Banks put heads together on hiring practices

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Banks put heads together on hiring practices

Following a series of hiring scandals, Korea’s banks are coming together to implement changes in recruitment to make it more fair and transparent.

Major banks including Woori Bank and Shinhan Bank were found to have employed the unqualified children of company executives, lawmakers and financial regulators over qualified job applicants.

As these scandals surfaced, the Korea Federation of Banks drafted a set of new standard recruitment procedures - including written exams - to prevent hiring through connections.

The exams are expected to offer a standardized method of assessing candidates, something that document screenings and interviews have failed to do. Currently, only a few banks including KB Kookmin, KEB Hana and NH Nonghyup ask applicants to sit in for written exams. Woori Bank reintroduced written exams for the first time in 10 years this spring.

Some fear that written exams will be an ineffective way of selecting future bankers, however. “Banking is a service job, and recently, as competition is getting fiercer, we need people who are good at sales as well,” said one HR manager at a bank. “This skill can’t really be reflected by the results of a written exam.”

Other proposals include contracting external agencies to screen documents, adopting a blind interview process and inviting people from outside the company to conduct interviews.

The banks plan to completely eliminate staff recommendations of new hires.

Currently, 10 banks are participating in the task force to map out new standard hiring procedures. Among them are the country’s top four private banks - KB Kookmin Bank, Shinhan Bank, KEB Hana Bank and Woori Bank. A draft proposal has already been submitted for approval to the Financial Services Commission.

“We will hear back from the Financial Services Commission next week and finalize the standard procedures,” said a spokesman from the Korea Federation of Banks.

Though banks will not be forced to adopt the new procedures, most are expected to incorporate them for the upcoming fall hiring season, when almost 3,000 new jobs in the industry are expected to be up for grabs.

This fall, Woori Bank plans to hire 550 new employees while Shinhan Bank plans to hire at least 450. KB Kookmin Bank plans to hire more than 500 and KEB Hana Bank 250. Other major banks like NH Nonghyup Bank, the Industrial Bank of Korea, the Korea Development Bank and the Export-Import Bank of Korea will also be calling for new recruits.

Many job seekers want to land a job as a banker, one of the most prestigious and lucrative careers in the country. Last year, the average annual salary of full-time male employees at all four of Korea’s major commercial banks exceeded 100 million won ($93,780).

The average annual salary for full-time male employees at KB Kookmin Bank was 110 million won last year. Full-time male employees at this bank worked on an average of 20 years and four months. KB Kookmin Bank had 1,057 branches in 2017, the highest number among all banks, as well as the highest number of employees at 17,222, according to the Financial Supervisory Service’s Financial Statistics Information System. It had 8,960 full-time male employees.

The annual average salary for full-time male workers at Shinhan Bank also was 110 million won. The average length of employment for full-time male workers at Shinhan was slightly shorter at 17 years.

At 121 million won, KEB Hana Bank offered the greatest average annual salary for full-time male workers among the four major private banks. Full-time male employees worked for an average of 17 years and six months.

“Because we tried to match the salary of the Korea Exchange Bank, which paid the most in the industry, our annual salaries seemed high,” said a KEB Hana Bank spokesman. Hana Financial Group acquired the Korea Exchange Bank, or KEB, in 2012.

Woori Bank, which was privatized in 2016, offered the lowest annual salary for full-time male workers at 107 million won.

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