Korea’s fast aging population and subsequent risk to their economy
and pension funds is a recurring and well documented issue in South Korea. With
an official retirement age much lower than its western counterparts at 60;
Korean workers despite their notoriously long hours actually work less than the average
worker in other developed countries.
However the
aging workforce issue won’t simply be resolved by increasing the retirement
age, although it is likely to form a significant part of a nationwide strategy
that will also include increased employment of mothers returning to the
workforce, Korea also has to deal with a continual increasing average age of
first year workers
.
I have
documented this in my previous articles but a recent survey conducted by Dong-A Ilbo and recruitment website Incruit.com, found
that the average age of new office workers in Korea was a staggering 33.2 years
of age for men (up from 27.3 in 2008) and 28.6 years of age for females.
This trend has yet to show signs of change and is caused by a range of
issues unique to the Korean employment market. Many young Koreans are highly
educated with an estimated 70 per cent enrolling in tertiary education. The
catch is that the majority of the 70 percent have sought tertiary education in
order to win jobs with major corporations which contribute to around 80% to Korea’s
GDP but only make up about 10 per cent of jobs available. Samsung Group for
example regular record some 100,000 applicants every job season for entry level
jobs such is the competition for what are widely considered as the prestigious
jobs with prestigious companies in Korea.
Failure to secure a decorated job means many young people are postponing
their entrance in to the work force to pursue extra education such as language
certificates, going on overseas exchanges or working holidays and dedicating
gap years to extended study for notoriously tough company and public
institution entrance exams. Not only contributing to the aging workforce
equation but also investing thousands of family savings in the process.
South Korea’s men are also required to do a minimum of around two years
of military service unless exempted for medical and other reasons. This
effectively stops new university graduates from entering the workforce if they
have yet to complete their service as many companies will require new recruits
to have completed their service before entering a company. This is just one way
Korean companies are discriminating during their recruiting process.
While there is a need for a monumental change in Korean society views
towards skilled labour and “blue collar” jobs I also believe that major Korean
corporations which set the tone for the entire industry have a role to play in
combating the growing age of recruits. This could entail a variety of policies
such as a reduction in the filtering techniques used to identify “suitable”
candidates, A change in perception around military service and unpaid leave or even
scrapping English language test
requirements.
The rising age of recruits is also a problem for Korean companies
operating in the global market. Korean Companies with overseas offices in
countries such as in Australia are likely to encounter distrust and factions
amongst the workforce around the sensitivity of status and pay. Korean society
and companies place a large importance on age and hierarchy in the
workforce. With new graduates entering
at the age of 30 most will not be in mid-management roles until their 40s.
Koreans Expats sent to work in overseas offices will as a consequence encounter
workers of the same age but of significantly higher status and pay compared to
themselves. This unique issue is particularly troublesome when 30-35 year old
foreign managers are dealing with 45 year old Korean co-workers who refuse to treat
their ideas and opinions with the appropriate respect because of the age gap –
something I have encountered first hand in my role consulting to Australia –
Korean businesses.
Whatever the policy, Korean corporations need to recognise that they are
part of the cause but can be part of the solution. In modern Korea, Chaebols are
at the center of Korean society and culture and a shift in attitude from them
will trickle down to a shift in society’s perspective. It’s simple to see that
more must be done to promote young Koreans to enter into the workforce at a
younger age and Korean Chaebols will have a large role to play.
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