Korea needs family-friendly corporate culture
Commissioner, Invest Korea
I recently visited the U.S. Department of Commerce, home to Select USA, America’s investment promotion agency. At about 5 p.m., I noticed two women pushing tandem strollers of about ten babies through the building. They were from the U.S. Department of Commerce’s daycare center, and the babies were being brought back to their parents.
So this is how it works. I was enthralled.
Statistics Korea recently reported that the birth rate among women of peak childbearing age rose slightly, from 1.149 to 1.226 children per woman in 2010.
The rise was attributed to three factors: more women than men in the age group getting married and capable of giving birth, as these women are the children of baby boomers born between 1955 and 1963; stronger economic growth last year than in the previous year; and government’s birth incentives, including financial support for education and lunch fees.
Still, Korea’s fertility rate is below the average of 2.1 children per woman needed to maintain current population levels. According to Statistics Korea, the upward trend is likely to continue briefly before the birth rate falls again.
As the low birth rate and an aging population can reduce our potential growth, rattle our social safety net and result in huge sovereign debt, as was the case in southern European countries, we must be aware of the negative effects of low birth rate on society and the reasons behind the decline in births to find a solution.
In the future, low birth rates could mean fewer young adults caring for elderly family members, increased public spending on pensions and healthcare, an older and less-adaptable workforce and, possibly, shrunken domestic savings.
Factors contributing to low birth rates are many, including the higher educational attainment of women, their growing aspirations to be economically active and their ranking of parenthood as a less-important life goal than it previously was.
Many academics add that the burdens women face in the workplace are a crucial factor, given that more women are working.
Surveys show that incompatibility between professional and family roles and a lack of childcare support, in addition to financial constraints, are the top concerns limiting larger families.
What parents, and married working women in particular, need are measures to help them cope with work and family, easier access to more affordable childcare and financial incentives.
In other words, employers need to step in and support better work-life practices. They should also be aware that the indirect costs of child rearing fall mainly on women, while direct costs are shared by both parents. Indirect costs refer to the loss of income after a birth due to foregone earnings when parents stop working, work less or experience a decline in their career prospects.
Yuhan-Kimberly has showed how well it can work when companies get involved. The fertility rate of its employees in 2010 was 1.84, outpacing Korea’s 1.22.
Since 2006, the company has executed a corporate policy of family-friendly business including seminars for pregnant workers, a baby-nurturing culture, an in-house childcare center and flexible work hours. In 2010, the company’s maternity leave rate was 69 percent.
Yuhan-Kimberly solved the work/family incompatibility problem by developing a family-friendly corporate culture.
Of course, companies can only do so much with respect to practices and policies. The government must establish a framework in which companies can better support employees.
The government should, for example, give tax benefits compensating for costs incurred to companies with measures to alleviate the pressures and insecurities female employees face in deciding whether to have children.
A family-friendly corporate culture is the key to high birth rates. In other words, people need to stop having to choose between work and child rearing. A balance must be struck between the two, and for this to happen, society must change its mentality about work and family.