Samsung, more chaebol cut back on new hiring
The company said it will recruit between 2,500 and 3,000 new college graduates, 500 to 1,000 less than last year.
Since the global financial crisis of late 2008, Samsung has maintained a level of recruitment of 3,500 or more college students every year.
The job market for young people coming into the work force, especially at conglomerates, is looking worse daily. Companies are struggling with an economy that was hit by a strong won and very weak domestic consumption following the sinking of the Sewol ferry in April.
A rising number of college graduates, including some who have remained an additional year or two on campus instead of graduating after four years in hopes of landing a better job, has worsened the situation by raising competition.
The number of college graduates who have stayed on campus for more than four years applying for jobs in the second half amounts to nearly 500,000, fully one-third of the 1.5 million college graduates currently seeking jobs.
Samsung’s sudden decision to cut back on recruiting was largely because the profit it enjoyed from its smartphone business isn’t what it was even a year ago and it no longer has the leeway to hire as many young people.
Securities analysts are predicting that the company’s third-quarter operating profit, which hit a record of 10 trillion won ($9.48 billion) a year ago, could shrink even below 4 trillion won - a 60 percent decrease or more.
“The situation has become difficult as Chinese companies are threatening our position with low-end phones while Apple introduced smart devices with larger screens,” said an official within Samsung’s future strategy department.
“[Under such circumstances,] it is difficult for us to make new hires in record numbers.”
Samsung Electronics isn’t the only one cutting back on new hires.
The nation’s leading automaker, Hyundai Motor, is planning to hire roughly 2,460 applicants with college degrees in the second half of the year.
That’s 300 less than the 2,750 hired last year.
And the number of applicants has risen to a new record.
The automaker said more than 40,000 applicants turned in their resumes this year, the highest ever.
“In the first half we have recruited relatively large numbers of people and therefore in the second half, the number of new recruits will shrink,” said a Hyundai Motor official. “In the first half next year, we plan to increase the number of new college recruits who will be making overseas sales in markets like Brazil and Russia.”
The same story is happening at other big companies. LG Group is planning to hire 1,000 new college recruits, half the amount as last year; more 66,000 young people applied. Lotte Group is planning to hire 1,300, including interns, and roughly 60,000 applied.
A silver lining for job seekers is that at least some Samsung financial affiliates including Samsung Life Insurance, Samsung Card and Samsung Securities are each planning to hire 100 to 200 college graduates in the first half of next year.
The overwhelming number of job applicants is a result of rising numbers of young people remaining on campus for additional years of study or people reapplying after failing to land a job. They are making competition for the limited spaces much more difficult.
According to reports and data provided by the Ministry of Education and the Korea Research Institute for Vocational Education and Training, as of the end of June, job seekers with college degrees who have stayed on campus for an additional year or two amounted to 475,271.
When including college seniors, the number of applicants seeking jobs totals 960,000.“When adding those who have graduated but haven’t got a job yet, the number of people preparing for jobs goes up between 500,000 and 600,000,” said Seo Mi-young, Incruit vice president.
“In the case of students who majored in non-engineering subjects, the competition is much worse,” Seo said.
One such job seeker is a 25-year-old woman who asked to be identified by her family name, Choi. Choi said she quit her job of two years at a fast fashion company and decided to try her luck at a better company. She is sending her resume to travel and material development companies not as an experienced worker but rather as a new recruit, starting out fresh.
She said she wants to work in the brand management field, which she has set her heart on.
“Because I had constant quarrels with my parents who criticized me for quitting a job at a decent company, I even moved out,” said Choi. “I’m covering my daily expenses and the fees on the English exams from the 4 million won I got as severance.”
Jin Hee-seop, a 24-year-old senior majoring in mechanical engineering at Korea University, has been under a lot of pressure to find a job. He sent his resume to 20 companies including Hyundai Motor’s R&D section, the construction unit of Samsung C&T and plant business at Daelim Industries.
Within his class he is considered one of the smart ones with scores of 945 on his Test of English for International Communication (Toeic) exam. But while applying for several summer internships, he found there were older applicants with better specs than him.
“Until then I thought I had relatively competitive specs, but when competing against applicants with better skills, it seems getting a job isn’t going to be easy,” Jin said.
As more and more students are hitting the library to raise their competitiveness instead of immediately finding a job after graduation, the opportunities for fresh graduates is getting more difficult.
When Daewoo International recruited 76 new employees with college degrees in the first half of this year, 31 were students who already graduated from school.
“On the first floor there were roughly 60 students in the library, but it seemed five of them already graduated,” said 23-year-old Yoon Sora, a Sookmyung Women’s University graduate. “It seemed as though they were preparing for jobs with books like Toeic and aptitude test preparation books piled up on their desks.”
According to Saramin, a company that provides job information, 74.7 percent of 451 companies that took part in a recent survey said they preferred students who weren’t fresh out of college. They said they preferred some experience.
As the job market gets more competitive, some applicants are going to extremes, such as undergoing plastic surgery to get a job.
The simplest changes are getting dental treatments or eye surgery.
“This month alone there were roughly 500 to 600 patients who have gotten plastic surgery on their eyes or nose or both,” said Lee Dong-hwan, an official at Regen Medical Group, which specializes in plastic surgery.
The situation isn’t expected to improve soon.
According to a study by Saramin, in a survey of 333 people who have job experience of less than two years, 78.2 percent said they have the intention to apply for another job as a fresh recruit rather than an experienced worker. That will put them in direct competition with fresh graduates.
The situation is particularly poor for students who majored in fields outside of engineering. People with degrees in literature or philosophy are struggling even more.
A few years ago, the biggest advantages when competing for jobs at companies was so-called specs, which included school grades, Toeic scores and various certificates of study in specialized fields. Regardless of one’s major in college, as long as you had good test scores, the chances were better.
Today, however, although specs still play a role, it is different from the past. Companies prefer hiring applicants with practical skills that can immediately be applied on the job.
None of the Samsung companies that are currently hiring are selecting students who majored in such non-engineering fields.
Samsung Electro-Mechanics is only hiring students who majored in electronics, electrics, machinery, material metals and chemistry.
The sales and management departments, which is where non-engineering majors went, aren’t hiring. Samsung Display is hiring software developers while Samsung Techwin, Samsung Total Petrochemical, Samsung BP Chemicals and Samsung Bioepis are all hiring engineering majors.
LG Display, LG Chem, Posco ICT hired non-engineering majors last year but decided not to this year.
But not all liberal arts majors are doomed, as there is demand from conglomerates for people who majored in foreign languages such as Japanese and Chinese.
“Preferences for applicants who speak Chinese have grown significantly as China has risen as a major economy,” said a high-ranking Samsung Group official. “But there is a serious shortage of people who are fluent in Japanese, whose companies we have close business relations with.”
Some major conglomerates are showing interest in students who majored in other foreign languages such as Malaysian, Indonesian and Vietnamese.
Those who spoke Vietnamese or Indonesian easily landed a job at Lotte Group in 2011, as the Korean retail giant has been expanding its business in Vietnam and Indonesia.
BY KIM YOUNG-MIN AND LEE HYUN-TAEK [email@example.com]