Value context and insight. lkm@koreatimes.co.kr
Companies scale down year-end parties amid downturn
By Lee Kyung-min
By Lee Kyung-min
Companies used to organize lavish year-end parties for employees to recognize their accomplishments for the year and motivate them to work harder in the coming year. But this is becoming a thing of the past this year as more businesses scale down year-end gatherings or scrap them altogether amid the prolonged economic downturn and growing demand for work-life balance.
Companies are encouraging workers to take days off for unpaid leave, a recommendation that can not only save labor costs but also altogether avoid what would have been a costly event, with expenses for catering and other “non-productive” services.
Samsung, LG and Hyundai have decided to hold only either a year-end or early-year ceremony, held in December or the first week of January, respectively, to reflect the past 12 months and better prepare for the coming year.
Even their subsidiaries concluded the 2019 business year in the third week without ceremonies that used to be mandatory for all employees.
“We did not hold a large event this year,” an office worker at one of Korea's top four business groups said on condition of anonymity. “Instead, company leadership's message will be delivered online. Many firms seem to be putting less of an emphasis on the event in recent years given the industry-wide slowdown.”
The depressed sentiment is particularly pronounced in the display and carrier businesses hit hardest amid the Korea-Japan trade feud.
Display makers have struggled due to export restrictions Japan imposed on key materials needed for their manufacturing.
Airline companies have been taking a heavy blow following a nosedive in the number of overseas travelers to Japan in the summer amid anti-Japan sentiment, compounded by weakened Korean currency among other adverse business conditions.
“We fear the soon-to-come corporate streamlining will put people out of work and reduce workers' salary even more than previously expected,” an employee at a flagship carrier said. “Most of the industries are believed to have initiated emergency mode, an industry term for layoffs and restructuring. Some are asking workers to retire.”
The two main airlines, Korean Air and Asiana Airlines, swung into the red in the July-September period compared to the year before.
The top Korean Air reported a net loss of 267.8 billion won ($230 million), while Asiana Airlines, the second-largest, logged a net loss of 232.5 billion won.
Many firms against this backdrop encourage workers to take unpaid leave at the end of December, while some extend the leaves into the first week of January.
The labor cost-saving recommendation is in line, they say, with vacation plans at global firms where about three-week or even one-month vacations are allowed in December.
“Many workers nowadays consider taking a long vacation uninterrupted by work,” a senior company manager said on condition of anonymity. “Workers that had enough time off to rest can get back to work fully recharged and ready. This boosts productivity in the long term. Some might prefer money to time off, but management encourages them just the same.”