Obayashi Corporation holds construction site tours and business briefings in order to provide institutional investors, including shareholders, and securities analysts with a better understanding of its business operations and other matters, as well as topic briefings to provide information on the Obayashi Group's initiatives in specific fields, details of its R&D initiatives, and other focused topics.
On February 26, Obayashi held an online topic briefing to explain the status of its efforts to respond to the amendment to the Labor Standards Act, which will become effective in April 2024, attracting 51 institutional investors and securities analysts.
This revised act will also apply to the construction industry from April 2024, and Obayashi has received many questions from institutional investors and securities analysts regarding its impact.
To advance dialogue on this matter, the Human Resources Department and Work Style Reform Project Team explained company-wide initiatives and efforts to close construction sites for eight days out of every four-week period, while the Marketing Division discussed the status of orders received within a reasonable construction period, and the Digital Transformation Division presented the latest examples of ICT applications that are helping to reform work styles and improve productivity.
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- Takayuki Tomioka, Executive Officer, addresses participants
- Starting in fiscal year 2017, the Workstyle Reform Project Team was established, reporting directly to the President, as a cross-functional team comprised of members from different departments with the mission of facilitating a reduction in total working hours and increased utilization of paid leave days.
- From fiscal year 2021, Obayashi has set four Key Performance Indicators (KPIs) and numerical targets for overtime hour limits and is working to achieve all numerical targets set. As of December 31, 2023, the achievement rate for all KPIs was 95.9%.
- Obayashi has worked to visualize attendance records, implemented quarterly e-learning, and reviewed various HR programs to improve job satisfaction (e.g., established remote work system, expanded staggered working hour system, expanded subsidy system for travel expenses for employees living apart from family to return home to visit, instituted allowance system for qualifications, etc.). Going forward, Obayashi plans to introduce a flexible working hour system to reduce total working hours and statutory overtime hours at sites with large seasonal differences between busy and off-peak times, and to strengthen monitoring of employee working hours.
- Obayashi is also providing training sessions for suppliers and subcontractors to promote joint efforts to address these issues.
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- Articles outlining positive examples of how construction sites have transformed their work style, which are shared with employees on the intranet
- In order to achieve KPIs, orders received must set within a construction period that makes it possible to close the site for eight days out of every four-week period.
- The ratio of orders received for building construction projects in Japan where the construction site can be closed for eight days out of every four-week period in FY2023 were 53% (*1) versus a target of 70%.
*1: Building construction projects with a contract amount of 100 million yen or more listed during the period under review.
- The ratio of projects in which the construction site can be closed for eight days out of every four-week period in Japan in FY2023 was 51% for building construction sites and 64% for civil engineering sites.
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- Construction projects by Obayashi Corporation in Japan and feasibility of “closing eight days out of every four-week period” at the order intake stage (Orange line shows projects closing eight days out of every four-week period, brown line for six days, green line for four days)
- Implementing digital transformation (DX) makes it possible to reduce the great amount of travel time and manual operations required.
- The introduction of drone technology for progress management operations in underground spaces, that had been difficult to access due to excavation work by heavy machinery, enables a 15% reduction in time required per day, and also makes it possible to increase the frequency of safety inspections.
Going forward, not only the human resources, marketing, and DX divisions, but the entire company including the construction support divisions, Obayashi will continue working on to achieve KPIs while especially supporting construction sites that have busy periods, as well as to improve well-being in the wider construction industry by working with suppliers and subcontractors to achieve work style reforms.
Q. Why have you been successful in achieving your KPIs?
A. We have been successful in deepening employees' understanding of relevant programs and systems through e-learning and other initiatives, which served as an opportunity for them to consider how to improve the efficiency of their work on an individual basis. The introduction of remote work, staggered work hours, and other revisions to our HR systems have also led to a reduction in working hours.
Q. What obstacles are you facing in achieving your KPIs?
A. Achieving the special measure limit for overtime work (more than 45 hours per month up to 6 times per year) is challenging. The keys to achieving this target are the mindset of individual employees, the work efficiency of the construction site or division, the way in which managers assign work to their subordinates, and the manner in which work is allocated in order to even out the workload between employees.
Q. How effective have efforts to outsource non-core work been in achieving the KPI for limiting overtime work?
A. Outsourcing non-core operations has allowed employees to focus on core operations, including improving profitability. Although expenses such as personnel costs and costs for non-core operations have temporarily increased as we are in a transitional phase for introducing this system, we believe that business process re-engineering (BPR) and other measures will gradually yield positive results and contribute to profit improvement in the future.
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- Model for outsourcing of non-core operations
Q. Have you lost any orders due to proposing an appropriate construction period?
A. Although we are not aware of any such instances to date, going forward, our challenge will be ensuring appropriate profits and construction schedules, considering our construction capacity. For projects that were not contracted with a period that makes it possible to close the site for eight days out of every four-week period, it will be important to improve productivity to avoid the possibility of increased costs due to longer construction periods if we increase the number of site closure days in the future.
Q. In your DX initiatives, other than utilizing drones, what other measures will contribute to work style reform?
A. Creating cost lists and construction records is time-consuming as formats are often not standardized by the client or the design management company. Obayashi and MetaMoJi Corporation have jointly developed an app called eYACHO™ to digitize the field book used at construction sites, which is used to create book templates. We have also gradually introduced systems such as ProMIE™, which can manage construction project work progress in combination with BIM, to our construction sites, which has resulted in increased productivity.