WILL GROUP, INC.

Consolidated revenue is concentrated in the three main domestic domains of Sales Outsourcing, Call Center Outsourcing, and Factory Outsourcing, and a sharp decline in revenue from these domains could have a material impact on business performance. It is also a risk if growth in the Nursing Care Business Support domain, Construction Engineers Domain, Overseas Working Business, etc. does not proceed as planned and dependence on the core domains does not decrease. As a countermeasure, the company continues to promote diversification of its business portfolio.

A wide range of legal amendments may affect business performance, including revisions to the scope of dispatch-eligible work and dispatch period restrictions under the Worker Dispatching Act, expansion of social insurance premium rates and coverage, the indefinite-term conversion rule under the amended Labor Contract Act, and equal pay for equal work regulations. In particular, there is a risk that increased employer burden of social insurance premiums and labor cost burdens during standby periods for indefinite-term dispatch staff could squeeze profitability. The company addresses this through monitoring of legal amendment trends by its legal department and negotiations to reflect cost increases in billing rates.

The staffing business operates under licenses granted by the Minister of Health, Labour and Welfare based on the Worker Dispatching Act, while the recruitment business operates under the Employment Security Act, and if a serious legal violation occurs, license revocation or business suspension orders could be issued, potentially disrupting overall core business activities. The company continuously monitors legal compliance through compliance training, development of operational systems, and internal audits.

Securing, developing, and retaining both employees and dispatch staff is fundamental to business growth, and failure to meet recruitment plans or a decline in employee engagement leading to higher turnover and reduced productivity could affect business performance. For employees, the company utilizes job satisfaction surveys and an HR Management Partner system, while for staff it addresses this through diverse recruitment methods and securing short-hour work assignments, among other measures.

M&A is one of the company's key management strategies, but failure to execute post-merger integration (PMI) could result in business stagnation, employee turnover, and internal conflict, potentially impairing the value of acquired assets. In addition, if the future cash flows of an acquired business deteriorate, an impairment loss on the associated goodwill may be recognized, which could affect business performance. The company addresses this through detailed due diligence, valuation confirmation by third-party institutions, and enhanced PMI monitoring.

The company has business locations in Singapore, Malaysia, Australia, the United States, China, Vietnam, the United Kingdom, Germany, and Switzerland, and country risks such as economic fluctuations, exchange rate fluctuations, government regulations, political instability, and restrictions on capital movement in each country may affect business performance. The company has established an intermediate holding company in Singapore to gather information and prevent asset concentration, and regularly conducts risk research in collaboration with local legal and tax advisors.

The company holds large volumes of personal and confidential information on dispatch registrants and job seekers, and if an information leak occurs, it could have a material impact on business performance through damage claims, loss of social credibility, and GDPR fines. The company addresses this through compliance with the amended Act on the Protection of Personal Information, acquisition of Privacy Mark/ISMS certification, enrollment in personal information leakage insurance, and operation of guidelines aligned with data protection laws in each country.

The staffing services industry has numerous competitors, and competition may further intensify due to the rapid development of IT technology, including migration to online services, lower barriers to new entry, and the spread of direct matching using social media. There is a risk of losing market share due to mergers and integrations among competitors or delayed response to technological innovation, which the company addresses through brand unification (WILLOF), strengthening supply capacity, and utilizing corporate venture capital, among other measures.

Business activities are heavily dependent on IT systems, and cyberattacks, unauthorized access, or large-scale system failures could disrupt business activities. The company strives to ensure availability and quality through the use of Tier 4-level data centers, development of remote work environments, establishment of system failure response policies under IT management regulations, and operation of a checklist for selecting outsourcing partners.

The company relies in part on borrowings from financial institutions for business funds, and economic downturns, deterioration of financial markets, rising interest rates, or a decline in creditworthiness could make it difficult to raise funds on favorable terms. In particular, in addition to recent interest rate increases, there is a risk of further increases, and the resulting rise in financial costs could affect business performance. The company addresses this by securing a certain level of liquidity on hand, procuring fixed-rate financing, and considering interest rate swap transactions.