Working together with AEON Co., Ltd. to realize Japan’s largest-scale human capital management of 600,000 employees

AEON is a comprehensive group consisting of AEON Co., Inc., a pure holding company, and a group of companies that support the daily lives of its customers. It comprises 309 consolidated subsidiaries and 25 equity-method affiliates with approximately 600,000 employees (about 163,000 salaried employees and about 435,000 hourly employees) as of the end of February 2024.

Link and Motivation supports the planning of human capital information disclosure policies and the implementation of engagement surveys using its proprietary cloud-based “Motivation Cloud” service. The engagement surveys target the approximately 600,000 employees across the entire AEON Group, including hourly employees (part-timers) and employees working overseas, making it one of the largest implementations in Japan. Additionally, we provide such support as the holding of briefing sessions for the Group’s companies and creating a framework for integrating and analyzing survey data from over 300 domestic and overseas companies.

Business and departmental overview

Ms. Katayori: 
AEON is a comprehensive group company made up of around 300 domestic and overseas companies in 14 countries. We operate in nine business sectors with a focus on retail as well as financial services, development, and health and wellness. Our vision is to create a future filled with smiles, guided by the principle that “Everything we do is for our customers.” As a holding company, AEON Co., Inc. is responsible for managing and making strategic decisions for each of its operating companies.

The role of the Human Resources Planning Department is to promote a vibrant work environment for AEON Group employees. As a holding company, our important mission is to grasp the reality at each company and provide them with value-added proposals.

 Mr. Asada: 
Our department also plays a key role in disclosing human capital information and has traditionally been responsible for collecting and analyzing HR data from each operating company as well as managing labor risks. In addition, when we make disclosures, we discuss how to communicate our views on HR in accordance with AEON’s foundational ideals, and design our own key performance indicators. Looking ahead, we believe it’s essential to continue providing AEON’s unique approach to human capital disclosure and promote initiatives that support the Group’s sustainable growth.

Behind our efforts to boost engagement

Ms. Katayori: 
There are two main reasons why we’ve started to focus on increasing engagement. The first has to do with the way we think about people. When it comes to AEON’s foundational ideals, we view the retail industry as a “people industry” and believe that the source of our growth lies in our people. Employees are the most fundamental capital for realizing our management strategies. For this reason, it’s essential for the company to understand how our employees feel from day to day about their work, or in other words, their state of engagement.

The second reason is that we want to be a company of choice in the labor market. Amid the growing challenges posed by a shrinking workforce due to a declining birthrate and an aging population, the labor market has become increasingly competitive, which led us to focus on retention strategies aimed at preventing employee turnover. But now we want to shift our focus toward attraction strategies to draw in employees as well as job seekers. To achieve this, we believe that initiatives aimed at improving engagement are essential, which led us to introduce Motivation Cloud.

Why we chose Motivation Cloud

Mr. Asada: 
Up to now, we had conducted our own survey once a year, the main purpose of which was to monitor the workplace environment and levels of compliance. It wasn’t really intended to assess engagement. If anything, it was more of a mechanism for addressing potentially adverse issues. But moving forward, we felt we needed a system that generates positive outcomes and helps us harness the power of our people.

Also, while our in-house survey used our own unique questions that made possible comparisons within our Group, we weren’t able to assess how we compared against other companies or the industry as a whole. As we worked toward enhancing our human capital disclosure, we felt the need to adopt a widely used survey that allows us to compare our engagement levels with external standards.

In particular, the Group consists of numerous companies not only in Japan but also overseas, spanning such industries as retail, finance, and development. We also have a diverse range of job roles and employment types. Therefore, it was essential to compare macro data not just at the Group level but also by company and attribute in order to identify specific challenges.

One of the main reasons we chose Motivation Cloud from among the various surveys available was its dominant share in the domestic engagement market and its vast database. This allows us to ensure comparability with external benchmarks and gain insights into the current state and challenges of each company and attribute through metrics like “engagement scores” and “engagement ratings.”

Moreover, your company (Link and Motivation) has supported us in formulating the AEON Group’s human capital disclosure policy. Because you fully understood the story we wanted to tell through our human capital management, you were able to provide us with proposals that were perfectly tailored to meet our needs.

Conducting the survey

Mr. Asada: 
What impressed me about the survey results was how clearly the engagement levels were reflected by industry and company through the scores and ratings. Although we’ve conducted surveys in the past, this was the first time I truly felt we were able to visualize the state of our organization.

Previously, while we did notice differences among business units, we never identified disparities that were as significant as those revealed by Motivation Cloud. By asking appropriate questions, I was surprised by how detailed we were able to view our organizational status and reminded of how important it is to understand what’s actually going on within the organization.

Although the overall engagement score was close to what we expected, we noticed low scores for companies and industries that we previously thought didn’t have any significant issues. As a result, we discovered challenges that we wouldn’t have been able to identify through our usual holding company operations. If it hadn’t been for Motivation Cloud, I believe we wouldn’t have been able to uncover these issues.

In this survey, we also focused on the results for our hourly employees (part-timers) and overseas Group companies. Since over 70% of AEON’s workforce comprises hourly employees, who tend to have a higher turnover rate compared with employees paid on a daily or monthly basis, we were particularly interested in how engagement levels differed by employment type. We have started to see some results, but I believe this is an area we should continue to monitor closely.

As for the surveys we conducted at our overseas Group companies, with your support, we translated the materials into 11 languages. Although we had heard beforehand that engagement scores tend to be higher overseas, the scores we received exceeded our expectations and the coordinators from our overseas companies who handled the survey also provided positive feedback on the analysis. While we were pleased with the results, it highlighted the need for us to learn more about the differences in perspectives and values compared with our domestic employees. Leveraging such knowledge, we’d like to improve the engagement scores of our domestic companies.

The value of Motivation Cloud

Mr. Asada: 
As far as I’m aware, Motivation Cloud’s is the only engagement survey that measures engagement on the two axes of expectations and satisfaction. I feel that being able to identify the gap between expectations and satisfaction is one of the great values of Motivation Cloud, as it reveals each organization’s strengths and weaknesses.

Our in-house survey only measured satisfaction levels, which left us wondering whether the initiatives we implemented would lead to the improvements employees wanted. But with Motivation Cloud, which makes employee expectations visible, we can consider effective measures based on clear evidence. In fact, after reviewing the survey results, each company was able to realize that their initiatives weren’t in line with their employees’ expectations.

Additionally, as part of our Group’s effort to promote human capital disclosure, we started releasing engagement scores in our annual securities report for the fiscal year ending February 2024. Motivation Cloud’s ability to instantly provide comparable scores made such smooth disclosure possible.

Initiatives we took when introducing Motivation Cloud

Mr. Asada: 
With over 130 companies in Japan alone, it’s a given that challenges will differ by business unit and that each company will have a different perception of engagement. You could say it’s the fate of a holding company, but if we’re not able to convey our intentions properly, the operating companies will feel that they’re being forced to comply. That’s why, to ensure the understanding of each operating company, we dedicated a lot of time to explaining and preparing in advance.

It was particularly important to communicate to employees the AEON Group’s goals we wanted to achieve and the background behind this initiative in a convincing manner. We carefully explained the importance of improving engagement and the benefits of carrying out Group-wide improvement initiatives.

Additionally, we needed to consider how to minimize the burden on each company. The survey we used previously had 30 questions, while the Motivation Cloud survey has more than 80. Moreover, it covers a significant number of participants, nearly 400,000 of whom are part-time workers. There were some concerns within the company about possibly putting pressure on employees and increasing the burden they faced.

To reduce this burden on employees, we made it possible for them to respond on multiple devices, including PCs, tablets, and smartphones, and carefully considered what the interface looked like. The survey primarily uses a scroll-and-select approach, which allows quicker respondents to complete it in about 15 minutes. We proceeded with preparing for its introduction and gaining everyone’s understanding by sharing the survey screen, showing them how surprisingly easy it is to respond to.

What we hope to achieve through Motivation Cloud in the future

Mr. Asada: 
This is the first time we’ve been able to visualize the engagement status of each company, but there were still differences among them in how they perceive engagement. In the future, we’d like to define how we view engagement as a group and communicate it to each company.

Those companies with less favorable scores need to have a sense of urgency, and we must address these weaknesses by providing materials and other efforts aimed at realizing improvement.

Ms. Katayori: 
The survey clearly showed the health of each company, with some having very low scores. But these results reflect the honest responses from employees and can be seen as a message from them to their company and the Group. This is why we must take their feedback seriously and leverage it toward future improvements.

Mr. Asada: 
As was just mentioned, there were differences in how each company perceived engagement, but those that recognized it as an important indicator for improving employee retention and productivity have welcomed the introduction of Motivation Cloud. Upon seeing the survey results, some of these companies were eager to sign a contract with Link and Motivation to launch their own efforts to boost engagement.

Additionally, we’ve had an increase in inquiries, mostly from publicly listed companies, requesting guidance on how to handle their human capital disclosure. In fact, some companies have already started to develop their human capital disclosure policies with support from Link and Motivation.

As a holding company, we’re very encouraged by this trend, and we recognize it to be one of our responsibilities to expand these initiatives, regardless of whether the companies are publicly listed or not.

Prospects for the future

Ms. Katayori: 
As I mentioned at the beginning, the source of the AEON Group’s growth lies in our people. To create customer satisfaction, it is crucial to first enhance employee engagement. We want to promote various initiatives that make people want to work for the AEON Group, while also communicating internally and externally that we are a company that values its employees.

Mr. Asada: 
To ensure this survey doesn’t just serve as a snapshot in time, we need to create a system that encourages each company to take the next steps. We’re considering how we can integrate our engagement initiatives into HR our strategies so that companies will take an interest in their own engagement levels and independently think about ways to improve them. 

We believe these efforts will help build trust between the company and its employees, foster empathy for our ideals, and motivate employees to contribute to the company and, in turn, to our customers. With 600,000 employees across the Group, it is particularly significant for AEON to focus on improving employee engagement. Looking ahead, we want to continue to prioritize engagement-based management, guided by our foundational ideals that state “employees are our greatest asset.”