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34% of big firms to reduce hiring
2019-09-17
While half the major conglomerates in Korea plan to hire a similar number of employees this year as they did last year, one-third admit they will recruit fewer people, including both new and experienced workers.
According to the Korea Economic Research Institute (KERI), 33.6 percent of conglomerates said they plan to cut down on the number of new employees this year compared to last year due to external economic factors, including Japan’s export restrictions against Korea. In the same survey, conducted by Research & Research, 17.5 percent said they will raise the on-year employment volume this year.
“More companies said they plan to recruit fewer people compared to last year due to the unfavorable economy derived from factors like Japan’s export restrictions against Korea, a continuous trade war between the United States and China, as well as the sluggish economy affected from the rapid rise in minimum wage,” said a spokesperson for KERI.
On the request of KERI, Research & Research conducted an online survey of 131 companies with at least 300 employees from Aug. 7 through Sept. 5. They are all among the top 500 firms by sales.
Compared to last year, conglomerates that said they will hire fewer people on year inched up 9 percentage points, while those that said they will raise or retain the employment volume retreated 6.3 percentage points and 2.7 percentage points, respectively.
The dominant reason for conglomerates to hire fewer people is the aggravated economic situation both inside and outside of Korea, followed by companies’ internal difficulties and pressure caused by the rapid rise in the minimum wage.
The need to secure new talent, to improve performance in the industry and to supplement the existing workforce due to reduced working hours were the biggest reasons why conglomerates decided to hire more people this year.
But university graduates will likely see fewer job opportunities this year compared to the previous year.
While 55 percent of surveyed conglomerates said they plan to hire a similar number of graduates as they did last year, 31.3 percent said they plan to hire fewer, a 7.5 percentage point rise on year.
Only 13.7 percent of survey participants said they would hire more graduates than last year.
Job seekers among university graduates may find greater job opportunities in the year-round recruitment system rather than Korea’s traditional biannual recruitment system.
Of those surveyed, 55 percent said they plan to hire employees year-round as well as through scheduled recruitment drives.
Although still meager, more companies have started adopting artificial intelligence (AI) in the recruitment process to pick out potential employees that match the company’s values and to look for signs of plagiarism in cover letters.
Last year, seven firms said they used AI in the recruiting process. This year, the number has more than doubled to 15 firms.
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