Korean heavy industries struggle with staff shortage amid improved earnings

HD Hyundai Heavy Industries Co.’ shipyard in Ulsan, South Gyeongsang Province. [Courtesy of HD Hyundai Heavy Industries]

South Korean shipbuilders and steel manufacturers are struggling to find workers amid earnings improvement following a prolonged sluggish industry.

According to second-quarter business reports filed by each industry player on Tuesday, the number of employees at major manufacturers including POSCO, HD Hyundai Heavy Industries Co., Samsung Heavy Industries Co., Hyundai Motor Co., and Doosan Enerbility Co. declined this year.

The number of employees at POSCO, for example, fell to 16,589 at the end of June from 17,107 at the end of December last year while those at HD Hyundai Heavy Industries to 12,090 from 12,287 and Samsung Heavy Industries to 8,501 from 8,556.

Industry observers note that the decline in workforce at the manufacturers is odd given that their earnings are seeing gradual improvement amid an industry turnaround.

POSCO’s sales jumped 36 percent on year in the first half of this year to 21.6 trillion won ($16.1 billion).

Experts note that job seekers remain hesitant to embrace employment opportunities within regions where the manufacturer operates production facilities, such as Pohang and Gwangyang, posing a significant challenge in securing an adequate workforce.

The shipbuilding sector, which establishes its production bases in coastal areas like Ulsan and Geoje, is similarly grappling with a lack of staff.

Samsung Heavy Industries managed to swing to a profit for the first time in 22 quarters in the first quarter of this year and HD Hyundai Heavy Industries raised a profit in the second quarter of this year.

HD Hyundai Heavy Industries garnered orders worth $7.6 billion so far this year.

Finding suitable candidates remains a formidable task. Samsung Heavy Industries has seen over 300 employees leave within a year, as compared to the end of the first half of the previous year.

Hanwha Ocean Co., former Daewoo Shipbuilding & Marine Engineering Co., has intensified its talent acquisition endeavors under the so-called “unlimited recruitment” campaign under Hanwha Group Vice Chairman Kim Dong-kwan.

Despite the companywide effort, however, its employee count by the end of June stood at 8,245, down 55 compared to the end of the previous year.

Hyundai Motor, enjoying a record-profit period this year, has seen its workforce dwindle by more than 1,800 over the last six months. Doosan Enerbility reported a workforce reduction from 4,510 to 4,449.

In response, the manufacturers have strategically established design and R&D centers within the Seoul metropolitan region, aiming to attract and retain accomplished engineers.

Hyundai Motor set up a center in Pangyo and other areas in Gyeonggi Province, known for favorable working conditions, to attract top-tier talent.

HD Hyundai, the parent company of HD Hyundai Heavy Industries, also recently built a new headquarters in Pangyo, bringing together previously dispersed R&D personnel from Seoul, Ulsan, and Jeolla Province.

In January, Hyundai Steel Co. embarked on a significant shift, relocating its offices to Pangyo. The move marked the first instance of a Korean steel company establishing its presence in Pangyo.

Doosan Group entered the scene by erecting a towering 27-story office tower in Bundang, Gyeonggi Province, in 2020. The tower now accommodates key entities such as Doosan Enerbility and Doosan Bobcat Inc.