In recent years, “the age of VUCA” has become an oft-heard expression in the business world. Unforeseeable events such as the COVID-19 pandemic and rising geopolitical risks are making the future less predictable. Eyes are turning to human capital management as a way to enable companies to flexibly respond and continue growing. Let’s look at two solutions from Toshiba Digital Solutions that support human capital management through human resource development that maximizes personnel value: “Generalist” and “PeCoMe.”

We are in an age of unpredictability -- an age of VUCA (Volatility, Uncertainty, Complexity, and Ambiguity). Just a few years ago, it went without saying that employees went to offices and worked. Now, telework, a flexible work style free of temporal or physical limitations, has become widespread. Due to changes in the global situation, overseas sites are being closed and new sites are being set up in Japan. The business environment has changed suddenly in ways that no one could have imagined a matter of years ago. We are no longer in an age in which past methods, successes, and internally-accrued expertise is enough.

For companies to keep growing, it is vital that they can flexibly and quickly respond to change, and for this, personnel is crucial. They need to see human resources as capital and invest in them appropriately to continuously create corporate value. This is human capital management, a concept that has drawn a great deal of attention in recent years.

Many Japanese companies have been built on a foundation of lifetime employment. In their “membership-based employment” approach, they hire numerous new employees immediately upon graduation and then provide them with long-term career development. They have their employees develop first-hand experience in various types of work and nurture them as human resources. This approach is effective when a business follows the same course for 20 or 30 years, but the methods needed to secure and develop human resources in our age of dramatic change are different. This is because companies need to alter their business policies based on changes in the business environment, and they need to reshape their human resource strategies accordingly. In other words, they need to be able to flexibly respond to changes in the kinds of human resources they need.

Therefore, we are seeing a rise of “job-based employment,” in which companies hire the personnel that match the contents of their business. However, due to employment practices, this shift to job-based employment is not expected to proceed smoothly in Japan. One of the problems is that Japanese regulations place various restrictions on the dismissal of employees, and companies are required to maintain employment even a business ends. With job-based employment, companies must be able to hire and dismiss people fluidly based on business conditions, but this is limited in Japan. That is why the conventional membership-based employment must be used as a foundation, and improvements and changes must be made to the skills and skillsets of current employees to adapt to changes in the business environment.

So what kind of human capital management approach should Japanese companies use? Toshiba Digital Solutions believes the best approach would be to promote the autonomous growth of each employee, maximizing the human capital of current human resources in line with corporate human resource strategies.

In this context, data utilization and autonomous human resources are important.

Toshiba’s Generalist is a comprehensive human resource management solution that provides tremendous assistance in achieving this. Generalist comes in several forms. Generalist/HR/PR/TM provides support for human resource, payroll, and talent management. Generalist/CM supports human resource development and talent management. Generalist/LM is used in the operation of training such as e-learning and the management of these learning activities. These solutions have been constantly evolving with the support of numerous companies. We have also launched a new service, PeCoMe, that provides insights that stimulate the autonomous growth of employees.

To implement human capital management, companies need to collect and visualize human resource data, such as information regarding the skills of individual personnel, that is scattered across human resource systems and other systems within the company. They must then compare this information against their human resource strategies to identify gaps. Based on their findings, they must invest in human capital in the form of development or hiring and reflect the results of those efforts in their human resource strategies. This cycle of refining their human resource strategies is an important one.

The key concept behind Generalist is “connection.” It connects people and society, and it connects people and companies. It coordinates between payroll, human resource development, and training solutions. Through this, it aids in the collection and leveraging of data that is vital for human capital management. We also plan to begin providing a cloud service, Generalist HUB, for collecting diverse data from other companies’ merchandise, services, and products. This service will make it possible to leverage data even more strategically.

It is also important to have a system for continually updating the data that is collected (Fig. 1). Management strategies must be refined based on human capital data and reflected in actual human resource strategies. Using development plans, employees must be made aware of the gaps between their current status and the needs of human resource strategies, and autonomous skill development must be encouraged. Information regarding human capital must be provided to investors and the labor market* through securities reports, and their reactions must be watched closely and leveraged in company strategies. We support ongoing corporate improvement and digital transformation (DX) by providing a platform for this constant updating of data.

* Labor market: The market in which labor is treated as a product and transactions take place between consumers (companies) and suppliers (workers)

The disclosure of information regarding companies’ human capital has become important for national governments, investors, and the labor market. In discussions regarding the “new capitalism” advocated by the Japanese government, a great deal of focus has been placed on investing in people and disclosing information. From the fiscal period ending March 31, 2023, onward, it will be mandatory for securities reports to include information regarding human capital. From the perspectives of ESG (environmental, social, and governance) investment, human capital information has become essential for earning the trust of investors. In this trend of rising demand for information disclosure, we now find ourselves in an age where it is absolutely vital to organize information regarding human capital.

Various metrics have been defined for the human capital information that must be disclosed (ISO 30414 includes 58 metrics in 11 areas). The aims of individual companies with respect to these metrics vary by company, but for every company, it is important to compare the metrics against the company’s own human resource strategies and to correctly identify targets and trends. For example, if attrition rates are low, should this be seen as a sign that employee satisfaction is high, or instead that there is little personnel liquidity and it is difficult to hire new employees? Whether or not improvement is needed, and the direction the company should take in the future, will vary depending on the answer. In other words, the meanings of each of those metrics will vary significantly depending on the specific targets of a company’s business strategies, so it is important that companies use the metrics properly to improve their human resource strategies and business strategies, promoting human capital management.

Let’s look at what we mean by “autonomous human resources.” In the past, in Japan, employee development has been a long-term effort, performed using on-the-job training (OJT), in which employees learn the knowledge and skills they need through the course of actually engaging in operations, and using job rotation, in which employees are reassigned to various positions to develop wide-ranging skills through their job experience. However, in the age of VUCA, employees must be able to tackle problems without any clear answers, working with those around them to address the issues they face. Developing these autonomous human resources requires a framework for cultivating personnel who can respond to changes in human resource strategies. It also requires a transformation of the mentalities of employees. Companies that achieve this can cultivate a corporate culture in which employees autonomously learn from each other.

In recent years, a great deal of attention has been turned to “reskilling” -- autonomously learning new skills in order to respond to technological innovations and business model changes. Reskilling consists of four steps: visualizing skills, developing learning programs, supporting employees in their learning, and putting their skills into practice.

First, the gaps between the skills a company needs and the skills an employee currently has are visualized. Then, a learning program is developed to fill these skill gaps. The company must also create a system that supports the employee in their ongoing study. Then, it is important that these skills be put to use. Companies can ensure that employees thoroughly retain the skills they have learned by actively providing them with opportunities to use those skills, such as by having them participate in internal internships or projects. Employees who only engage in classroom learning will retain roughly 20% of what they have learned, but with actual experience, that retention rate rises to 75% or even higher.

Toshiba’s Generalist/LM/CM assists with this step. It provides a skill map function which companies can use to visualize the gaps between the skills needed by their human resource strategies and the skills possessed by employees, together with learning functions.

Changing employees’ mentalities regarding learning is also an important part of successful reskilling. Just as identifying the gaps between the skills needed by human resources strategies and the skills of employees is vital for companies, at the individual employee level, it’s important to realize the gaps between one’s own vision (career aspirations) and one’s current skill level. First, individual employees must clarify their career aspirations by communicating with their superiors and they must identify the skills that they will need to achieve those career aspirations. Then it is important that they must be provided with environments that allow them to learn anywhere, at any time, as well as the time they will need to study, so that they can fill these gaps.

Generalist/LM provides access to several hundred items of learning content, all accessible via the cloud. In the future, we plan to prepare a “learning portal” that will not only serve as a space where people can study the skills they need, but will also use advanced AI analysis to recommend optimal learning content based on employee skill levels, assisting with ongoing learning.

We believe that when companies promote and assist with employees’ autonomous study, they foster a “learning culture” in which employees also learn from each other. Employees will use the knowledge they have gained at work in their communications with others, which will help boost the performance of the company itself.

So far, we have focused on employee development aligned with human resource strategies from a company perspective. Now let’s look at PeCoMe, a service that supports employee lifestyles from the employee's perspective.

PeCoMe is a portal site for individuals that provides various service as well as service as a space for collecting personal data. It can be used to accrue information on the use of services related to side jobs, social contributions, learning, and the like, together with the results of these services. It can also collect work and payroll history information for the companies employees work at (Fig. 2).

Payroll data, for example, could be used for financial planning and credit services. Learning, experience, and skill data could be objectively visualized to provide users with insights regarding their interests and strengths. This could then contribute to their future career development. Stored data could be used to show users the path they have taken to get where they are, so they reflect on their own career development.

What is key here is how the accumulated personal data is handled. We consider personal data to belong to the people to whom it pertains. It uses or provides this data only when given by consent by the owners of that personal data. In other words, it lets people control their own personal data. This concept is reflected in how the system was designed to handle data such as payroll data. This allows both companies and employees to use the service with peace of mind.

In these ways, we aim to support both companies and their employees, benefitting both. Company management strategies, human resource strategies, and development plans are changing in response to changes in the business environment, but companies can continue to grow by maximizing their existing human capital through the development of data utilization and autonomous human resources. Work histories, payroll data, and various types of activity data can be collected for individual employees to provide them with insights and contribute to their own growth. Generalist and PeCoMe help make this possible.

Toshiba Digital Solutions will continue to contribute to the autonomous growth of employees and the human capital management of companies.