As Gold Prices Surge, Companies Rethink Costly Traditions (Yonhap)
SEOUL, Jan. 29 (Korea Bizwire) — A surge in global gold prices is prompting South Korean pharmaceutical companies to rethink a long-standing workplace tradition: rewarding long-serving employees with gold.
As bullion prices climb to record highs, several drugmakers have begun replacing gold gifts with cash bonuses, citing sharply rising costs. Industry officials said the shift reflects mounting financial pressure as gold prices have more than doubled in recent years.
GC Green Cross, one of the country’s major pharmaceutical firms, previously awarded employees gold bars tied to years of service — ranging from 10 don for a decade of work to 40 don for 40 years. Beginning this year, the company has replaced those awards with cash bonuses, paying 5 million won for 10 years of service and up to 20 million won for 40 years.
Seegene, a molecular diagnostics company, has adopted a similar approach. The firm had traditionally given employees gold equivalent to one don per year of service at five-year intervals, along with additional leave. Starting this year, it has switched to a cash-based system, granting 500,000 won per year of service instead.
The changes come as gold prices have soared both globally and domestically. According to Bloomberg, spot gold prices surpassed $5,000 an ounce for the first time on Jan. 26, briefly reaching an intraday high of $5,110.50. The price has risen roughly two-and-a-half times from about $2,000 an ounce in early 2024.
For Korean companies, the burden has been compounded by a weaker won. When converted into local currency, the cost of an ounce of gold has nearly tripled over the same period, sharply inflating the expense of gold-based employee rewards.
“Compared with two years ago, the cost of giving gold as a long-service award has nearly tripled,” said one pharmaceutical industry official. “Even companies that still maintain gold rewards are now considering switching to cash or reducing the weight.”
Once viewed as a symbol of loyalty and prestige, gold is increasingly being treated as a volatile commodity — reshaping how companies recognize employee tenure in an era of surging prices and tighter cost controls.
Ashley Song (ashley@koreabizwire.com)
