SK Group to transition 5,800 nonregular workers

SK Group’s decision to promote its 5,800 nonregular workers to full-time employees is creating a buzz over whether other large companies will do likewise.

SK Group, nation’s third-largest conglomerate, said Tuesday that 4,300 telemarketers and call center workers at SK Telecom and SK Planet will become full-time employees, while 1,500 additional temporary workers at SK Networks, SK Securities and SK Engineering & Construction will also be promoted by the end of this year.

The group said the move, the first of its kind by a top-four conglomerate, is part of an effort to decrease its temporary worker percentage from 12 to 3 by 2015. SK employs 79,000 workers, 10,000 of them nonregulars.

However, it denied the decision has anything to do with a “rescue” of its Chairman Chey Tae-won, who is in prison for embezzlement.

“As a conglomerate with social responsibility, we decided to create good jobs and promote temporary workers to full-time employees,” said Kim Chang-geun, chairman of the Supex Council, SK Group’s highest decision-making body, on Tuesday.

Industry insiders said SK’s plan is in line with President Park Geun-hye’s pledge to reduce the number of the country’s nonregular workers.

Other companies, meanwhile, have already promoted nonregular workers or announced plans to do it.

Hanwha Group, the nation’s 10th-largest conglomerate, announced earlier this year that it would promote 2,043 temporary workers, mostly at hotel or resort facilities, to regular workers starting in March.

E-Mart, the nation’s largest discount chain, announced that its 11,300 nonregular workers had been promoted, while Lotte Mart also said 1,000 temporary workers will be switched to full time employees.

Hyundai Motor, the nation’s largest automaker, also proposed to its labor union that the company will make 3,000 workers among its in-house subcontractors regular employees by 2016, although the union wants all 6,800 nonregular workers to receive the benefit.

And it seems more companies are likely hop on the bandwagon. According to a recent survey by Korea Chamber of Commerce and Industry, of 234 companies that hire temporary workers, 40.3 percent said they had promoted nonregular workers, while 31.9 percent of them said they are considering it.

But as promotions occur, industry insiders said the burden on companies will increase due to rising labor costs. According to SK Group, switching 5,800 irregular workers to full-time employees will cost 20 billion won ($18 million) in a year, while E-Mart estimates that an additional 60 billion won will be needed for the 11,300 workers if promoted.

However, other experts say that although labor costs might increase, productivity could get a boost from newly promoted workers who feel a “sense of belonging.” According to data from E-Mart, cashiers, who just got full-time employee status, performed better than in the past as their miscalculations decreased by 75 percent and working speed got faster.

The government has been pushing to solve the problem of nonregular workers this year. In late March, the Ministry of Employment and Labor said it will establish guidelines for switching nonregular workers to full-time employees by 2014. It also said the government will move to promote its own nonregular workers starting in 2015. There are about 350,000 nonregular workers in the public sector.

“We expect that if the government becomes an example, the private sector would naturally follow,” said a labor ministry official. “The guideline will not be compulsory; instead, it will be close to a ‘proposal’ to companies.”

Nonregular workers generally welcome the trend, but worry they will be treated differently from existing regular workers despite receiving same benefits, such as insurance and retirement programs.

There was even a case reported of some experienced nonregular workers refusing regular-worker status because they would have taken a cut in pay.

By Joo Kyung-don, Chang Chung-hoon [kjoo@joongang.co.kr]