Workers at SMEs to get smaller holiday bonuses

The amount of Chuseok bonuses employees at small and midsize companies will receive this year is expected to be about 200,000 won ($196) less than what they received last year, a survey showed yesterday.

The decrease is mainly due to companies’ deteriorated financial status due to dropping sales and delayed payments for orders that have been delivered.

Ahead of the national holiday next month, the Korea Federation of Small and Medium Business surveyed the management of 902 small and midsize companies on their budget for Chuseok. The results showed that 47.2 percent of companies are facing financial difficulties, a 3.6 percent increase from the same time last year. Only 13.7 percent of companies said their management of finances is progressing “smoothly.”

Asked why they are worse off financially this year, 77.7 percent of companies said their sales were down (up 9.5 percentage points from last year) while 52.8 percent said it was due to a delay in payments they were scheduled to receive for orders (up 3.6 percentage points). Multiple answers were allowed.

With their poor financial status, companies said they plan to spend less on employees’ bonuses for Chuseok. Of the 902 companies, 61.2 percent said they plan to give out holiday bonuses, down 5.3 percentage points from last year. The total average amount of the bonuses dropped from 830,000 won to 622,000 won.

“The survey showed that each small and midsize company needs an average of 223.6 million won of funds to spend on Chuseok [on bonuses and gifts], but each of them falls short by about 64.7 million won, which is 28.9 percent of total spending,” said an official from the federation. Of the businesses, 35.7 percent said that they could not take out loans to solve the problem.

BY LEE EUN-JOO [angie@joongang.co.kr]