Daiwa House Industry Embarks on Work Style Innovation by Introducing Time Productivity Evaluation

Work style innovation has become rapidly sought after in recent years. Many companies struggle with the challenge of how to utilize ICT after implementation, and many have concerns about reducing the number of working hours and improving productivity. This report covers the know-how Fujitsu has obtained through its internal practices on work style innovation since 2010, and Daiwa House Industry's efforts to strengthen their human resource platform, which emphasizes time productivity.
[Fujitsu Insight 2017 Seminar Report]

This seminar began with a speech by Fujitsu's Kunikazu Matsumoto followed by a speech by Daiwa House Industry's Yutaka Yamashita.

The Fujitsu Internal Practices that Established the System and Instilled Awareness through Behavioral Reforms Utilizing ICT

How the Rapidly Aging Population Places Strain on Business Continuity

Kunikazu Matsumoto
Innovative Workstyle Offering Promotion Department
Innovative Workstyle Offering Division
Offering Development Unit
Fujitsu Limited

Japan is facing the challenges of an extremely low birth rate and an aging population. Over the next 40 years, the country's population is expected to decrease by 37.6 million, while the workforce is expected to drop to 60% of today's size (*). Against this backdrop of changes in the social environment, there is an urgent need to engage in work style innovation as a nation in order to improve workplace productivity and solve the problem of long working hours.
Fujitsu's employees are also aging, and the company worries of an increase in the number of people who leave work to care for their aging parents. In consideration of these factors, the worst-case scenario for Japanese companies and organizations 40 years down the road is the possibility of having to carry out and expand their businesses with workforces one-third the size of their present ones. To offset the effects of this situation, new challenges have presented themselves, such as the need to consider employee work-life balance and to improve each individual's work efficiency.

  • *:Cited from c

A Tripartite Approach to Promoting Work Style Innovation: Procedures, ICT, and Awareness Reform

Fujitsu has been building a global communications platform since 2010, and the company has launched efforts to improve productivity through workplace innovation utilizing ICT on a global corporate scale, including the 160,000 employees from all group companies in Japan and overseas.

In the beginning, we presented six objectives achievable by work style innovation utilizing ICT.

  • Strengthened communication
  • Sharing knowledge globally
  • Work styles with flexibility in terms of location and time
  • Strengthened security
  • HR labor measures
  • Work environments/facilities

However, utilizing ICT alone is insufficient to fully implement work style innovation. This is why we internally shared our ideal work styles to aim for and focused on the tripartite approach: reviewing rules and procedures, implementing ICT and facilities, and reforming employee awareness. Awareness reform, a major challenge, starts from behavioral reform. This includes thinking about how to effectively change work styles to improve efficiency. The implementation of ICT, facilities, rules, and procedures to change employee behavior has naturally led to awareness reform. Through this tripartite approach, Fujitsu aims to improve labor productivity while creating flexible working environments.

Supporting Communication by Utilizing ICT; Improving Work Speed by Eliminating Time-wasting Activities

As specific examples, we will divide the six aforementioned objectives into three parts: work efficiency, flexible work styles, and time management/behavioral reform.

First, to improve work efficiency, communication must be strengthened by centralization using text or speech via computers and smartphones, and also by enhancing long-distance communication. This enables seamless communication unrestricted by barriers of location or circumstances. In addition, to facilitate global knowledge sharing, Fujitsu has created personal websites called "My Site" for 110,000 employees across the entire corporate group. This has enabled us to share the information and know-how possessed by individuals, divisions, and the company itself.

As a result, to give one example, 95% of internal personnel now regularly use web conferencing. Although in the beginning there were concerns about terminating the use of extension phones, such as how doing so might create obstacles in communication, those with concerns now remark about the improved usability, and use of web conferencing has become the norm. Here we can see how employee awareness has shifted.

Achieving Flexible Work Styles by Telecommuting

As a measure to achieve flexible work styles, Fujitsu introduced telecommuting to 35,000 employees on February 28, 2017. Fujitsu defines telecommuting as working from remote locations, which includes mobile work and working from satellite offices as well as other working environments that do not restrict employees to specific locations or times. To promote telecommuting, in addition to implementing a system for doing so, we have also established work environments and facilities that enable flexible work unrestricted by time or location.
Before implementation, we underwent a one-and-a-half-year trial period to establish our telecommuting system. This system places clear emphasis on eradicating work outside of regular work hours as well as the importance of frequently communicating with others.

The work environment is comprised of virtual desktops. For sales employees who frequently leave the office, Fujitsu has distributed thin client laptops--weighing just 750 grams--that combine usability with strengthened security via biometric authentication. Moreover, we facilitate flexible work styles with "Print Anywhere," a service that enables secure printing from various locations, thereby eliminating the need to carry around documents. We have also established workspaces in out-of-office facilities such as the satellite office "F3rd" (F Third).

Thanks to these efforts, 12,000 of 35,000 employees are now planning to start telecommuting. A daily average of 344 people and a monthly average of 6,800 people use "F3rd Shiodome," the satellite office established at the Shiodome head office. We consider this to be the result of a reform in employee behavior that was facilitated by establishing procedures and rules that support telecommuting as well as by the development of the ICT environment.

Behavioral Reform on an Hourly Basis Utilizing ICT

Recently, legislative measures are being taken to address the issue of long working hours. Legal limits on the number of working hours are expected to be established in 2019. In line with this, as a measure to improve time awareness, Fujitsu has introduced ID Link Manager, a system that employees and managers can use to enhance awareness. Below, we will introduce specific examples of efforts by Daiwa House Industry to drive work style innovation forward using this system.

How to Strengthen the Human Resource Platform as a Business Cornerstone

Establishing a Work Environment to Physically Prevent Overwork

Yutaka Yamashita
Personnel Department
Daiwa House Industry Co., Ltd.

Daiwa House Industry (hereafter, "Daiwa House") has announced the following two points as part of its company policy: to develop people through business, and to recognize that a company's progress depends directly on ensuring a good working environment for its employees. In addition, as measures to improve productivity, Daiwa House makes efforts to train and utilize human resources effectively, as well as to create flexible working environments. The following three efforts will be covered in detail:

  • Solving the problem of long working hours
  • Encouraging use of annual paid vacation days
  • Implementing an evaluation system for time productivity standards

The first issue is solving the problem of long working hours. Most business that Daiwa House conducts consists of contracted architectural and construction work. Because of this, in the past, awareness of time management had been lacking. Even with overtime compensation, the amount paid was based on fixed or "deemed" working hours. However, the company has now completely eliminated this system and started managing work hours on computers. Overtime work must now be requested and approved in advance.

The system blocks employees from working past regular working hours if overtime was not requested and approved.

This time management system is based on Fujitsu's ID Link Manager; it has been customized for use by Daiwa House. The system was implemented as a measure to physically prevent overwork. If the system's messages are ignored and the employee continues working, the system has a function to forcibly shut down the computer.

Daiwa House uses a system called "D Smart" to manage employee attendance records. This system enables managers to confirm employees' work situations in a timely manner. Moreover, if the number of overtime work hours approaches the limits established by Japan's Article 36 Agreement (**), the system automatically sends a message to the employee and his or her manager warning them of the long working hours.

By implementing these measures, Daiwa House has successfully placed reasonable limits on the number of working hours. In addition, offices that do not make efforts to improve working conditions related to overwork by establishing specific standards are labeled "black offices." As a penalty, bonuses are reduced for everyone at such offices. These efforts have resulted in a 20% reduction in the amount of annual overtime work, from 449 hours before implementing the system to 365 hours after.

  • **:If an employer has entered into a written agreement with either a labor union organized by a majority of the workers at a workplace or with a person representing a majority of said workers, and has notified the relevant government agency of such an agreement, the employer may extend the number of working hours or have workers work on their days off. This agreement is called an "overtime work agreement." In addition, limits are placed on the number of overtime working hours. This agreement is often referred to as the "36 Agreement" because it is stipulated in Article 36 of the Labor Standards Act. (Cited from the Ministry of Health, Labour, and Welfare website.)

Increasing the Paid Vacation Usage Rate to 53.5% by Using Holidays in Hourly Increments

Daiwa House has also created its own system for using paid holidays. The company began permitting use of half-vacation days in April 2005, and in April 2010, the company permitted use of vacation days in hourly increments. They also changed the system by which paid holidays expired after two years, making it possible to accumulate up to 100 vacation days, albeit with limited applications.

Daiwa House also makes various other efforts related to use of paid holidays, such as compulsory use of one paid vacation day per quarter, planned simultaneous vacation days during holidays such as Golden Week and Obon, and having employees submit plans to use paid holidays during interviews with their managers that they have once every six months. These efforts have increased paid holiday usage from 18% in 2005 to 53.5% in 2016.

Improving Productivity by Evaluating Time Productivity and Balancing Workloads

Setting the only objective to be reducing the number of overtime hours results in harmful effects, such as unreported overtime hours. To counteract this, Daiwa House reformed how it conducts performance evaluations in 2014, introducing an evaluation system based on time productivity and a system to encourage balancing workloads. The time productivity-based evaluation system makes the shift from the conventional method of evaluating profits on a per person basis to a per hour basis. In the past, achieving the same profit with fewer people was evaluated highly, but after implementing the new system, achievements are evaluated better based on how little time they take to accomplish.

Daiwa House's method of evaluating profits on an hourly basis
Daiwa House's method of evaluation based on workload balancing

As shown above, efforts such those to reduce long overtime hours, the system for encouraging use of paid holidays, and implementation of an evaluation system based on time productivity have improved the sales figures per person from 91 million yen in 2012 to 114 million yen in 2016. In addition, the total number of working hours per year per person was reduced from 2,276 hours in 2012 to 2,190 hours. Instilling awareness of work productivity improvement in workplaces is a difficult task. Nevertheless, implementing a system for properly evaluating productivity improvements has led to increased awareness of employee work styles.

Work Style Innovation Reform Helps People in Workplaces

Towards the end of the seminar, Fujitsu's Matsumoto again took the podium, making the following points about how to proceed with reforms based on his experience in helping many companies implement work style innovation.

"First, each phase along the way must be clarified, from planning to operation."
"Ensure the plan is clear regarding what must be done and that it envisions how reforms can be made, and how it can be entrenched and applied within the company."

He concluded by saying, "Work style innovation reform helps people in workplaces. A vision must be created based on the work styles that those in the workplace want or their ideal work styles. To move work style innovation forward as smoothly as possible, it is crucial to consider what each and every employee must do to achieve these goals."

  • Yutaka Yamashita Center Leader, Shared Service Center
    Deputy Manager, Personnel Department (HR, Shared Services, Health Management)
    Daiwa House Industry Co., Ltd.
  • Kunikazu Matsumoto Innovative Workstyle Offering Promotion Department
    Innovative Workstyle Offering Division
    Offering Development Unit
    Fujitsu Limited