Kim Hyun-bin began his journalism career at Arirang TV from 2012 to 2017, specializing in defense, foreign affairs and the economy. In 2018, he joined The Korea Times, covering society and business, and is currently responsible for embassy affairs.
Hyundai Motor seeing higher workforce turnover than Samsung
Hyundai and Kia headquarters in Seoul / Courtesy of Hyundai Motor Group
By Kim Hyun-bin
Young employees switching jobs due to gradual reduction of salary
By Kim Hyun-bin
Employees are leaving Hyundai Motor due to a gradual reduction in pay, with 400 employees in their 20s leaving the country's second-largest conglomerate last year.
According to Hyundai Motor's sustainability report, 3,081 Hyundai Motor employees accounting for 4.42 of the total workforce left the firm last year. The employee turnover rate has been gradually on the rise, hitting 3.62 percent in 2018 and 3.85 percent in 2019.
Samsung Electronics saw a 2.1 percent turnover rate during the same period. Hyundai's relatively high rate of retirement was said to have raised the turnover rate as people in their 50s accounted for 3.5 percentage points of the 4.42 percent. However, this marks the first time the company's sustainability report stated the ratios for different age groups.
The turnover rate below age 30 recorded 0.6 percent estimated at around 400 employees. However, when looking separately at the age bracket, the turnover rate stands at 5.7 percent as there are around 7,000 employees under 30 years of age working for the carmaker.
Many of the young employees are switching jobs due to the gradual reduction of salary. The average annual company salary comes out to 88 million won, but employees in their 20s receive much less or even endured an overall pay cut in the past few years as the company slashed bonuses drastically.
In 2012, the company offered bonuses as high as 500 percent of the monthly paycheck but this has been on a gradual decline and last year employees received 150 percent bonuses. In addition, the lump sum allowance also shrunk from 9.5 million won to 1.2 million won in the cited period.
“It is difficult to pinpoint that the younger staff are leaving due to the reduction in bonuses,” a Hyundai Motor official said.
This is the reason behind why Hyundai Motor's millennials and Generation Z employees established their own union, as the preexisting union has been mostly skewed towards representing production workers. The union of Hyundai Motor voted for a strike Wednesday, after failing to narrow differences with management on wages and collective bargaining issues.
The results of the vote are scheduled to be released early Thursday. In the 13th round of negotiations, Hyundai Motor management proposed to include an increase of 50,000 won ($44.20) to the basic pay, a one-time bonus of 100 percent of monthly salary plus an additional 3 million won, an encouragement allowance of 2 million won and 100,000 won in gift certificates.
However, the union rejected the proposal.
“The strike does not start immediately after the vote ― it needs to get approval from the regional employment and labor administration, and after receiving approval, the union leaders will decide when to conduct the protest, so that will take some time,” another Hyundai Motor official said. “It is not like the old days, where the union conducts a full-on strike; nowadays they hold around a two-hour strike daily as a warning to management.”
Hyundai Motor believes the union's proposal was too extreme to accept as the company suffered major blows from the COVID-19 pandemic and automotive chip shortages that led to the temporary shutdown of its plants. Also the gradual decline in operating profit since 2010 is another cause for concern.
The strike will lead to consumer inconvenience as it will take longer to receive their vehicles. Popular models such as the Tucson SUV already have a six-month wait time. There is a high possibility Hyundai Motor will increase bonuses and depending on the union's decision the upcoming strike could be prolonged.