Business Overview 4. DX Regional Collaboration Project Signpost's DX and Regional Collaboration Project started in March 2022 with the establishment of the DX and Regional Collaboration Division. It aims to provide products and services that contribute to regional collaboration by collaborating with local financial institutions nationwide, utilizing its own DX technology and open innovation. In August 2022, it began working with Oita Made Co., Ltd., which was established with the investment of multiple companies in Oita Prefecture, including Oita Bank, to sell original products made in Oita Prefecture to both domestic and overseas markets and to match local companies and Signpost's products and services in order to promote the revitalization of Oita Prefecture's economy. In addition, in April 2024, it started offering DX support services for medium-sized and small businesses. As the first effort, it supports the creation of DX declaration by (The) Fourth Hokuriku Bank, Ltd. (Niigata City, Niigata Prefecture) to deploy DX declaration support services to the market. Furthermore, it will realize new solutions by commercializing its own technology and open innovation and promote regional collaboration through innovation.
CareerLink, established in 1996, is a personnel dispatch service company that has been growing mainly in the office service business by using its operation know-how to enable mass mobilization and business launches in a short period of time. In 2017, in order to accelerate the growth of the manufacturing personnel services business, Career Link Factory Co., Ltd. was established as a subsidiary and the business was taken over. In addition, the company expanded its scope to include sales personnel services※ from 2018. Also, in March 2018, the company acquired all shares of Japan Business Services (JBS), which provides personnel services to the financial sector and payroll outsourcing services, and made it a subsidiary.
From the fiscal year ending March 2024, the sales personnel services business will be integrated into the BPO-related business division of the office services business.
The revenue composition ratio for the fiscal year ending March 2024 is 83.8% for the office services business, centered on the BPO-related business division, followed by 15.6% for the manufacturing personnel services business, and 0.7% for others (automobile management business conducted by Tokyo Automobile Management Co., Ltd., a subsidiary of JBS), making the office services business the main business. The contents of each business are as follows.
1. Office Services Business
(1) BPO-related business division
The BPO-related business division, which accounts for more than 70% of the office services business, mainly handles personnel dispatch for BPO businesses and subcontracting of some business processes for companies and local governments. Since 2020, the number of business outsourcing projects for local governments has increased, and by the fiscal year ending March 2024, it will account for 45.5% of subcontracting sales.
※ Outsourcing to business process outsourcers (BPOs) that plan, design, and implement some or all of the business processes of public agencies, local governments, and companies, among others. The contracting party is called a BPO service provider.
The benefits of introducing BPO to companies and public agencies include fluidization of fixed costs (adding personnel during busy periods) and reduction of management costs, as well as the potential for improving service quality for users, such as in-window and call center operations. In response to the Public Services Reform Act, which was enacted in 2006, the government and its affiliated organizations have introduced competitive bidding systems under the name of "market testing," and actively utilized private companies.
The company's strength lies in its operational know-how to launch large-scale projects requiring more than 1,000 employees in just a short period of time, as well as its ability to recruit the optimal staff through its unique personnel matching system (which includes aptitude tests using web systems and confirmation of shift preferences, among other tools). Additionally, by stationing employees at project sites, the company has been able to improve operational efficiency and propose operational improvements, including labor management for staff, resulting in improved customer satisfaction ratings.
Regarding the operation of BPO businesses centering on clerical processing, data input, and document distribution, the company has formed a team of about 10 people led by experienced supervisors (team dispatch) and has been processing daily operations. By deploying supervisors, the company is able to conduct business training and level work shifts to carry out early operations and improve productivity. This is an optimal operational system, especially for large-scale projects that require a large number of personnel, and the company's high service quality has led to more business with major BPO service providers.
(2) CRM-related Business Division
CRM (Customer Relationship Management) refers to a management method for building a good relationship with customers for the purpose of improving customer satisfaction. In this business division, the company provides personnel dispatch and introduction services to telemarketing service providers and contact centers for companies, among others. For personnel dispatch to telemarketing service providers, the company also uses a team dispatch system, like that used in the BPO-related business division, to expand its share with clients.
(3) General Office Business Division
In the general office business division, the company provides personnel dispatch and introduction/anticipated dispatch services in the clerical business field. Although there is fierce competition with major personnel dispatch companies such as Persol Holdings <2181> and Pasona Group <2168>, the company positions these businesses as hooks to win orders for BPO-related businesses.
From the fiscal year ending March 2024, the sales and business services for operational personnel have been integrated into administrative personnel services, and included in the BPO-related business department as revenue.
2. Manufacturing personnel services business The manufacturing personnel services business conducted by its subsidiary Careerlink Factory accounts for just under 60% of revenue for food processing, and just over 40% for manufacturing and processing industries such as transportation equipment, housing equipment, electronic equipment, and medical devices. It is characterized by actively hiring and dispatching foreign workers, and the proportion of foreign workers among employees has reached just under 70% as of June 2024. The sales bases are expanding year by year, with a total of 14 bases in addition to the Himeji headquarters, located in Atsugi, Chiba, Omiya, Tsukuba, Shizuoka, Nagoya, Okazaki, Yokkaichi, Osaka, Sannomiya, Fukuoka, Kumamoto, and Okinawa. In addition to securing foreign staff at each business location, it has also established various routes for securing human resources, such as recruiting specific skilled foreign workers and foreign interns. Its strengths include high labor efficiency rates and retention rates. The business is expanding through a virtuous cycle of expanding transactions to multiple client locations due to high customer satisfaction, and successfully developing new clients in newly started areas.
As for other businesses, Tokyo Automobile Management, a subsidiary of JBS, operates an automobile management business. The business provides outsourcing and dispatch services for tasks related to client driving, including corporate pick-up and executive vehicles, and government and local government official vehicles.
3. Other
JBS's subsidiary, Tokyo Automobile Management, operates an automobile management business as another business. The business provides outsourcing and dispatch services for tasks related to client driving, including corporate pick-up and executive vehicles, and government and local government official vehicles.
(Written by FISCO guest analyst, Jo Sato)