8 in 10 Foreign Businessmen Cite Inflexible Labor Market
By Oh Young-jin
Staff Reporter
Eight out of 10 foreign businesspeople see a confrontational relationship between labor and management in Korea, while nine of them cite a lack of flexibility in the labor market as the reason behind making them think twice about investing in Korea.
In a survey of 154 foreign companies in Korea conducted by Gallup Korea, about 81 percent of respondents said labor-management relations in Korea were confrontational. The Federation of Korean Industries (FKI), a lobby group for big businesses, hired Gallup for the survey.
About 21 percent said relations are very confrontational, while a mere 4.5 percent characterized the relationship as ``cooperative.''
More than nine out of 10 said that the confrontational relationship was detrimental to Korean firms' corporate competitiveness.
About 88 percent of the respondents described the labor relations as ``rigid,'' while none cited any signs of flexibility.
More than half expressed their reservations about doing business in Korea due to the lack of this flexibility.
They argued that ending this inflexibility was needed to make Korea an attractive market for foreign investors.
About 22 percent called for more flexibility in working hours for workers, while approximately 21 percent argued in favor of stronger management rights to reassign workers.
More than seven out of 10 said that once more flexibility is introduced into the labor market, it would have a positive effect on the creation of more jobs.
Regarding the transition of part time workers onto the regular payroll, which has been implemented since last July, approximately four out of 10 said that this was counterproductive.
As for impending issues related to unions, about one third claimed that the lack of flexibility in firing or reassigning workers tops the list of complaints. About 16 percent drew attention to the seniority-based pay scale.
A labor strife is an annual event by militant unions that dampen foreign direct investments but the current government has vowed to fix it.