Competition intensifies between Kakao, Toss in attracting talent

Lee Seung-gun, CEO of Toss' operator Viva Republica, speaks at a press conference at the company's headquarters in southern Seoul, March 28, 2019. / Yonhap

By Kim Bo-eun

Competition is intensifying between Korea's top fintech firms to attract talented personnel, as they expand their businesses.

Kakao Bank, established in July 2017, has been solidifying its position as its profit grows. The internet bank posted 45.3 billion won in net profit in the first half of the year, a 372 percent surge from earnings from the same period of 2019.

Toss, which started as a mobile money transfer app in 2015, has also shown remarkable growth.

Toss is now a financial services platform offering more than 40 services. It is also in the process of setting up multiple affiliates in online payment, insurance sales, brokerage and online banking services.

Toss recorded its first surplus in the second quarter of this year, posting an operating profit of 1.7 billion won. Yet, despite Toss' growth, there is still a sizeable gap with Kakao Bank.

Kakao Bank CEO Yun Ho-young speaks as the former head of the task-force launching the internet lender, at a business briefing in the Korea Federation of Banks building in central Seoul, Nov. 30, 2015. / Yonhap

Kakao Bank is a major rival for Toss, which is set to launch its own internet bank next year. It is in the process of setting up its infrastructure and building a credit rating model.

The vast expansion is requiring large scale recruitment, and Toss has been offering generous incentives to attract talent.

Toss has been attracting employees by offering to pay 1.5 times the annual salary of applicants at their previous job. Those joining Toss are also able to receive a "signing bonus" that amounts to the person's annual salary at their previous company, or choose to receive stock options worth 100 million won a year later.

Toss says its employees are the best paid among local fintech firms. The company also provides achievement-based bonuses and allowances for lunch as well as for working out.

On the part of the company, this amounts to huge expenses, but Toss has determined that it will spend what it takes to secure the best personnel as this equates to the competitiveness of the company.

"It is difficult to attract the best developers even with such benefits," a Toss official said, given the demand for them.

Since Toss is in the stage of setting up its business, employees are required to work long hours.

Still, there is a high level of interest in positions that open at the company.

In Toss' latest round of recruitment for 20 developers with fewer than three years' experience, over 2,700 people applied.

While Kakao Bank has an advantage as a leading company, it may not remain unaffected by tactics taken by peer firms.

Kakao Bank also continues to hire developers and staff for supporting divisions as the lender expands its business.

Kakao Bank provides a month of paid leave for employees that have been with the company for three years. Employees also receive 2 million won in allowances to spend on their vacation.

“We have our own systems and incentives,” a Kakao Bank official said.

Kakao Bank has also offered stock options to employees, as long as they remain with the company.

Developers have a high turnover rate as they move to companies providing higher salaries and more benefits, but the Kakao Bank official said its turnover rate is relatively low.

“Developers consider pay, but also whether they can work comfortably in a favorable environment and learn from other more experienced developers,” he said.