"Pay for the Work Done"... IT Industry Sees the End of the Comprehensive Wage System

Kakao Pay will abolish the comprehensive wage system in July. The photo shows the Kakao Pay KOSPI listing ceremony held last year at the Korea Exchange in Yeouido, Seoul.

[Asia Economy Reporter Seungjin Lee] The IT industry, which has been experiencing a continuous shortage of developers, is seeing the disappearance of the comprehensive wage system. This is due to actively reflecting demands for improved working conditions to prevent losing talented employees to competitors.

According to the industry on the 19th, Kakao Pay decided to introduce a selective working system in March and abolish the comprehensive wage system in July to improve employee working conditions. From next month, Kakao Pay will implement a partial selective working system with a set core time during essential working hours for two months, and from May, it plans to implement a fully selective working system without core time. Once the selective working system is implemented, employees can flexibly adjust their working hours within 52 hours per week according to their workload, regardless of the current working system from 10 a.m. to 7 p.m.

As a result, among the major subsidiaries within the Kakao Group, only Kakao Mobility will continue to maintain the comprehensive wage system. Kakao Games abolished the comprehensive wage system in April 2019 and introduced the 'pre-agreed overtime system,' which pays additional allowances if overtime exceeds the pre-agreed hours. Last month, Kakao Bank's labor and management agreed to abolish the comprehensive wage system and are currently coordinating the actual implementation timing. Kakao Mobility has also been discussing the abolition of the comprehensive wage system since the end of last year.

In particular, calls for abolishing the comprehensive wage system are strong in the gaming industry. Frequent developer departures due to dissatisfaction with the 'crunch mode' (intense work system before game release) and the industry's developer shortage have led to a rapid move to abolish the comprehensive wage system. Starting with Pearl Abyss in 2017, the '3N' (Nexon, Netmarble, NCSoft) have abolished it, and Com2uS abolished the comprehensive wage system last May.

Currently, only some game companies such as Krafton and Neowiz maintain the comprehensive wage system, and they are reportedly not planning to abolish it for the time being. The industry cites increased labor costs as the reason why some companies still maintain the comprehensive wage system despite high employee dissatisfaction.

For general office workers, allowances for overtime, night, and holiday work are calculated, so dissatisfaction with the comprehensive wage system is not significant. However, in the case of developers, working hours often exceed the legal limit. Therefore, in IT companies where developers make up a significant portion of employees, abolishing the comprehensive wage system has led to a substantial increase in overall labor costs. In fact, when Kakao abolished the comprehensive wage system in May 2019, the average monthly wage per person increased by more than 600,000 KRW.

An IT industry official explained, "Companies maintaining the comprehensive wage system try to reduce employee dissatisfaction by significantly increasing annual salaries, but ultimately, the IT industry will move toward abolishing the comprehensive wage system," adding, "Some presidential candidates have pledged policies regarding the comprehensive wage system, and workers' complaints about wanting to be paid for the work they do continue."

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