Krafton hq tower (Image courtesy of Krafton)
SEOUL, Feb. 19 (Korea Bizwire) — South Korean companies are taking bold steps to combat the nation’s record-low birthrate by offering substantial financial incentives to employees who have children.
Gaming company Krafton recently announced a groundbreaking birth incentive program, offering employees KRW 60 million ($41,400) upon the birth of a child. Additionally, the company will provide KRW 5 million ($3,450) annually for eight years, totaling KRW 100 million ($69,000) per child.
This initiative, among the most generous in South Korea’s corporate sector, is reportedly spearheaded by Krafton’s founder, Jang Byung-gyu, former chairman of the Fourth Industrial Revolution Committee.
Krafton recorded its highest-ever revenue and profits in 2024, with sales reaching KRW 2.71 trillion ($1.87 billion) and operating profits of KRW 1.18 trillion ($810 million). Leveraging its financial strength, the company is positioning itself as a leader in fostering a family-friendly work environment.
Other companies are also increasing birth incentives. In early 2024, Booyoung Group made headlines by awarding KRW 1 billion ($690,000) in birth incentives to 70 employees, distributing a total of KRW 70 billion ($48.3 million) to support childbearing.
Booyoung Group plans to continue providing 100 million won per child as a childbirth incentive. (Image courtesy of Yonhap)
More firms are following suit. Samchully now offers KRW 10 million ($6,900) for each newborn child, while Korea Aerospace Industries (KAI) provides KRW 10 million for the first and second child and KRW 30 million ($20,700) for the third. Cosmetics firms Cosmax and Kolmar Holdings also implemented similar programs last year.
This trend is expected to grow following a 2024 amendment to the Income Tax Act, which exempts corporate birth incentives from taxation, encouraging more companies to introduce or expand such benefits.
The urgency of these measures is underscored by alarming demographic trends. According to Statistics Korea, the nation’s total births in 2023 dropped by 19,200 (7.7%) year-over-year to a record-low 230,000.
The total fertility rate—the average number of children a woman is expected to have in her lifetime—fell to 0.72, marking the eighth consecutive year of decline. As of 2021, South Korea remained the only country among the 38 OECD member nations with a fertility rate below 1.0.
As the government and private sector ramp up efforts to address the demographic crisis, corporate birth incentives are emerging as a key strategy to reverse the downward trend.
Lina Jang (linajang@koreabizwire.com)
