Korean companies encourage workers to have babies

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Korean companies encourage workers to have babies

Published: 29 Apr. 2023, 07:00 Updated: 04 May. 2023, 18:33

It's not every day that an employee receives a visit from their company's CEO at home to congratulate them on the birth of multiple babies.

But that's exactly what happened when Kim Hwan, a 27-year-old employee of the Posco Group and father of Korea's first naturally born set of quadruplets, received a surprise visit from his company's CEO, Choi Jeong-woo.

The anecdote reflects the length that companies in Korea, the country with the world’s lowest birth rate, will go to encourage people to have more kids.

Companies are offering maternity and paternity leave, shortened work hours for pregnant employees and daycare centers. In addition, some firms are providing financial assistance for infertility treatments.

Posco Holdings' CEO Choi made the trip to congratulate the parents in Songdo, Incheon, on April 13, and meet the adorable new additions to the family.

"I was really surprised," the babies' mother, Bak Do-re, told the Korea JoongAng Daily.

“I was told that employees from my husband's company would be visiting our house,” Bak said. “But on the day of the visit, it seems that the CEO expressed interest in joining as well. I didn't expect him to come all the way here.”

Choi brought along a wagon stroller for the babies, their favorite cookies and some spending money.

This wasn't the first time the steel-making company had provided support.

The family received costs for in-vitro fertilization (IVF) treatment, and when the quadruplets were born last year, Posco sent a nine-seater van, baby supplies worth 2 million won ($1,500), and a cash gift of 36 million won to be used for childcare services.

“We recognize that Korea’s low birthrate is a pressing and significant issue that not only the government but also companies must work together to solve,” a spokesperson for Posco Holdings said. “Posco declared 'Corporate Citizenship' as its management philosophy in 2018, and has since held conferences related to population and improved related welfare systems.”

Last year, Korea's total fertility rate hit an all-time low of 0.78, making it the lowest among the member countries of the Organization for Economic Cooperation and Development (OECD) for the tenth consecutive year.

Amidst the serious issue of low birth rates in Korean society, companies are implementing various policies to support employees juggling work and parenting responsibilities. These efforts are aimed at fostering a supportive culture that facilitates childbirth and child-rearing, allowing employees to develop their professional skills without career disruptions.

Lotte Group introduced automatic maternity leave for women and mandatory paternity leave for men. This is the first time a major corporation in Korea has implemented both policies.

Since 2012, new moms at Lotte have been able to take up to two years of maternity leave without seeking permission from their superiors. And in 2017, the company went one step further by mandating that new dads take at least one month of paternity leave when their spouse gives birth.

To sweeten the deal, Lotte fully pays the difference between regular salary and government support in the first month of leave, so that male employees do not hesitate to take leave for economic reasons. According to the conglomerate, over 8,000 male employees have taken paternity leave from 2017 to 2022.

Samsung Electronics Executive Chairman Lee Jae-yong, then Vice Chairman, has a meeting with working mom employees in August 2020 [SAMSUNG ELECTRONICS]

Samsung Electronics expanded shortened work hours for all pregnant employees starting from April. Under current labor laws, pregnant women can apply for a two-hour reduction in work hours per day, but only during the first 12 weeks of their pregnancy or after week 36. But the company expanded it to apply before the 12-week mark.

Samsung Electronics also introduced a new “Reboarding Program” to help working moms and dads catch up on missed work after taking parental leave and to make the transition back to work as smooth as possible.

Employees who return from parental leave are given priority when it comes to choosing their new work department, and Samsung also supports working from home for those who need it. It also offers psychological counseling services and educational programs for parental leave takers.

Some have introduced new policies to support employees struggling with infertility and adoption.

SK hynix offers support of 500,000 won per IVF or artificial insemination procedure for infertility with no limit on the number of procedures. The company is also providing five days of paid leave for employees dealing with infertility, as well as shortened work hours for expectant mothers before their delivery.

CJ Group has implemented a new policy allowing female employees undergoing IVF to take up to six months of paid leave. The company also provides up to 14 days of paid leave for employees who are in the process of adopting a child.

A CJ spokesperson explained that the company recognizes the need for employees undergoing fertility treatments to have a comfortable and supportive environment, where they can focus solely on their treatment. "We want to give our employees more flexibility and choice to make the best decision for themselves," the spokesperson said.

HD Hyundai has opened a new daycare center for working parents that can accommodate up to 300 children. The spacious center, housed in two stories, features six play areas for kids to enjoy. With extended hours from 7 a.m. to 10 p.m., the daycare offers a convenient option for parents with demanding work schedules.

HD Hyundai's free in-house Dream Boat daycare center in Seongnam, Gyeonggi, which can look after up to 300 children [HD HYUNDAI]

Experts explain that Korea’s low birthrate is also a serious issue for companies.

The declining population will not only lead to a decrease in the workforce, but also a contraction in the domestic market.

"When we look at the future domestic market, it ultimately comes down to the number of people, leading companies to come up with solutions,” said Cho Young-tae, a professor of demographics at Seoul National University.

“Like the ESG management philosophy and so-called Capitalism 4.0, the corporate world has now reached a stage where it is required to solve various societal and environmental issues such as low birthrate,” said Suh Yong-gu, a professor of business administration at Sookmyung Womens’ University.

Yet many small businesses do not have the capacity to take additional measures amid the current economic downturn, and their employees often hesitate to use or cannot use the benefits that the government provides. Even among large companies, many still lack adequate response measures.

A recent public survey acquired by Gabjil 119, an organization which campaigns against office abuse, found that 45.2 percent of the 1,000 workers aged 19 and older nationwide responded that they could not use their parental leave freely.

"The problem now is not the existence of the childcare-related welfare system in companies, but whether employees can utilize it," Cho said. "Individuals who feel a higher level of pride in working in a stable and supportive workplace are more likely to express an intention to marry and have children."

According to Prof. Suh, there is a tendency in Korea to shy away from hiring competent women due to concerns that they may miss time or quit if they give birth.

"Typically, chairmen who are now in their 60s are those who did not receive proper education on gender equality, therefore it is crucial to raise awareness about the importance of establishing a company that provides support for giving birth," Suh explained.

He added, "While it may be challenging for small and medium-sized enterprises (SMEs) to implement welfare programs, local governments can encourage collaboration with SMEs in the same region by providing budget support for operating a daycare center."

BY SEO JI-EUN [seo.jieun1@joongang.co.kr]