Strategy

Human Resource Development Policy
Risks and Opportunities
Four Human Resource Strategies

Human Resource Development Policy

K's Denki Group has long established and been working on the corporate philosophy and purpose, "We will develop businesses in which people are placed in the center, seeking happiness for the people involved in the K’s Denki Group. We will spread the “harmony with, and circles of” people through our business activities, leading to greater contribution to society." As this clearly shows, we have always valued our employees above all else since our founding.
Our Group believes that employees cannot offer truly friendly services to customers unless we first value employees. This in turn makes it possible for us to value our customers. We aim to place importance on our stakeholders in the following order: 1. employees; 2. business partners; 3. customers; and, 4. shareholders. This absolutely does not mean that we treat our customers lightly. Placing importance on customers cannot be realized unless the company values its employees first. By creating an environment where employees can work actively with enjoyment, and with a smile, we can provide genuine kindness that is communicated to the customer.
We have established the K’s Holdings Human Resource Policy as follows, and by working on human capital management, we will link it to improving productivity, which is one of the priority measures set out in our Medium-term management Plan 2027.

K’s Denki Human Resource Development Policy

K’s Denki Group aims to create a work environment where diverse employees can work actively with enjoyment, and with a smile.
K’s Denki Group will nurture employees who value “harmony with, and circles of” people, and who are able to work with a feeling of gratitude.
K’s Denki Group places the greatest importance on employees, and puts effort into improving work engagement to ensure that employees have healthy minds and bodies, feel fulfilled in their jobs, approach work with enthusiasm, and are energized through their work.
K’s Denki Group will nurture employees who pay attention to personal health and are able to work with enjoyment.
Kindness toward customers does not follow a one-size-fits-all approach. It varies from time to time, depending on the individual, timing, and situation, and cannot be prescribed in a manual.
K’s Denki Group will nurture employees who can work with kindness and affection, and who have the ability to make independent decisions on what they should do to show truly friendly service to customers while also taking the initiative to do so.
The household home appliances/electronics handled by K's Denki Group are daily necessities that are indispensable to the stable lives of people. We consider it our mission to operate stores in stable manner and provide safe and secure products that are highly energy efficient.
K’s Denki Group will nurture employees who take pride in their work in a specialty store of consumer electronics.
K's Denki Group is a retail-based specialty store of consumer electronics that provides value to customers through customer service.
Specifically, we listen carefully to customers, and instead of putting pressure on them to purchase products that will generate profit for the company, we recommend more convenient and high-performing products (high value-added merchandise) that suit their needs.
K's Denki Group will nurture employees with a high level of expertise and the ability to recommend high value-added merchandise, and who are able to put efforts into boosting our productivity.

Risks and Opportunities

K’s Denki Group recognizes the following risks and opportunities that are related to human capital.

Risks	Obstacles to store operations and loss of sales opportunities due to an inability to secure the necessary quality and quantity of personnel Loss of trust in K's Denki Group due to compliance violations by employees Adverse physical and mental effects due to harassment caused by a decline in employee morals
Opportunities	Increase in motivation to sell through the provision of opportunities for upgrading skills Increase in motivation and improvement in productivity through the provision of a rewarding job Provision of a better work environment and improvement in engagement through compliance and moral education Inspiring innovation through the recruitment and appointment of diverse human resources

Four Human Resource Strategies

To respond to recognized risks and seize opportunities, K's Denki Group is working on four human resource strategies based on our Human Resource Development Policy: 1. Securing human resources; 2. Recruitment and appointment of diverse human resources; 3. Skills upgrading; and 4. Improving work engagement.

1. Securing human resources

K's Denki Group has a low turnover rate of 2.1% and a high retention rate after hiring. As such, we believe that hiring is an important issue when it comes to securing human resources. We have set out the plan of establishing 30 stores over the three-year period of our Medium-term Management Plan 2027. Therefore, to ensure smooth store operations during this period and secure personnel for these stores in the future, we have set the target of hiring 550 regular employees, including fresh graduates and mid-career recruits, during the period of the Medium-term Management Plan. In addition, we aim to hire 30% or more female regular employees among these planned new hires, with a view to increasing the ratio of female managers to 30% or more (Current ratio of female regular employees as of April 2024: Approximately 15%).

Ratio of regular vs. non-regular employees: Regular
employees:Non-regular
employees45 : 55

Number of employees: 16,099people*Number of regular employees + Average number of non-regular employees per year

Average age: 41years old*Regular employees

Percentage of female employees: 43.3%*All employees excluding executives,
temporary workers, and short-term part-timers

Employee turnover rate: 2.1%*Regular employees

Average length of service: 15.4years*Regular employees

Number of regular employees hired: 279people

Percentage of female regular employees hired: 33.7%

2. Recruitment and appointment of diverse human resources

K's Denki Group strives to make it possible for a diverse range of people to work actively with enjoyment, regardless of age, gender, race, religion, hobbies, or preferences. We place particular focus on promoting female empowerment, and our current target is to increase the percentage of female managers to 5% or more during the period of the Medium-Term Management Plan 2027. This target will be achieved when 30% of the female regular employees currently in pre-managerial positions are promoted, and we will place priority on supporting these employees in upgrading their skills and developing their careers.

Initiatives associated with promoting active participation by female employees

Positive Action Training

The Company provides training to female employees who aspire toward management positions in the future. We offer opportunities for female employees to discuss candidly the difficulties and troubles they face on the job as well as to think how they will change their work styles as their life stage proceeds, with the aim of easing their concerns for the future and helping them to move forward toward their goals.

Impressions of the participants

The presence of others who are in the same position as myself is encouraging, and I gained more confidence to work hard going forward.
I think that having experts talk to male staff (about changes in the female body, for example) can further deepen understanding.

Ms. Yasumura, Director, Senior Executive Officer, and
Store Manager of Mito Honten Store

Childcare support

The Company received the “Platinum Kurumin” accreditation in 2017 as a company proactively offering childcare support. Additionally, the Company was also the first consumer electronics retailer to receive the “L-boshi” (the highest rank) accreditation. In 2018, we opened the in-house nursery “K’s & Lily Nursery.”

Percentage of female managers: (Deputy Section Managers and Deputy Store Managers and above)4.0%

Percentage of female employees who took childcare leave: 100%

Number of female employees who took childcare leave: 45people

Percentage of male employees who took childcare leave: 64.6%

Number of male employees who took childcare leave: 113people

Initiatives for diversity

Introduction of system that extends retirement age until 65 years old

We have introduced a retirement system that extends retirement age to 65 years old. This system enables employees to independently utilize the wealth of knowledge and experience they have built up so far, and at the same time, is expected to encourage them to fulfill the role of transferring and passing on knowhow to other younger employees.

Introduction of re-employment system until 70 years old

A new re-employment system has been introduced to allow employees who wish to continue working after 65 to do so until they reach 70 years of age.

Initiatives to promote the employment of people with disabilities

The Company is proactively making efforts toward the employment and continued employment of people with disabilities. We place the greatest importance on matching jobs with such individuals, paying attention to the job contents and the aptitude of each person to ensure appropriate deployment. Furthermore, we have established a system of cooperation and consultation with supporting organizations, while the Headquarters checks regularly on the current working conditions with the heads of each division and provides support in aspects such as receiving consultations and providing advice.

Percentage of employees with disabilities: 3.2%*As of June 1, 2024

Initiatives of K’s Career Staff

K’s Career Staff, a subsidiary of the Company, engages in the temporary staffing business. K’s Career Staff not only recruits general temporary workers but also proactively provides Company employees who are 65 years and over with re-employment opportunities within the Company once again.

LGBTQ initiatives

The personnel affairs representative has taken and completed the LGBT examination (Advanced course) conducted by EESa!, and applies the knowledge to activities to raise awareness within the Company.
Since FY2018, training on LGBT issues has been added to the management training program (level-specific training).
Efforts to raise awareness at store manager meetings.
Review of the treatment of gender in internal documents.
Establishment of a consultation counter for physical and mental health issues.
Installation of accessible restrooms and private changing rooms.
Efforts to raise awareness through posters, etc.

3. Skills upgrading

K's Denki Group places the greatest importance on customer service at our stores. In order to provide our customers with truly friendly kindness, we consider it necessary to acquire product knowledge, listen carefully to customers' requests, and acquire the ability to propose better products that suit them. For this reason, we are working to support employees in improving their sales skills through e-learning and obtaining qualifications that they can apply to sales activities, such as the Home Appliance Advisor Certification. These efforts are undertaken based on on-the-job training (OJT). In particular, we put importance on the acquisition of the Home Appliance Advisor Certification, and we are working toward the goal of having one in three employees certified (33% acquisition rate) (FY2023 results: 4,950 employees; acquisition rate of 30.7%). In addition, we provide level-specific training at the points of their career advancement, from joining the company to managerial positions. This motivates employees to develop their careers and enables them to acquire the necessary knowledge and skills.

Human resource development initiatives

Support system for acquisition of qualifications

The Company has put in place a support system for the acquisition of “Home Appliance Advisor Certification.” We proactively support applicants by providing partial subsidies for study materials and paying special allowances after employees have successfully acquired qualifications. We have also introduced a system to support IT personnel in acquiring qualifications.

Number of employees qualified as Home Appliance Advisors: 4,950people; 30.7%

Implementation of e-learning

The Company uses e-learning systems, facilitated by the Intranet, to improve sales skills and explain the Company’ s systems to employees.

Delivery & Installation Training Center for maintenance and improvement of services

The Delivery & Installation Training Center has been established (in four locations in Japan), in which a kitchen, stairs, and other fixtures are installed as if they were in a customer’s home. This helps to maintain and improve the quality of service through simulated experiences.

Implementation of level-specific training
Examples of regular training (K’s Holdings on a non-consolidated basis)

The table below can be scrolled horizontally.

Target	Training program	Overview and purpose
New employees	Introductory training for new employees	Right attitude as a working adult, basics of customer service, product knowledge, etc.
Employee in their first year of work	Follow-up training	Six-month employee review
Coach of new employees	Training for coaches	Human resource development, coaching, etc.
Deputy Chief	Training to enhance sales capability	Enhancing sales capability (Purchasing psychology)
New Assistant Store Manager	Basic management training	Roles of entry-level managers, coaching, etc.
Manager	Basic sales management training	Right attitude of store managers, knowledge of the Labor Standards Act, etc.
Manager	Training for evaluators	Understanding of the evaluation system (evaluation, wage raises, promotions, interviews, etc.)
Female employee	Positive Action Training	Training for female managerial candidates

Number of trainees: 5,383people

Number of training sessions: Sessions per year Total number of sessions534sessions

4. Improving work engagement

Improving work engagement is an initiative that our Group has undertaken naturally, based on our founding policy to "Value our employees most." Work engagement is said to be correlated with labor productivity, so we believe that further improving that engagement will raise productivity, which is one of the priority measures in our Medium-term Management Plan 2027. Our challenge is to increase the paid leave acquisition rate, which is an indicator linked to the recovery of the "vitality" element of work engagement. To that end, have concluded an agreement with the labor union to establish a target of 60% for the immediate future, and both labor and management are working in cooperation to tackle this challenge. (Although the actual result for FY2023 exceeded the target at 60.7%, we will continue to work on maintaining and improving it.) In addition, based on related indicators such as turnover rate, we consider the Group's work engagement to be at a relatively high level. Nevertheless, we will also conduct quantitative analysis going forward.

Initiatives for work engagement

The Group places top priority on our employees. We have implemented various initiatives to create a work environment in which employees can work actively with enjoyment. These initiatives have been highly appraised, and we received the Chairman of the Executive Committee Award for the “Japan’s Most Valued Company” Grand Prize on March 22, 2013.

Creating a work environment without sales quota or overtime work

Employees cannot offer genuine kindness to customers unless they themselves can work actively with enjoyment. This is why we do not impose a sales quota on employees. If we were to impose a sales quota, employees may try to make customers buy items that they do not need. Such actions do not benefit our customers, and to make matters worse, may make them lose interest in visiting us again. The most important point is that employees can work with enjoyment and smiles.
Creating an environment without overtime work also forms a part of our efforts. This approach is based on the concept of “Gambaranai Keiei.” Do not do today what you can do tomorrow. As management is a never-ending job, we do not consider it meaningful to work overtime even if it produces results for the present.

Encouraging employees to take paid leave and consecutive days of leave

The Company encourages employees to take paid leave and consecutive days of leave. We also proactively call for employees to take five consecutive days of leave.

Introduction of work interval system

To protect the health of employees, the Company has introduced a work interval system, which sets an 11-hour interval between the end of a work shift and the start of the next work shift.

Nursing care support

The Company has put in place a nursing care leave system that allows employees to take up to 365 days of leave for the purpose of taking care of their loved ones while continuing to work, or while retaining their status as a company employee.

Symbol: Tomonin; Supporting the balance between work and nursing care responsibilities

Health management and mental health

The Company proactively encourages employees to undergo a health examination or a thorough medical checkup once a year, and conducts specific health guidance or health guidance for employees for whom medical findings were observed. In addition, the heads of Company offices with 50 employees or more acquire health supervisor certification and conduct stress checks for all employees.

KENKO Investment for Health Declaration

The Group considers it important to protect the health of employees. We support the KENKO Investment for Health program promoted by the Ministry of Economy, Trade and Industry (METI), and received accreditation as a 2025 Certified KENKO Investment for Health Outstanding Organizations (Large Enterprise Category).