Origins and Future of S-Pool

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Origins and Future of S-Pool

Origins

Founded to solve the social issue of university graduates finding only part-time work

During the late 1990s, as Japan's economy remained in the doldrums after the collapse of the bubble economy of the 1980s, the percentage of university students who had secured prospective employment fell to its lowest levels ever. The rising numbers of university graduates forced to live unstable lives as part-time workers became a pressing social issue.
Sohei Urakami (now S-Pool's representative), who was a director of a tutoring center at the time, keenly wished to help the young people he met every day who were experiencing difficulties in securing employment. With the goal of helping university graduates find full-time positions, this inspired him to found S-Pool in 1999.

Rapid Growth

Listing on the stock market in the eighth year driven by the currents of the times

S-Pool's first business involved what today would be called short-term internships, a business based on the concept of having university graduates looking for full-time positions work for employers on a trial basis, with the prospects of a permanent hire if the match proved satisfactory.
Despite a loss-making first fiscal year, the business in its second year moved into the black and net sales grew to approximately 1.5 billion yen. Thanks to the unique nature of the business and its high social value, S-Pool succeeded in raising funds from venture capitalists, something still rare at the time, and got off to a smooth start.
Then, after Japan's economy started to recover on the back of the Internet bubble, employment conditions for university students began to improve dramatically around the start of the year 2000. As a company launched to help university students stuck in part-time jobs to find full-time work, S-Pool had arrived at a crossroads. With a view to listing its shares on the stock market, we resolved to implement a business transformation. We entered the rapidly growing market for short-term temporary staffing services. Driven by the currents of the times, we listed our shares in the eighth year after our founding.

Setback

Liabilities grew to exceed assets due to the global financial crisis

The Temporary Staffing Services grew steadily as S-Pool promoted efficient management through selection and concentration of core competences. However, just as we acquired a staffing agency for IT engineers as part of an aggressive management approach, the 2008 global financial crisis struck, with dramatic consequences for our business results. As the acquisition's net sales fell by two-thirds, net sales of our main business of short-term temporary staffing services also collapsed, causing liabilities to exceed assets in 2010.
To survive after this shock, we were forced to launch desperate rebuilding efforts. The staffing agency for IT engineers, which had recorded massive losses, was returned to the black in one-half year and sold off. The short-term temporary staffing services also somehow managed to recover, and the problem of excess liabilities was overcome.

Back to Origins

Returning to our founding mission and social businesses

Although S-Pool survived and was able to list its shares on the stock market, many employees had left the Company; the total number of employees fell from 400 to just 150. When discussions were held with the remaining staff members concerning our future, they agreed that a return to our origins of our founding years was the best approach.
This reflected a reconsideration of the way S-Pool, founded with the aim of finding a solution to the social issue of university graduates forced to work in part-time jobs, had changed its business focus in the rush to list its shares. The result was a strong resolve to return to our founding mission and once again to build businesses that would contribute to society.
In addition, to be a company capable of adapting to any environmental changes, we shifted from management focused on selection and concentration of core competences to business portfolio management to diversify risks. In 2012, we established a management policy calling for the promotion of businesses with high profit margins–that is, pursuing services that deliver high levels of added value and customer satisfaction.

Three transitions to date

1. Return to social businesses

S-Pool was founded to find a solution to the social issue of university graduates forced to work in part-time jobs. Our social businesses of today emerged from a return to this first mission.

mission

Applying the power of outsourcing to support corporate innovation
and solutions to society's challenges
2. Shift to portfolio management

Based on our experience of a downturn in business results due to overreliance on our main business, we transitioned to portfolio management based on a diverse range of businesses. This has expanded revenue foundations and enhanced our ability to adapt to changing environments.
3. Promotion of businesses with high added value and high profit margins

Under this new management policy, we have promoted businesses that offer high levels of social contributions and added value while being resistant to business-cycle changes. We strive to achieve sustained growth by earning profits while benefiting society.

Recovery

Aiming to be a company that delivers true solutions to social issues

We also revised our lines of business from a clean slate. The Temporary Staffing Services withdrew completely from the short-term temporary staffing field, focusing instead on helping young and inexperienced workers find employment. We also launched the new Special Needs Employment Services using leased farms. While conditions remained difficult for a time, we resolved to continue on this path without giving up until we succeeded, vowing never to withdraw from these businesses for as long as the Company lasts.
Business results recovered as the Temporary Staffing Services and Special Needs Employment Services got off on the right track. Human resources who identified with our corporate philosophy of delivering solutions to social issues proved another driving force behind this recovery. In April 2022, we listed our shares on the Tokyo Stock Exchange Prime Market.
Today, S-Pool's social businesses, which began as an effort to solve the issue of university graduates forced to work part time, have expanded to a wide range of fields, including community revitalization and the environment. Even so, we have only just begun our journey to become a company that delivers true solutions to social issues.