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48% of manufacturers will not recruit in 2018
2017-09-27
Recruitment in the manufacturing industry will drop next year, with only half of manufacturers planning on hiring new recruits and less than half of those expected to expand their recruitment compared to this year. The automotive and steel industries in particular, which have been struggling this year, are planning on hiring nearly half as many new recruits compared to last year. The unemployment rate among young people has been a major concern for the Moon Jae-in administration, which has been pushing for an economic paradigm shift where the nation’s GDP growth is driven by secured jobs and steady income. According to a Bank of Korea survey of 279 manufacturers released on Monday, 52.3 percent said they were planning to hire new recruits next year. The survey was conducted between Aug. 14 and Sept. 4. However, while 38.9 percent of manufacturers said that they plan to increase the number of people that will be hired next year, 61.1 percent said they plan to hire either the same number of people or less than this year. Among the companies that plan to expand the number of new recruits next year, 23.2 percent said they will hire more than 10 percent than this year, while 48.2 percent said the increase will be limited to 5 percent or less. 

Among the companies that plan on hiring fewer new recruits next year, 47.8 percent said they will be downsizing the number of recruits by more than 10 percent, whereas 39.1 percent said they will be limiting the drop in hiring to 5 percent or less. By industry, the IT sector turned out to be the most active recruiter, as 70 percent said they are willing to increase hiring. Oil refiners and the petrochemical sector came in second with 61.5 percent. However, less than half of the automotive and steel industries said they have any recruitment plans next year. The automotive industry this year has suffered the most, with sales both home and abroad shrinking sharply. According to the Korea Automobile Manufacturers Association (KAMA), sales of the five Korean automobile companies - Hyundai Motor, Kia Motors, Renault Samsung Motors, GM Korea, and Ssangyong Motor - fell 1.6 percent in August compared to last year. Domestic sales were up 12.2 percent while exports were down 4.4 percent. The sharp increase in domestic sales, however, largely resulted from disappointing sales last year resulting from strikes. Leading automaker Hyundai Motor and Kia Motors have been struggling in China, reportedly as a result of geopolitical tension surrounding the Korean government’s decision to deploy the U.S.-led Terminal High Altitude Area Defense antimissile system. The Korean automaker’s sales in Chine dropped 40 percent in August. 

Furthermore, a recent court decision ruled in favor of Kia’s union workers, ordering that employees’ bonuses should be counted as salary. “It will deal a heavy blow to the company’s bottom line at a time when it is suffering from declining sales in China and the U.S. and low operating profit margins,” Kia CEO Park Han-woo said at a seminar at the end of August. In fact, the BOK’s survey showed that 25.7 percent of those that decided to hire fewer new recruits next year cited the rising burden of labor costs, while 24.3 percent cited struggling businesses, including reduced production.
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