What Are the Issues in the Korean Labor Market Identified by Foreign Companies?
Foreign-invested companies identified enhancing employment flexibility and establishing the rule of law in labor-management relations as key priorities in South Korea's labor reform efforts.
On the 15th, the Korea Employers Federation announced the results of the 2023 Foreign-invested Companies Labor Market Evaluation and Labor Reform Perception Survey. The survey was conducted on 200 foreign-invested companies with 100 or more employees.
Major foreign-invested companies selected enhancing employment flexibility (23.5%) as the top priority labor reform task. This was followed by establishing the rule of law in labor-management relations (21.5%), reforming the wage system to focus on job performance (15.5%), and flexibilizing working hours (14%).
Among foreign-invested companies with labor unions, establishing the rule of law in labor-management relations (35.8%) had the highest response rate. Next, union-related issues such as allowing replacement labor during disputes (12.3%) were identified as priority tasks.
Regarding risk factors in South Korea's labor market and labor-management relations, "lack of employment flexibility (34%)" was the most frequently cited. Other factors included rigid working hour systems (23%), rising labor costs (23%), and confrontational and militant labor movements (11.5%).
Nearly 40% of foreign-invested companies evaluated South Korea's labor market as "rigid (36.5%)" compared to the countries where their headquarters are located. In contrast, only 13.5% responded that it is not rigid.
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Hwang Yong-yeon, head of the Labor Policy Division at the Korea Employers Federation, emphasized, "Foreign-invested companies are important economic partners contributing to South Korea's economic development through investment and job creation," adding, "It is crucial to resolve risk factors in South Korea's labor market and labor-management relations to activate foreign investment."
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