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| Deputy Prime Minister and Minister of Economy and Finance Choo Kyung-ho, third from left, speaks during a meeting of the committee on operation of the public organizations at Government Complex Seoul in central Seoul, Friday. Yonhap |
By Yi Whan-woo
The government will cut the maximum number of employee hiring allocations at public organizations beginning next year in a bid to overhaul management, which it is criticizing as inefficient and lax.
The plan is anticipated to reduce as many as 30,000 jobs at 350 public organizations that expanded their operations under the previous Moon Jae-in administration.
This is the first time in 14 years that the government has put forward a plan to reduce the personnel of the public institutions, in the "New Government Public Institution Innovation Guidelines" announced by the Ministry of Economy and Finance, Friday.
The guideline for public organizations includes slashing at least 10 percent of daily expenses in the second half of this year, selling off unprofitable and non-core businesses here and abroad, as well as axing welfare benefits.
The 350 institutions, including 36 state-owned firms, are being asked to submit draft measures in August, respectively, to conform to the guidelines.
"The government will no longer tolerate public organizations' inefficiency and lax management," Deputy Prime Minister and Minister of Economy and Finance Choo Kyung-ho said at a meeting of the committee on operation of the public organizations.
He said that the public sector should be ready for "tight-belted and excruciating" reforms during this time of deepening economic difficulties.
Choo noted the guidelines are designed to draw out the public institutions' "self-made efforts" for overhaul and that they are anticipated to work together with relevant ministries.
According to the finance ministry, the 350 institutions altogether employ about 448,000 employees, which is 30,000 less than the minister says they are permitted to hire.
The institutions will be asked to keep the current level of employment, or less. To this end, they are expected to minimize new hires while not actively filling posts made vacant by retirements or resignations.
To cut spending on salaries, the number of managerial or upper-level positions should not exceed 30 percent of the entire employee base at each organization.
Some state-run companies already exceed the 30-percent mark, including Korea Land Housing (LH) at 37.9 percent and the Korea Racing Authority at 33.9 percent.
Workspaces for executives and CEOs will be scaled down to save rental costs. For instance, a CEO will not be allowed to have an office that exceeds 99 square meters in size while that of an executive should not exceed 50 square meters.
Any overseas businesses that are not profitable will needed to be sold off, as well as memberships at golf clubs and condominiums, which are regarded as excessive welfare benefits.
Among the targeted organizations, the government has raised questions especially over the financial soundness and business capitalization of state-run enterprises.
Although they are not private organizations, the government criticizes them for their collective amount of debt having risen by more than 40 trillion won ($33.5 billion) under the Moon administration.
Meanwhile, the finance ministry said the overhaul plan does not mean immediate restructuring. However, it also said it will seek to privatize the public firms.
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