Korean firms to reduce H2 hiring by 35% amid economic slowdown: surveys

The employees are looking at battery cells at LG Chem’s Ochang electric vehicle battery plant production line. [Courtesy of LG Chem]

South Korea’s job market is poised to maintain its challenging nature through the latter half of this year. As the economy grapples with deceleration and the possibility of an economic crisis looms large in China, companies are displaying a shrinking enthusiasm for hiring, surveys showed on Wednesday.

According to a survey conducted by job platform JobKorea, companies intending to hire in the latter half of the year plan for an average recruitment scale of 12.7 individuals, down 35 percent from 19.3 people in the first half of this year. The survey was conducted among 187 corporate human resource managers.

Another survey by internet recruitment service company Incruit showed a similar outlook, with small and medium-sized enterprises being more sensitive to the economic slowdown and cutting back on hiring.

According to Incruit’s survey of 727 local companies, 54.4 percent of medium-sized companies and 58 percent of small companies had hiring plans for the latter half of the year, but this is down 9.6 percentage points and 9.1 percentage points, respectively, from the same period last year. Large companies with hiring plans fell by 1.6 percentage points to 78.8 percent.

The petrochemical industry, which has seen significant deterioration in performance, is one of the most prominent sectors to cut back on hiring.

LG Chem Ltd., which plans to hold an online job fair via YouTube on August 31, is expected to significantly reduce its recruitment size compared to last year. In September last year, LG Chem hired a large number of new employees in 52 different fields. This year, however, the company is expected to reduce hiring as the growth in the battery sector slowed in the third quarter and the market outlook for petrochemicals, its main industry, deteriorated significantly.

“There are many companies that are not performing well, so the scale of hiring is expected to drop significantly,” said a petrochemical industry insider. Lotte Chemical Corp., SK geo centric Co., and Kolon Industries Inc. have not yet confirmed their hiring plans. Of the large companies that have finalized their hiring plans, 70 percent plan to hire in single digits, while 30 percent plan to hire in double digits, according to Incruit.

According to the Bank of Korea, the business survey index (BSI) in August stood at 73, down two points from July. A BSI below 100 indicates a deteriorating economy. The BSI for the manufacturing sector, which employs a large number of people, was even lower at 69, indicating a worse condition than the overall industry.

The prospects for internship recruitment, where job seekers can relatively easily gain work experience, are also expected to decline. According to Incruit, 15.3 percent of large companies said during a survey in the second half of last year that they had plans to hire interns, but in this survey, only 4.9 percent responded the same way.