"7 out of 10 Top 500 Companies Have No or Undecided New Hiring Plans for the Second Half"

Hankyung Research Institute, Survey on Top 500 Companies by Sales

Data provided by Korea Economic Research Institute

[Asia Economy Reporter Kim Heung-soon] Due to the prolonged COVID-19 pandemic, about 7 out of 10 major domestic companies have either not planned or are not planning new hires for the second half of this year, according to a recent survey.

The Korea Economic Research Institute (KERI), under the Federation of Korean Industries, commissioned Research & Research to survey the top 500 companies by sales on their 'New Hiring Plans for the Second Half of 2021.' On the 5th, KERI announced that 67.8% of respondents answered in this way.

Specifically, 54.5% of companies had not established new hiring plans, and 13.3% had no plans for new hires at all. Companies that had set plans accounted for 32.2%. Among them, 53.8% intended to increase hiring compared to last year, 35.9% planned to maintain a similar hiring scale as last year, and 10.3% planned to reduce hiring compared to last year.

KERI explained, "Considering the recent fourth wave of COVID-19, the cold spell in the hiring market is expected to continue," adding, "It can be interpreted that some companies with employment capacity are doing their best to create jobs."

Reasons for Hesitation in New Hiring
Economic Downturn → Lack of Internal Demand → Employment Rigidity, etc.

Regarding the reasons companies answered that they would not hire new employees or would not increase hiring, the order was ▲Deterioration of domestic and international economy and industry conditions due to prolonged COVID-19 (32.4%) ▲Difficulty in restructuring existing workforce due to employment rigidity (14.7%) ▲Increased labor cost burden such as minimum wage hikes (11.8%). Among other opinions (32.3%), 'lack of demand within the company (90.9%)' accounted for the majority.

Companies that responded they would increase new hires cited reasons such as ▲Improved industry outlook of the company’s sector (38.1%) ▲Securing future talent regardless of economic conditions (33.4%) ▲Meeting social expectations that large companies should increase new hires (9.5%) ▲Increased demand for personnel in new industries or new job categories such as ESG (Environmental, Social, and Governance) and the 4th Industrial Revolution (9.5%).

Data provided by Korea Economic Research Institute

Expansion of Non-face-to-face, Experienced, and Rolling Recruitment

Regarding changes expected in the hiring market for the second half of the year, companies most frequently cited ▲Increase in untact (non-face-to-face) recruitment adoption (24.3%). Next were ▲Strengthening of experienced hires (22.5%) and ▲Increase in the proportion of rolling recruitment (20.3%). Other anticipated changes included ▲Increase in hiring talent related to the 4th Industrial Revolution (9.4%), ▲Increase in new hires utilizing artificial intelligence (AI) (8.7%), and ▲Expansion of blind recruitment to enhance fairness (7.2%).

The proportion of companies that used or are considering using untact methods for new college graduate recruitment this year was 71.1%, an increase of 16.9 percentage points compared to last year. The proportion of companies using rolling recruitment was 63.6%, up 11.1 percentage points from the previous year. Among these, 24.0% conduct only rolling recruitment, 39.6% conduct both open and rolling recruitment, and only 36.4% conduct open recruitment exclusively.

Increased Proportion of ESG Talent Recruitment

As the importance of ESG management has recently emerged, the movement of companies to recruit related talent is also increasing. The proportion of companies planning to hire ESG-related talent in the second half of this year was 25.6%, an increase of 11.1 percentage points compared to the first half when the survey began (14.5%).

Currently, 74.4% of companies do not recruit ESG talent, among which 32.2% plan to respond to ESG issues by utilizing existing personnel through retraining or department transfers. Other responses included ▲No specific response plan (28.9%) ▲Maintaining current ESG-related personnel (27.8%) ▲Utilizing external consulting firms (5.6%).

"Regulatory Relaxation and Support for New Industry Development Needed for New Hiring"

Companies most frequently cited 'Relaxation of corporate regulations in labor and industrial sectors (38.8%)' as the policy that the government and National Assembly should focus on to increase new college graduate hiring. This was followed by ▲Support for fostering growth engines in new industries (25.6%) ▲Expansion of incentives for companies increasing employment (24.0%) ▲Improvement of the dual structure of the labor market, which is biased toward regular workers and unionized workers (5.8%) ▲Resolving mismatch through strengthened career guidance and provision of employment information (5.0%).

Choo Kwang-ho, Director of Economic Policy at KERI, stated, "Due to the recent resurgence of COVID-19, uncertainty in the recovery of the real economy has increased, and the youth employment market remains uncertain," adding, "To resolve youth unemployment, efforts must be concentrated on expanding companies' employment capacity through regulatory relaxation, enhancing employment flexibility, and expanding support in new industry sectors."

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