Korea’s fast aging population and subsequent risk to their economy and pension funds is a recurring and well documented issue in South Korea. With an official retirement age much lower than its western counterparts at 60; Korean workers despite their notoriously long hours actually work less than the average worker in other developed countries.
However the aging workforce issue won’t simply be resolved by increasing the retirement age, although it is likely to form a significant part of a nationwide strategy that will also include increased employment of mothers returning to the workforce, Korea also has to deal with a continual increasing average age of first year workers
I have documented this in my previous articles but a recent survey conducted by Dong-A Ilbo and recruitment website Incruit.com, found that the average age of new office workers in Korea was a staggering 33.2 years of age for men (up from 27.3 in 2008) and 28.6 years of age for females.
This trend has yet to show signs of change and is caused by a range of issues unique to the Korean employment market. Many young Koreans are highly educated with an estimated 70 per cent enrolling in tertiary education. The catch is that the majority of the 70 percent have sought tertiary education in order to win jobs with major corporations which contribute to around 80% to Korea’s GDP but only make up about 10 per cent of jobs available. Samsung Group for example regular record some 100,000 applicants every job season for entry level jobs such is the competition for what are widely considered as the prestigious jobs with prestigious companies in Korea.
Failure to secure a decorated job means many young people are postponing their entrance in to the work force to pursue extra education such as language certificates, going on overseas exchanges or working holidays and dedicating gap years to extended study for notoriously tough company and public institution entrance exams. Not only contributing to the aging workforce equation but also investing thousands of family savings in the process.
South Korea’s men are also required to do a minimum of around two years of military service unless exempted for medical and other reasons. This effectively stops new university graduates from entering the workforce if they have yet to complete their service as many companies will require new recruits to have completed their service before entering a company. This is just one way Korean companies are discriminating during their recruiting process.
While there is a need for a monumental change in Korean society views towards skilled labour and “blue collar” jobs I also believe that major Korean corporations which set the tone for the entire industry have a role to play in combating the growing age of recruits. This could entail a variety of policies such as a reduction in the filtering techniques used to identify “suitable” candidates, A change in perception around military service and unpaid leave or even scrapping English language test requirements.
The rising age of recruits is also a problem for Korean companies operating in the global market. Korean Companies with overseas offices in countries such as in Australia are likely to encounter distrust and factions amongst the workforce around the sensitivity of status and pay. Korean society and companies place a large importance on age and hierarchy in the workforce. With new graduates entering at the age of 30 most will not be in mid-management roles until their 40s. Koreans Expats sent to work in overseas offices will as a consequence encounter workers of the same age but of significantly higher status and pay compared to themselves. This unique issue is particularly troublesome when 30-35 year old foreign managers are dealing with 45 year old Korean co-workers who refuse to treat their ideas and opinions with the appropriate respect because of the age gap – something I have encountered first hand in my role consulting to Australia – Korean businesses.
Whatever the policy, Korean corporations need to recognise that they are part of the cause but can be part of the solution. In modern Korea, Chaebols are at the center of Korean society and culture and a shift in attitude from them will trickle down to a shift in society’s perspective. It’s simple to see that more must be done to promote young Koreans to enter into the workforce at a younger age and Korean Chaebols will have a large role to play.