"Welfare Expenses Also Painful: Welfare Gap Between SMEs and Large Corporations Tripled in 10 Years"

Last Year, Monthly Welfare Cost per Worker: 401,000 KRW vs 137,000 KRW

"119,400 KRW per month (companies with 10-29 employees) vs 489,300 KRW (companies with over 1,000 employees)"

The gap in welfare benefits such as meal expenses, transportation costs, and child tuition support between large corporations and small and medium-sized enterprises (SMEs) has been widening over time.

According to the Ministry of Employment and Labor on the 25th, the 2022 fiscal year survey on corporate labor costs revealed that the "non-statutory welfare costs" spent per employee by companies with 10 or more regular workers amounted to 249,600 KRW per month.

(This photo is not directly related to the article.) [Photo by Pixabay]

Non-statutory welfare costs include expenses that companies spend under categories such as employees' meal expenses, transportation and communication costs, health and medical expenses, child tuition support, in-house employee welfare, housing costs, insurance premiums, and leisure, cultural, and sports activities.

These welfare costs, along with retirement benefits, statutory labor costs (company's share of the four major social insurance premiums), and education and training expenses, are considered indirect labor costs. When combined with direct labor costs such as wages, bonuses, and performance incentives, they constitute the total labor cost incurred by a company to employ one worker.

Non-statutory welfare costs vary significantly depending on the size of the company. As of the end of last year, companies with 300 or more employees spent 400,900 KRW per employee per month on non-statutory welfare costs.

In contrast, companies with fewer than 300 employees spent only 136,900 KRW, which is just 34.1% of the amount spent by companies with 300 or more employees.

Breaking down company sizes further, the monthly non-statutory welfare costs per employee were as follows: 119,400 KRW for companies with 10-29 employees, 137,600 KRW for 30-99 employees, 158,700 KRW for 100-299 employees, 228,900 KRW for 300-499 employees, 206,300 KRW for 500-999 employees, and 489,300 KRW for companies with 1,000 or more employees.

The items with particularly large gaps were child tuition support and health and medical expenses. Child tuition support costs for companies with fewer than 300 employees were 4,900 KRW per month, only 13.5% of the 36,200 KRW spent by companies with 300 or more employees. Health support costs were also at about 14.7% of the larger companies' spending.

The welfare gap between large corporations and SMEs is widening further. In the 2012 fiscal year, companies with fewer than 300 employees spent 163,000 KRW per employee per month on welfare costs, which was 65.1% of the 250,500 KRW spent by companies with 300 or more employees.

On June 22, office workers are serving themselves lunch at a cafeteria located in the basement of an office building in downtown Seoul.
[Photo by Yonhap News]

At that time, the gap between the two groups was 87,500 KRW per month, but by the end of last year, it had tripled to 264,000 KRW.

The welfare cost gap between companies with 300 or more employees and those with fewer than 300 employees continued to widen over the years: 134,000 KRW in 2013, 152,000 KRW in 2015, 177,000 KRW in 2017, 186,000 KRW in 2019, and 209,000 KRW in 2021.

While the non-statutory welfare costs per employee in companies with 300 or more employees increased by 60% over the past decade since 2012, the welfare costs for companies with fewer than 300 employees actually decreased by 16%, from 163,000 KRW to 137,000 KRW.

Unlike welfare costs, the gap in direct labor costs such as wages has slightly improved, highlighting the need for improvements in welfare costs.

In the 2012 fiscal year, the direct labor costs per employee in companies with fewer than 300 employees were 2,847,000 KRW per month, which was 66.7% of the 4,266,000 KRW spent by companies with 300 or more employees.

Last year, companies with fewer than 300 employees spent 3,975,000 KRW, and those with 300 or more employees spent 5,823,000 KRW, raising the ratio to 68.3%.

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