64% of Top 500 Companies Have No or Undecided Hiring Plans for the Second Half of the Year

Entering Tightened Management to Address Profitability Decline

Six out of ten large companies have no plans or are undecided about new hiring in the second half of the year. This is due to a contraction in corporate sentiment amid the global economic downturn and concerns over an economic crisis originating from China.

On the 11th, the Federation of Korean Industries (FKI) announced these findings after commissioning the polling firm Research & Research to survey the top 500 companies by sales on their '2023 Second Half University Graduate New Hiring Plans.'

In this survey, more than six out of ten respondent companies (64.6%) said they either have no plans for new hiring in the second half of this year (48.0%) or will not hire at all (16.6%). The proportion of companies that made new hiring plans was 35.4%, with a majority (57.8%) intending to maintain hiring levels similar to last year. Responses indicating plans to reduce (24.4%) or increase (17.8%) hiring compared to last year followed.

[Image provided by Jeonggyeongryeon]

Companies cited the following reasons for not hiring new employees or not increasing hiring scale: ▲Entering austerity management to respond to deteriorating profitability and management uncertainties (25.3%) ▲Economic downturn caused by prolonged global recession, high interest rates, and high exchange rates (19.0%) ▲Cost reduction measures in response to rising raw material prices and increased labor costs (15.2%).

Conversely, companies that responded they would increase new hiring cited ▲Securing future talent regardless of economic conditions (33.4%) ▲Increased demand for personnel in new industries or new job categories (22.2%) ▲Good or improving economic outlook in the industry to which the company belongs (22.2%) as reasons.

The biggest difficulty related to new hiring was finding suitable talent (30.9%). In fact, as of the first half of the year, the number of unfilled positions in workplaces with more than 300 employees that actively recruited but failed to hire was 12,000, double the 6,000 in the first half of 2020.

Companies anticipated that competition for university graduate employment would be fiercer than last year. The expected average competition ratio for new university graduate hires this year was 81 to 1. Last year’s average competition ratio among respondent companies was 77 to 1.

[Image provided by Jeongyeongryeon]

Last year, 21.9% of new university graduate hires were 'experienced fresh graduates' who applied as new hires despite having work experience. Their average experience period was 1.4 years. The FKI explained, "As companies prefer practical talent who can quickly respond to the business environment, there is a trend to favor candidates with job experience even in new hire recruitment."

Companies identified the following policy tasks to expand new university graduate hiring: ▲Inducing corporate investment and employment expansion through deregulation (39.4%) ▲Expanding incentives for companies that increase employment (25.2%) ▲Supporting companies in growth-driving sectors of new industries (15.7%) ▲Resolving mismatches through strengthened career guidance and provision of employment information (8.7%).

Choo Kwang-ho, head of the Economic and Industrial Headquarters at FKI, said, "Recently, companies are planning hiring conservatively due to worsening business performance caused by the economic downturn, instability in the Chinese economy, and management uncertainties such as high interest rates and high exchange rates," adding, "the government and the National Assembly need to expand employment capacity through institutional support to revitalize companies."

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