason, we have long been working to develop human resources who can play an active role on the global stage. In addition to sending young employees to experience working overseas, we also help employees working in Japan acquire an international mindset by assigning them to work with overseas business partners.

In addition to OJT, we offer a variety of training programs for different stages of growth to help employees expand their knowledge and skills beyond their areas of expertise. These training programs include internationalization training in English and other languages, management training, and AI talent development training.

Under our performance-based personnel system, employees set ambitious work goals and improvement targets at the beginning of each half year, and are then encouraged to grow by challenging themselves to achieve these goals. Supervisors provide advice and guidance to help employees achieve their goals, and at the end of the half year, employees are evaluated on the degree to which they achieved them. At the same time, employees' abilities, potential for growth, and attitude toward their work are taken into consideration to help motivate them and encourage them to grow. In this way, with OJT as the cornerstone, we are promoting the development of “T-shaped human resources” through the personnel system that emphasizes performance and ability and conduct the assignment, training, promotion, and evaluation of personnel.

In addition to human resource development, we believe that being able to work in a flexible way that respects work-life balance is essential for the growth of human resources. We have put in place systems that allow employees to deal flexibly with various matters that occur in their lives, such as marriage, childbirth, childcare, treatment of illness, and nursing care. These company initiatives have inspired a greater sense of belonging among employees and a greater willingness for employees to voluntarily contribute to the growth of the company.

Our Group companies overseas also follow the same approach to human resource development described here, and strive to respect the diversity of each country's laws, regulations, customs, human resources and culture.

In this way, we have decided that continuing to increase operating income per employee is key metric for the Company, and we are promoting compassionate human resource development to achieve this. As a result, the growth rate of operating income in recent years has greatly exceeded the growth rate of the number of employees, and the productivity per employee has also increased significantly.

Education/Training and Personal Development

The Shin-Etsu Group supports employees' growth through various training systems, which include training for different staff rank, global communication training, auditing student system, environmental education, safety education, mental health education, and AI training.

Training for Different Staff Grades

We provide various level-specific training programs to learn management, leadership, communication, and problem-solving skills that are essential for improving performance and are required at each level of the organization.

  • General manager training (Advanced management training, S staff group/ M staff group training)
  • Section manager training (Middle management training)
  • Junior manager training (Line management training/ Staff management training)
  • Regular employees (Mid-career employees training, Women employee training, Junior leader training, Third-year training)

Global Communication Training

The Group is expanding its business activities throughout the world. Competency in a foreign language is an essential skill for smooth operations. Therefore, the company offers the following kinds of training:

  • English language training (meeting skills course and presentation skills course)
  • Cross-cultural communication training
  • Chinese conversation classes

AI Training

To discover and develop human resources capable of utilizing AI and to improve the overall level of AI in the Company, we offer, at our own expense, the AI training listed below. In FY2023, 226 employees participated, and in the three years since FY2021, a total of 766 employees have participated.

  • AI literacy training (e-learning for new and young employees)
  • Data analysis skill acquisition training: Problem-based learning for mid-career employees to solve practical problems
  • AI project management training: E-learning for general and section manager involved in projects

Auditing Student System for Employees

In 1962, Shin-Etsu Chemical established an auditing student system for employees. Under this learning system with the goal of improving the workforce, up to about 10 operators from manufacturing sites of the Group are chosen each year to study at universities for one year. In the 60 years since the system was introduced, a total of 547 employees have completed the program and are now active in various workplaces.

Training system list

figure: Training system list. Training for different staff grades, Specialized education, AI/MI education, Environment and safety education, Quality control education, Special education, General education.

*1Material Informatics

*2Problem-based Learning

Performance-based Personnel Evaluation Systems

The Group has introduced an employee evaluation system that emphasizes their ability and work performance. This system aims to increase employees' motivation by reflecting their performance and attitude to the benefits that they will receive, and evaluates how they meet their challenges to achieve higher goals. To manage the personnel system in a fair and appropriate manner, evaluation training is provided for all managers who conduct performance review, so that they can carry out personnel evaluations fairly. Transparency is increased by informing evaluation standards to employees. In addition, there is a system of interviews between an evaluator and a direct report to ensure that they can communicate successfully. During interviews, each staff member and their immediate supervisor use Communication Sheets to ensure mutual awareness of expectations and set half-year goals. Furthermore, feedback on progress is given for further development of skills.

Related information

In April 2023, we announced our “Multi-Stakeholder Policy”. Please refer to the PDF file for details.

Promotion of Diversity

Japan has a declining birthrate and an aging population, and the working-age population is decreasing year by year. In order to sustain corporate activities, it has become essential to utilize a diverse workforce, regardless of age or gender. The Group also employs people of a wide range of nationalities and backgrounds, which is essential from the perspective of expansion of global business domains, diversification of business operations, and innovation in digital technology. The Group places the highest priority on respect for the individual and aims to create a workplace where diverse human resources, regardless of gender, nationality, disability, or age, can contribute to the best of their abilities.

To learn more about how members of our diverse workforce are taking on new challenges, please read our "Shin-Etsu Challengers" series of employee interviews.

Promotion of Women's Participation and Advancement

In order to promote women's participation and advancement, the Group set a five-year goals in FY2016. From FY2021, we set new five-year goals and started to work on them.

Goals to Promote Women's Participation and Advancement In the next five years from FY2021, the company aims to achieve the following:

  1. The rate of hiring women will be 40% for administrative positions and 10% for engineering positions.
  2. The number of women in managerial positions, including junior manager level, will be quadruple compared to the number in FY2014.
Ratio of women in managerial positions (section manager level and above)
FY2022 FY2023
Consolidated 12.6% 12.7%
Shin-Etsu Chemical 1.7% 2.0%

Five-year targets and progress (starting in FY2021) in the action plan based on the Act on Promotion of Women’s Participation and Advancement in the Workplace

figure: Ratio of women at the time of hiring. FY2025 target. Administrative positions 40%, Engineering positions 10%.
figure: Number of women in managerial positions, including junior manager level. FY2025 target. 4x versus FY2014.

Scope:Employees and seconded employees of Shin-Etsu Chemica

Initiatives to Promote Women's Participation and Advancement

  1. Promoting the development of a working environment to support a balance between childcare and work
    • Enhancement of information provision to support work-life balance
    • Continue and expand measures to enable employees to continue working
  2. Promote the operation of a fair personnel evaluation system for the appointment of women to managerial positions
    • Promotion of understanding of the system by holding regular evaluator training
  3. Providing learning opportunities to encourage employees to change their mindsets
    • Plan and hold trainings to change employees' awareness of women's participation and advancement
TOPIC

Holding the first roundtable for female employees

In March 2024, Shin-Etsu Chemical held its first roundtable for female employees at its head office as part of its efforts to promote the active participation and advancement of women. President Saitoh opened the meeting with his thoughts on the subject, and this was followed by a mentoring session by Ms. Hasegawa (Outside Director), Ms. Kagami and Ms. Kaneko (Outside Audit & Supervisory Board Members) which was attended by 19 female Group employees. Three mentors shared their experiences and talked about their expectations for the Group, and the participants actively exchanged opinions about their workplaces and jobs, providing an opportunity for female employees to connect with each other across departments.

The first roundtable for female employees
(March 2024, Shin-Etsu Chemical Head Office)

Creating a Better Workplace for People with Disabilities

We are working to create a workplace where people with or without disabilities can play an active role. At the head office, we are working to maximize employment opportunities by flexibly setting working hours and working locations according to the degree of disability and situation. At our plants, we are improving the environment from both a hardware perspective, such as facilities and equipment, and a software perspective, such as disaster drills, so that people with disabilities can work safely.

Employment rate of persons with disabilities

figure: Employment rate of persons with disabilities. Legally mandated employment rate 2.30.

Wheelchair ramps
(Shiin-Etsu Chemical Gunma Complex)

Creating an Environment in Which Employees Can Contribute Regardless of Age

In April 2019, the company raised the retirement age from 60 to 65 after continuing discussions with the Shin-Etsu Chemical Labor Union. It is the first time that such a system was implemented at a major Japanese chemical company. After turning 60, they will receive 80% of the salary received at age 59. We will also raise salaries and promote people based on personnel evaluation. By adjusting the employment environment after the age of 60, skilled workers at manufacturing sites will be able to pass on the technology and their experience to the next generation.

*Personnel subject to human resource development and promotion of diversity in the Group are the employees of and loaned employees from Shin-Etsu Chemical.

Initiative by Simcoa Operations Pty. Ltd. (Australia)

Monitoring human rights conditions in the supply chain

The Human Resources Department of Simcoa Operations Pty. Ltd. is committed to respecting human rights, developing its human resources, and creating a comfortable working environment. With regard to human rights, in accordance with Australia’s Modern Slavery Act, Simcoa continuously monitors its supply chain for slave labor and reports the results to the competent authorities. It also does not do business with suppliers who exploit their workers under poor working conditions. Simcoa is also working on gender equality issues such as the gender pay gap. In addition to submitting its annual report to Australia's Workplace Gender Equality Agency (WGEA), Simcoa participates in working groups with other companies and the Australian Government on respect for human rights and gender equality, and shares external case studies internally.

In terms of human resource development, Simcoa is enhancing its job-specific training and education of equipment safety operation, among others, and in terms of improvements to the work environment, it is expanding programs for work-life balance. Simcoa has also established a remedy policy on human rights, a team building activities policy, and a retention policy to prevent employee turnover and ensures that all employees are treated fairly and equitably.

Related Data

Aspect Classification Scope Unit FY2021 FY2022 FY2023
Employees Number of employees by region Japan Persons 9,101 9,401 9,718
Asia/Oceania Persons 10,617 10,935 10,736
Latin America Persons 0 0 0
United States Persons 3,638 3,745 3,887
Europe Persons 1,598 1,636 1,663
Consolidated Persons 24,954 25,717 26,004
Number of employees (male) Consolidated Persons 17,434 18,120 18,461
Domestic Persons 8,100 8,345 8,583
Overseas Persons 9,334 9,775 9,878
Number of employees (female) Consolidated Persons 7,520 7,597 7,543
Domestic Persons 1,001 1,056 1,135
Overseas Persons 6,519 6,541 6,408
Turnover rates Shin-Etsu Chemical % 1.3 1.4 1.2
Consolidated % 18.4 15.0 12.7
Voluntary turnover rates Shin-Etsu Chemical % 1.1 1.2 1.0
Consolidated % 17.2 13.8 11.0
Diversity Employment rate of persons with disabilities Shin-Etsu Chemical % 2.27 2.35 2.42
The number of women in managerial positions including manager level Shin-Etsu Chemical Persons 19 19 23
Consolidated Persons 538 576 557
Percentage of women in managerial positions at the section manager level and above Shin-Etsu Chemical % 1.7 1.7 2.0
Consolidated % 11.1 12.6 12.7