EXCLUSIVE SK Telecom to raise wages by 2.5%

SKT building in Seoul / Courtesy of SKT

By Kim Hyun-bin

SK Telecom (SKT) is set to increase employee wages and welfare for this year in hopes of better satisfying and retaining workers, after some of its IT industry competitors made headlines for their significant pay raises, according to company officials Tuesday.

The officials said SKT's management and union have agreed to increase the base wage by 2.5 percent, up from the 1.9 percent proposed earlier. It will also provide 7 million won ($5,530) of additional pay to all employees this month.

The move comes as its competitors have been increasing wages and benefits drastically.

Kakao also raised salaries by 15 percent this year, and Naver's workers and management reached a tentative agreement on a wage hike of 10 percent. Last week, Samsung Electronics announced plans to increase employee wages by 9 percent.

“Compared to the industry, the 2.5 percent base salary increase may seem small, but SKT is well-known not just within SK Group but the industry for receiving tens of millions of won in incentives and high salaries. In addition, the additional salary of 7 million won for all employees is also significant,” a senior industry official told The Korea Times, Tuesday.

CEO Yoo Young-sang

SKT also plans to abolish the salary cap for employees at the deputy manager level and below, and to extend paid parental leave to two years from one year as well as extend the days of paid leave for long-term employees under the “Refresh” program that aims to compensate workers who have been working for the company for five years or longer.

“Currently, we are providing paid additional vacation days for employees who have worked for the company for five years, 10 years, 15 years, 20 years,” an SKT official said. “Currently, for five-year employees, they are provided 10 days, while 10- to 20-year employees are given 45 extra paid vacation days.”

With the changes, employees who have worked for at least five years will be given up to 30 days of paid leave, up from the current 10 days.

The company is also set to expand the Happy Friday program from once a month to twice a month. Currently, every third Friday of the month, SKT allows employees to take the day off, once they have fulfilled the 40-hour workweek requirement.

“Not only at our company, but also at many companies these days, 'attracting talent' is one of the big topics. Not only salary, but also internal welfare is an important reason for jobseekers to choose a company,” an SKT official said.

Last week, SKT CEO Yoo Young-sang held a town hall meeting and discussed the business vision and office culture with the participants. Regarding the wage increase issue, he mentioned that it was "in the process of worker-management negotiations." SK Telecom is expected to officially announce the results of worker-management consultations as early as this week.