Jun Ji-hye, a reporter at the finance desk of The Korea Times, focuses primarily on economic policy and government agencies, mainly covering the Ministry of Finance and Economy, the Ministry of Budget and Planning, the National Tax Service and the Korea Customs Service. She previously covered financial authorities, including the Financial Services Commission and the Financial Supervisory Service, and earlier worked on the political, city and business desks, reporting on a wide range of issues.
Banks bolster efforts to address low birthrates
Children play at an after-school hub in Goyang, Gyeonggi Province, in this undated photo. The facility is the first off-campus after-school program in the province, launched to address the demand for after-school classes from seven nearby elementary schools. KB Financial Group supported its establishment in cooperation with the Ministry of Education to help address the country's low birthrates. Courtesy of KB Financial Group
By Jun Ji-hye
Lenders see issue as crucial for ensuring sustainable business
Banks are actively participating in nationwide efforts to address low birthrates by expanding maternity and child care-related benefits for their employees, industry officials said Friday.
Their policies have so far primarily focused on childbirth, maternity leave and financial incentives. However, a recent trend has emerged in which banks are enhancing benefits to support child care after birth, including offering reduced working hours.
On Feb. 10, Woori Bank introduced a one-hour reduced work schedule for employees with children entering elementary school. They can choose a two-month period between March and May to utilize this benefit.
Employees with first- and second-grade elementary schoolchildren can also start work 30 minutes late during this period, arriving at 9:30 a.m. and leaving at 6 p.m.
In addition, a new policy allows employees with children under 12 years old to work from noon to 5 p.m. for up to one year per child, including a one-hour break. Excluding the break, this effectively reduces their daily working hours to four.
KB Kookmin Bank also recently introduced a policy that shortens the working hours of employees with young elementary school-aged children by 30 minutes, as agreed upon in the 2024 labor-management negotiations to address low birthrates.
To support parents of newly enrolled elementary school students, Hana Bank also offers a one-hour reduction in working hours that is flexibly applied, allowing employees to choose between starting work at 10 a.m. or leaving at 5 p.m.
The banking sector is already well known for its substantial childbirth incentives. While conditions differ slightly by bank, childbirth bonuses can reach up to 20 million won ($14,000).
Hana Bank recently increased its childbirth allowances, raising the amounts from 1 million won to 5 million won for the first child, 2 million won to 10 million won for the second, 3 million won to 15 million won for the third and 4 million won to 20 million won for the fourth.
Hana Financial Group Chairman Ham Young-joo, back row fifth from left, poses with children, parents and other participants at the opening ceremony of the 100th nursery funded by the group at Bonghwa County, North Gyeongsang Province, Oct. 31. Under the group’s flagship social contribution project, it supported the establishment of 100 nurseries across the country. Courtesy of Hana Financial Group
Conditional reemployment leave for child care is also a unique policy in the banking sector.
Kookmin Bank became the first to introduce this policy last year, granting employees, who took child care leave and resigned, a reemployment opportunity three years after resigning.
Through this system, employees can take up to five years and six months for child care, including two years and six months of child care leave.
After that period, they can return to the bank without going through a separate hiring process. Upon reemployment, they are reinstated to their previous rank, ensuring job stability and eliminating concerns about salary reductions or other disadvantages.
“This policy allows employees with children to secure sufficient time for child care while maintaining career continuity, alleviating concerns about career interruptions,” a Kookmin Bank official said. “In its first year, 45 employees applied for the program, while 23 have applied this year.”
Since the 2000s, Korea’s low birthrates have accelerated, with the total fertility rate declining from 1.48 in 2000 to 1.23 in 2010 and further dropping to 0.72 in 2023. The country has consistently maintained one of the lowest total fertility rates in the world.
Bank clerks and customers are seen at a local bank in Seoul, Feb. 26, 2024. Newsis
Banks are focusing on the issue of low birthrates not only due to government pressure or corporate social responsibility but also to ensure stable future growth. A declining birthrate ultimately leads to population decline, which means fewer customers for banks in the long run.
Low birthrates also negatively impact real estate-related loans, a major source of bank revenue. As housing transactions are often tied to childbirth and child-rearing, a drop in birthrates may result in decreasing housing demand and a sluggish real estate market.
“Both labor and management in the banking sector are working to create a more family-friendly corporate environment,” an official from one of the major banks said. “Perhaps for this reason, the key focus of the 2024 labor-management negotiations was improving policies to reduce the burden of childbirth and child care.”