"Foreign Worker Employment Permit System Should Be Expanded to All Medium-Sized Manufacturing Companies"

69.0% of Root Mid-sized Companies Complain of Labor Shortage

It has been revealed that the manpower shortage in mid-sized companies in the foundational manufacturing sectors is at a critical level. Among these mid-sized root industry companies, 56.7% stated that they would hire foreign workers if the Foreign Worker Employment Permit System standards were relaxed.

According to the "Mid-sized Companies Foreign Worker Employment Permit System Demand Survey" released by the Korea Federation of Mid-sized Enterprises on the 5th, 69.0% of root mid-sized companies with more than 300 employees reported that hiring is so difficult that operating factories is challenging. This survey was conducted from July 3 to July 25, targeting 87 root mid-sized companies with more than 300 regular employees.

On the 11th, a notice regarding the employment of foreign workers was posted at the Western Branch of the Ministry of Employment and Labor in Mapo-gu, Seoul. Photo by Jo Yongjun

As of the survey date, the average new manpower demand per root mid-sized company was 41.3 employees, but the actual number of hires was only 8.5, resulting in a manpower shortage rate of 79.1%. Although lower than in provincial areas (81.2%), the manpower shortage rate in mid-sized companies located in the Seoul metropolitan area was also very high at 66.3%. By job category, the manpower shortage rates were surveyed in the order of ‘production workers (79.9%)’, ‘office workers (79.4%)’, ‘production support workers (66.7%)’, and ‘simple labor (66.7%)’. Respondents answered that foreign workers are needed in all job categories except for ‘office workers’, which require relatively smooth communication, including ‘production workers (82.4%)’, ‘simple labor workers (17.6%)’, and ‘production support workers (14.7%)’.

The manpower shortage in root mid-sized companies was identified as a key factor causing sales decline and market contraction, including ‘worker attrition due to increased work intensity (85.7%)’, ‘delivery delays (14.3%)’, and ‘production equipment shutdowns (14.3%)’. The causes of the manpower shortage were cited as ‘location in provincial areas (38.3%)’, ‘lower wages compared to large companies (35.0%)’, ‘job turnover (21.7%)’, ‘aversion to root industries (20.0%)’, and ‘poor surrounding infrastructure (11.7%)’.

Root mid-sized companies are implementing self-help measures to alleviate the manpower shortage, such as ‘commuting transportation cost support (36.2%)’, ‘housing subsidies and dormitory provision (25.0%)’, ‘vacation pay (13.3%)’, ‘night shift allowances (6.7%)’, and ‘in-house convenience facilities (5.0%)’, but the Korea Federation of Mid-sized Enterprises stated that these efforts alone are insufficient to resolve the severe manpower shortage at once.

Lee Ho-jun, the full-time vice chairman of the Korea Federation of Mid-sized Enterprises, said, “The recent expansion of the Foreign Worker Employment Permit System to include root mid-sized companies with more than 300 employees located outside the Seoul metropolitan area, as decided at last month’s ‘4th Regulatory Innovation Strategy Meeting,’ is very desirable, but it is true that it is insufficient to meet the demand on the ground.” He emphasized, “Considering the manpower shortage across the manufacturing sector regardless of location or company size, it is necessary to proactively expand foreign worker employment to all mid-sized manufacturing companies beyond rigid criteria such as location and company size, and to prevent the decline of mid-sized companies’ global competitiveness through comprehensive manpower policies that strengthen regional infrastructure such as transportation, housing, and culture.”

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