Korean companies cut back on hiring, prefer old newbies

Economy

Published: 08 Mar. 2023, 18:19 Updated: 08 Mar. 2023, 19:51

Korean companies cut back on hiring, prefer old newbies

Job seekers look through job postings on a bulletin board at a job fair in Seocho District, southern Seoul, on March 2. [NEWS1]

The terrible job market is set to remain that way as a majority of Korean companies say they have no plans to hire new graduates.

Of 126 large Korean companies, 45.2 percent said they will hire new recruits in the first half, according to a report released by the Federation of Korean Industries (FKI) on Tuesday. Research & Research, the firm that carried out the survey, requested Korea’s largest 500 companies in terms of sales to answer the survey, and 126 did so between Feb. 10 to 27.

Of those, 54.8 percent said they either won't hire recent college graduates or have not set any plans yet. In 2022, the percentage was 50 percent.

Of those that plan to increase their labor force, 50.8 percent said they will recruit as many people as they did last year, 24.6 percent will reduce the number and the other 24.6 percent forecast an increase. Last year, 4.3 percent said they will have fewer people joining.

The companies blamed economic weakness and belt-tightening management as the top two reasons behind the situation.

Companies are looking for experienced employees. Of the companies that answered the survey, 31.1 percent said they will hire employees just whenever there are empty seats, ditching the conventional "open recruitment" that traditionally targets less experienced, recent college graduates.

This move comes as companies try to avoid a massive number of new hires during the recruitment period but instead hire experienced workers.

The graph shows companies' plans on hiring new employees in the first half of this year. [FEDERATION OF KOREAN INDUSTRIES]

A full 28.3 percent said they will strengthen the hiring of experienced workers.

The demand for science-related hires is increasing as industries become more technologically advanced, the report said.

FKI’s report also said that one out of five new recruits last year was a “secondhand” recruits, or a worker with relevant work experience that signs up as rookies. Last year’s secondhand recruits had 1.4 years of work experience on average.

“Businesses are favoring experienced newcomers because they prefer work-ready employees who can adapt to changes in the rapidly changing business environment,” the FKI said in its report, adding that this trend will continue going forward.

Companies said that in order to encourage new hiring, the government needs to lift regulations on labor and industry and provide benefits to companies that hire more people, according to the report.

“There is a higher chance the job market will shrink further as companies make conservative changes in management amid low earnings caused by the economic slump,” FKI’s economic research division head Choo Kwang-ho said.

Jobs can be saved if the government helps businesses with deregulation and tax support, Choo added.

BY KO SUK-HYUN, SOHN DONG-JOO [sohn.dongjoo@joongang.co.kr]