Over half of Korean companies not offering Chuseok bonuses, citing financial stress

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Over half of Korean companies not offering Chuseok bonuses, citing financial stress

Published: 15 Sep. 2024, 14:00

Customers browse gift sets at a supermarket. [NEWS1]

An increasing number of Korean companies is forgoing the traditional practice of giving bonuses for the Chuseok harvest holidays due to financial strains.

A recent survey by job recruitment platform Saramin indicates that Chuseok generosity may be waning among Korean employers. Only 47.7 percent of the 470 companies polled plan to offer incentive bonuses to employees in honor of the upcoming holiday, marking the lowest figure since Saramin began tracking related data in 2012.

When asked their reasoning, 40.7 percent of the companies stated that they'd elected to provide gift sets instead of cash incentives. Others cited factors including a lack of financial capability, lack of contractual obligation, financial jeopardy and failure to achieve first-half goals.

Among the employers that are tightening their belts, 18.3 percent provided cash incentives last year. This suggests that changes in managerial strategies have played a significant role in the decision to eliminate or reduce bonuses.

A businessperson hands out 50,000 won bills. [GETTY IMAGE]

The average bonus given was 665,600 won ($495). The most common reason cited for offering incentives was employee morale, followed by contractual obligation, employee loyalty and efforts to ease employees' financial burdens during Chuseok. Other minor factors included strong first-half performance and improved financial status.

The survey also showed that 78.3 percent of companies plan to provide gift sets instead of bonuses.

The average value of these gifts is 81,000 won, with popular items, including processed foods like ham and tuna, making up 45.1 percent, followed by fruits, like pears and apples; meat, such as Korean beef and rib-eye; health supplements like ginseng; and personal care items.

Companies that chose not to provide either bonuses or gift sets cited economic downturn, existing bonus structures and company-wide challenges.

BY YOON SEUNG-JIN [yoon.seungjin@joongang.co.kr]