ITOCHU Corporation (headquartered in Minato-ku, Tokyo; Masahiro Okafuji, President & CEO; hereinafter “ITOCHU”) today announced that on May 1, 2014 it will officially introduce a morning-focused working system in accordance with the labor-management agreement with the ITOCHU Labor Union dated April 21, 2014.

Background of the official introduction

From the perspective of managing employee health and promoting effective operations, ITOCHU has long sought to reduce overtime work. The Company has made some progress in this respect, but was facing difficulties in achieving further reductions. For more effective operations ITOCHU on October 1, 2013 started a trial for morning-focused work. This initiative was aimed at practicing an effective working style to reduce the total number of working hours. Specifically, the Company reviewed the work style that assumes overtime work and shifted from a night-focused style to morning-focused work centered on the basic hours of 9 a.m. to 5:15 p.m. ITOCHU also believed that this initiative would not only further strengthen the effectiveness of operations and maintain and improve its employees’ health, but also help female employees demonstrate their abilities and help employees achieve a good balance between work and family life.
Based on the results of reviews during the trial period, which are described in "2. Summary of the reviews" below, ITOCHU concluded that the initiative will have a substantial effect on management reform, and decided to officially introduce the morning-focused working system.

Summary of reviews (period: October 2013 - March 2014; subjects: ~2,600 employees in Japan)

1) Morning-focused working system did not cause any particular inconvenience for operations in any workplace. The purpose of such work spread among employees (*1) and the effect of the initiative was apparent from the perspectives of efficiency improvement, health management, and increased motivation of employees.
*1. Time when employees entered and left office (changes from same period of previous year)
Leaving at 8 p.m. or later:
~30% of all employees who left the office → ~7%
Leaving at 10 p.m. or later:
~10% of all employees who left the office → Almost zero, excluding some who had applied for permission to do so in advance or had done so unexpectedly.
Employees who started work at 8 a.m. or earlier:
~20% of all employees who entered the office → ~34%

2) Above all, the number of overtime work hours were reduced significantly (*2), which was the aim when introducing the system, showing a gradual departure from the tendency of many overtime work hours. At the same time, costs were reduced (*3) even when the extra wages provided for early-morning work (employees subject to time management: 150%; not subject to time management: 25%) including the cost for providing free light meals.. The initiative was also effective for reducing power consumption down 6% from the previous year.
*2. Actual number of overtime work hours (monthly average) (compared to same period of previous year)
・Employees in career-track positions: 49 hours and 11 minutes → 45 hours and 20 minutes: Reduced by ~4 hours → Total reduction of ~2,300 hours
・Employees in clerical positions: 27 hours and 3 minutes → 25 hours and 5 minutes: Reduced by ~2 hours → Total reduction of ~1,050 hours
Total reduction of ~3,350 hours
Grand total (six-month results): Reduction of ~20,100 hours
*3 Cost/month (compared to same period of previous year)
・Amount of overtime allowance:
Reduced by ~7% even when extra wages provided for early-morning work are included = (1)
・Light meals:
Provided for ~550 employees/day on average (Tokyo: ~500 employees/day, Osaka: ~50 employees/day) = (2)
・Overall cost: Reduced by ~4%, with overtime allowance
(including extra wages for early-morning work) and cost of light meals included = (1) + (2)

3) In reactions to the initiative, many employees said they feel the benefits of the morning-focused work. For example, some said they use hours after work for having dinner with customers or interacting with other employees, while others said they could spend more time with their family at home, or on self-development activities such as reading. Generally, morning-focused work contributes to establishing a well-balanced working style. This initiative attracts attention from parties in various business categories and industries. Moreover, medical experts have pointed out positive effects of this initiative on employees’ health.

Future policy

Based on "Summary of the reviews" above, ITOCHU will officially introduce the morning-focused working system by applying the same rules as those applied during the trial period. Through this initiative the Company will further promote reform of the working mindset to improve its effectiveness.

Epilogue

What is most important for realizing an effective working style is to keep a good balance between operational reform and change the mindset of each employee’s workingstyle. To keep performing at the level of strong corporate performance, ITOCHU believes that it is necessary to pay greater attentions to further streamline operations, so that employees are always able to think and act with mindfulness of the customer’s best interests.