SME Sector Discusses Improvement Measures for Working Hour Systems

Jointly Hosting the "SME Workforce Forum" with Academia

The Korea Association for Small and Medium Business Policy and the Korea Federation of SMEs announced on the 18th that they held the SME Workforce Forum under the theme of "Improvement Measures for the Working Hours System to Strengthen the Competitiveness of SMEs."

Jeon Jonggeun, President of the Korea Association for Small and Medium Business Policy, stated, "The issue of reducing working hours is a challenging task that must achieve both the goal of improving workers' health and quality of life, and the goal of maintaining corporate competitiveness and productivity." He added, "It is necessary to establish working hours policies that take into account the circumstances of SMEs experiencing labor shortages."

Oh Giwoong, Executive Vice President of the Korea Federation of SMEs, said, "Our labor market is currently undergoing unprecedented upheaval due to low birth rates, an aging population, the spread of artificial intelligence (AI) technology, and various institutional changes." He continued, "For SMEs, which are responsible for 80% of employment, to successfully adapt to the changing labor market, it is essential to improve the working hours system to continuously secure global competitiveness and growth momentum for startups."

No Minseon, Director at the Korea Small Business Institute, who delivered the keynote presentation, shared analysis results showing that over the past 10 years, the proportion of SME employees working 36 hours or less per week has increased significantly, and the total working hours have decreased sharply compared to major countries. According to Director No's analysis, the proportion of regular SME employees working 36 hours or less per week increased by 17.6 percentage points, from 9.3% in 2014 to 26.9% in 2024. The proportion of regular SME employees working 53 hours or more per week decreased by 13.0 percentage points, from 18.8% in 2014 to 5.8% in 2024. It was also reported that the average annual working hours in Korea dropped by 210 hours, from 2,075 hours in 2014 to 1,865 hours in 2024, marking the largest decrease among OECD countries.

Director No emphasized, "The working hours system needs to be improved in a way that respects the diverse choices of both labor and management in SMEs, based on the principles of work-life balance and securing the right to health." He proposed as key initiatives the introduction of a Korean-style white-collar exemption that excludes key workers in innovation-driven venture startups from working hours regulations, as well as expanding tax incentives to promote performance-based rewards in SMEs, including performance-based stock options and compensation for job-related inventions.

In the subsequent discussion, chaired by Lim Chaeun, Professor Emeritus at Sogang University, participants including Kwon Sunjae, Director at the Ministry of SMEs and Startups; Lee Myungro, Head of Human Resources Policy at the Korea Federation of SMEs; Choi Jangho, Professor at Sogang University; Lee Jonggwan, Professor at Yonsei University; and Eom Sangmin, Professor at Kyung Hee University, shared a variety of opinions on ways to improve the working hours system for SMEs.

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