Hiring plans shrink amid slowdown, labor reforms

(Han Joo-hyung)

South Korean companies are sharply scaling back hiring plans as the economic slowdown drags on, with additional pressure from labor policy changes likely to deepen the early-year employment chill.

According to the Ministry of Employment and Labor on Sunday, planned hiring at businesses with at least one employee totaled 467,000 from the fourth quarter of last year through the first quarter of this year, down 64,000, or 12.1 percent, from 531,000 a year earlier, based on the 2025 second-half Establishment Labor Force Survey by Occupation.

The slowdown has been evident since the second half of last year. In the third quarter, job openings fell to 90,000, down 7.0 percent year on year, while actual hires declined 5.8 percent to 68,000. With openings shrinking faster than hires, unfilled positions dropped 17.7 percent to 22,000, and the unfilled rate slipped 1.1 percentage points to 8.4 percent.

The figures suggest companies are not struggling to find workers but rather have reduced the need for additional staff. “As labor shortages themselves have eased, overall hiring plans remain weak,” said Kim Jae-hoon, head of the Labor Market Survey Division at the ministry.

Firms continue to prioritize retaining existing workers and cutting costs amid high interest rates and a global slowdown. Looking ahead, concerns are mounting that labor policy changes could further weigh on hiring decisions.

A survey by the Korea Chamber of Commerce and Industry of 500 HR managers found 97.4 percent said labor-related policy changes are affecting hiring. The most cited burdens were a 4.5-day workweek (29.3 percent), retirement age extensions (26.7 percent) and the so-called Yellow Envelope Act (25.8 percent), reflecting fears of rising labor costs and legal risks.

With economic weakness persisting and policy headwinds intensifying, the job market is expected to remain subdued for some time.