Conglomerates reluctant to hire amid zero-sum labor market

Jobseekers visit a job fair at the COEX convention center in Seoul, Monday. Yonhap

Korea’s four largest conglomerates — Samsung, SK, Hyundai and LG — have shown a pattern of hiring fewer younger workers, as aged employees are increasingly reluctant to leave their workplaces amid rising life expectancy, according to data and experts Tuesday.

This trend persisted despite the companies reporting significant growth in assets and revenues between 2022 and 2024, according to data from Leaders Index.

Data from the corporate market tracker found that the four conglomerates’ value of total assets jumped by 15 percent to a record high of 1,444.7 trillion won ($1,037 billion) during the same period.

Their combined net profits also soared with a bigger margin of 30.8 percent between 2023 and 2024, while their sales increased merely 0.5 percent during the same period.

However, they have not grown their workforce accordingly. Their combined employees reached 746,486 in 2024, a slight increase from 745,691 in the previous year.

The four conglomerates were more reluctant to hire new employees compared to the top 30 companies in Korea. The total number of employees at the 30 largest firms by assets here increased by 8.8 percent during the same period.

Experts and industry officials said the trend will continue to remain in place, as older employees have a growing tendency to work until retirement, while companies have fewer incentives to hire younger workers amid the rapid rise of artificial intelligence (AI).

“It becomes increasingly difficult for companies to lay off employees due to labor laws and regulations here,” an official from a conglomerate said. “As the country is pushing to increase the legal retirement age from 60 to 65, younger workers will face a harder time in getting a job at major companies here down the road.”

The rise of AI is another crucial factor hindering younger people’s inroads into the job market, according to the official.

“The tech-driven conglomerates keep looking for ways to reduce labor costs by introducing more efficient AI platforms,” the official said. “The trend will accelerate, which will make it much harder for young people to get a new job at not just big, but small firms.”

Experts advise the government to conduct drastic deregulation for companies to increase their hiring.

“Korea levies a high level of corporate and inheritance taxes, when compared with other developed nations, so most big companies are on path to make investment in foreign markets for a number of factors, such as reduced labor costs and less tax burden,” said Kim Dae-jong, a professor of business administration at Sejong University.

Kim added that Korea’s undesirable labor structure will not change until the government takes specific steps for the benefit of the major conglomerates in terms of taxes and labor regulations.