Battery industry alarmed over brain drain

SK Innovation's EV battery plant under construction in the U.S. state of Georgia. Courtesy of SK Innovation

By Kim Hyun-bin

Local electric vehicle (EV) battery firms are strengthening policies to prevent a brain drain. Most firms have been recruiting experienced engineers and other experts to make technological advancements in the sector, while other competitors are trying their best to hold on to their most valued workers.

Industry watchers believe the recent ruling by the U.S. International Trade Commission (USITC) in favor of LG Energy Solution (LGES) against SK Innovation (SKI) could serve as a precedent in future technological leak cases in the industry. The two Korean companies had been locked in an intellectual property dispute, and the USITC issued a 10-year import ban on some of SKI's lithium-ion batteries.

The commission said that SKI committed destruction of evidence that had been “ordered at a high level and was carried out by department heads throughout SK."

“More companies will be cautious before trying to recruit experts with technologies in the battery field as the recent ruling by the ITC gave a devastating blow to SKI and it will serve as an example,” an industry official said.

The SKI-LGES conflict began in 2017, after SKI continued to recruit key researchers and engineers from LG Chem, the parent company of LGES. Workers have a choice of moving to other firms if they believe the change offers more benefits. However, LGES grew suspicious that the departing workers left with key documents regarding battery technology.

Despite the ruling, many believe a brain drain of EV experts and technological leaks are likely to become worse in the coming years as technological advancements in the field are critical to meeting the rapidly growing demand for EVs.

Just last month, Samsung SDI and SKI announced plans to hire experienced EV battery researchers and engineers and are scheduled to interview candidates in the near future.

It is imperative for a battery firm to maintain technological superiority within the industry to continue achieving success in the global market backed by talented R&D personnel. However, industry watchers believe there will be a shortage of experienced personnel in the market in the coming years.

According to a report released by the Ministry of Trade, Industry and Energy, there will be a shortage of personnel in the top five new growth sectors including next-generation semiconductors and EV batteries totaling around 155,000 by 2029, a major difference compared to late 2019 when the shortage was around 2,845 personnel.

A brain drain is particularly a threat from overseas competitors especially China. China has been offering up to three times the salary and other benefits including housing to recruit workers.

Industry insiders believe there will be more conflicts similar to LGES and SKI in the future.

“Local battery firms are staying on high alert at all times for document leaks, constantly upgrading company security programs and employee logins and installing cameras,” another industry official said. “But if a worker intentionally plans to leak information, there isn't much a firm can do but to swiftly track and take additional countermeasures including lawsuits.”