"Top 30 Group Listed Companies: Operating Profit per Person Down 1% While Labor Costs Rise 2.4%"

[Asia Economy Reporter Jeong Hyunjin] An analysis revealed that the operating profit per employee of listed companies in South Korea's top 30 conglomerates has decreased by an average of 1.0% annually over the past five years, while labor costs per employee have increased by an average of 2.4% annually.

On the 24th, the Korea Economic Research Institute under the Federation of Korean Industries released a report titled 'Financial Performance and Labor Cost Analysis of Listed Companies in the Top 30 Groups from 2016 to 2020,' analyzing the sales, operating profit, and net profit of 184 non-financial KOSPI and KOSDAQ companies from the top 30 groups including Samsung, Hyundai Motor, SK, and LG.

As a result, last year, sales per employee were 993.82 million KRW, labor costs per employee were 80.26 million KRW, and operating profit per employee was 62.35 million KRW. Compared to 2016, sales per employee increased by 3.72 million KRW, operating profit per employee decreased by 2.55 million KRW, and labor costs per employee rose by 7.19 million KRW. In terms of growth rates, labor costs per employee increased by an average of 2.4% annually, operating profit per employee decreased by an average of 1.0% annually, and sales per employee increased by 1.0% annually.

(Data provided by Korea Economic Research Institute)

In particular, excluding Samsung Electronics and SK Hynix, which have large operating profits, operating profit per employee significantly declined. The operating profit per employee of Samsung Electronics and SK Hynix increased substantially from 144.3 million KRW in 2016 to 180.98 million KRW last year.

Although the operating profit per employee of the top 30 group listed companies was 62.35 million KRW last year, excluding Samsung Electronics and SK Hynix, it dropped to 39.05 million KRW, according to the Korea Economic Research Institute. Compared to 2016, the operating profit per employee of the top 30 group listed companies decreased by 2.55 million KRW last year, whereas excluding Samsung Electronics and SK Hynix, it decreased by 12.63 million KRW, showing a larger decline.

Labor costs per employee of the top 30 group listed companies, excluding Samsung Electronics and SK Hynix, increased by an average of 2.2% annually over the past five years, but sales per employee only increased by an average of 0.3% annually, the Korea Economic Research Institute analyzed. Sales per employee of these companies were 908.8 million KRW last year, about 101.3% of the 2016 level, while labor costs per employee rose to 73.61 million KRW last year, about 109.1% of the 2016 level.

Choo Kwang-ho, head of the Economic Policy Office at the Korea Economic Research Institute, said, "While major advanced countries such as the United States, Germany, and Japan generally have job- and performance-based wage systems, South Korea still has six out of ten large companies applying seniority-based wage systems where wages increase annually based on years of service, despite years of discussions on wage system reform." He added, "For our companies to gain global competitiveness, it is necessary to shift to a wage system linked to job roles and performance."

This content was produced with the assistance of AI translation services.