Bank workers choosing voluntary retirement while getting is good

Banks are reaping record profits, but ironically, more and more workers are feeling encouraged to leave. Workers are happy to move on to the next chapter of their lives with wallets full of cash from voluntary retirement packages.

Booths for ATMs of major commercial banks in Seoul [NEWS1]

Banks are reaping record profits, but ironically, more and more workers are feeling encouraged to leave.

Workers are happy to move on to the next chapter of their lives with wallets full of cash from voluntary retirement packages.

And amid robust growth, banks are offering good deals to workers who wish to leave, especially as they seek to cut personnel costs with operations moving online.

Shinhan Financial Group's labor union recently came to an agreement on terms for voluntary retirement and accepted applicants until early next week.

Workers with more than 15 years at the company and born before the year 1983 applied, which means 39-year-olds could also apply. It's the youngest age group from whom Shinhan Bank has accepted early retirement.

In January, the bank’s age bar for voluntary retirement was set to those born before 1978.

Once selected, voluntary retirees will receive nine to 36 months of their monthly salary in advance as their severance pay, based on their age and duration of employment. They will be dismissed on Aug. 31.

Hana Financial Group wrapped up its voluntary retirement period for the second half of this year in July.

They received applicants aged 40 and above who have worked for more than 15 years from June 16. Sixty candidates left the bank on July 31.

Workers born between 1968 and 1971 received 28 months of salary in advance, and those born after 1972 received 24 months of salary as their severance pay.

Those born between 1968 and 1971 received additional sums for their children’s tuition fees and medical expenses, as well as money to prepare themselves for a new job.

Banks are receiving applications for voluntary retirement twice a year for a number of reasons. For their part, banks need fewer workers at brick-and-mortar branches as they transition to online operations.

However, workers are also demanding it.

Younger workers eager to “move on” to the next stage of their life are asking their labor unions to widen the age pool for voluntary retirement.

And with banks currently flourishing, workers want to get while the getting is good.

At the five major commercial banks — KB Kookmin, Shinhan, Hana, Woori and NH Nonghyup — average severance pay a person receives was 540 million won ($403,495) in 2022, according to data from Financial Services Commission. The figure is up by 30 million won compared to 2021.

More demand for early retirement and good severance pay encouraged 2,222 workers to leave their jobs from the five banks in the two-month period from December to January. A few thousand employees will likely leave from Shinhan and Hana banks, who have yet to start receiving applications for voluntary retirement for the latter half of this year.

BY CHOI SEO-IN [lee.jaelim@joongang.co.kr]