SEOUL, July 4 (Korea Bizwire) – More than half of the young jobseekers in Korea are preparing for some kind of examination, particularly the civil service examinations.
Most ‘lucky’ new hires who have started careers at large companies as permanent employees tend to stay in their jobs, whereas half of the new employees hired on temporary or contract-based positions leave their job within two years. The instability of the job market for the younger generation has to become a concern for government policymakers.
According to the Korea Employment Information Service’s (KEIS) report entitled “Status and Traits of Young Jobseekers” released on July 3, the number of young jobseekers (age 15-29) decreased from 455,000 in 2008 to 442,000 in 2010 and 410,000 in 2011, and then remained steady until 2014 when it rose sharply again to 452,000, similar to the figure in 2008 when the global financial crisis hit.
The number of young people seeking employment decreases or increases depending on the economic situation, consequently the economic downturn in Korea caused a sharp surge in young jobseekers last year.
Of particular importance is the big increase in the number of individuals preparing for different examinations.
According to the KEIS report, 47.9 percent of respondents aged between 20 and 24 said they are or had experience preparing for examinations. For individuals aged between 25 and 29, the percentage went up to 53.9.
The report noted that 45.5 percent of respondents were preparing for the Grade 9 civil service examination, followed by the public school teaching certification examination (14.8%), a professional license examination such as the CPA (12.0%), the Grade 7 civil service examination (11.8%), and other civil service related examinations (4.6%).
Civil service positions are most desired by jobseekers due to their perceived stability.
Another reported entitled “New Grads’ First Employment and Resigning Status Analysis” from the KEIS clearly shows the reality of the current job market.
In 2014, 72.1 percent of 18,000 new grads (age 20 to 34) were able to find employment, according to the report.
However, only 10.4 percent were hired as permanent employees at large firms with more than 300 full-time workers, while 34.3 percent were hired as permanent employees at small businesses; 21.2 percent as non-permanent employees at small businesses; and 6.1 percent as non-permanent employees at large firms.
The average monthly pay at a new grad’s first job went up from 1.7 million won ($1,480) in 2010 to 1.84 million won ($1,602) in 2012, and 1.88 million won ($1,637) in 2014.
With the monthly salary of a permanent employee at a large company set as the base with 100 percent, a non-permanent employee at a large company receives 77.1 percent of the baseline pay; a permanent employee at a small business receives 76.0 percent; and a non-permanent employee at a small business receives only 68.7 percent. The difference in salary among different types of employment is significant.
The differences in retention rates are also very noticeable.
Only 12.3 percent of new hires at large companies resigned, whereas 27.9 percent of permanent employees at small businesses and 29.3 percent of non-permanent employees at large companies resigned. Non-permanent employees at small businesses had the highest resignation rate at 40.8 percent. They all left work within two years of the start of their employment.
The reasons why permanent and non-permanent employees chose to leave their jobs were also different.
While permanent employees resigned in order to find better-paying jobs or jobs where they would be treated better, most non-permanent employees said they left work because their contract period ended.
Most contract-based positions are two-year, non-permanent positions. As such, jobseekers hired for these positions have no choice but to look for another job if they don’t get converted to a permanent position after two years.
“The involuntary resignation of new graduates adds an additional expense to the hiring process, and it also contributes to the high unemployment rate. Labor policy needs to be revised to make sure these young workers can obtain stable positions,” said Kim Ha-young, a researcher at KEIS.
By Nonnie Kim (email@example.com)