Urges Minimizing Disruptions in New Corporate Hiring... "Concerns Over Sharp Rise in Youth Unemployment"

[Asia Economy Reporter Kim Hyewon] The Federation of Korean Industries (FKI) announced on the 2nd that it sent a cooperation letter to its member companies on the 31st of last month, urging them to carry out new hires as planned as much as possible, warning that youth unemployment could surge due to the novel coronavirus infection (COVID-19).

In addition, the FKI presented seven measures to overcome disruptions in new hiring to its member companies: ▲ Resuming delayed hiring schedules once the spread of infection subsides ▲ Avoiding postponement of appointments or cancellation of confirmed hires ▲ Implementing 'untact hiring' through non-face-to-face methods such as online recruitment briefings, artificial intelligence (AI), and video interviews ▲ Actively utilizing rolling recruitment ▲ Extending deadlines for submitting language proficiency and certification exam scores ▲ Actively disseminating hiring-related information ▲ Thorough disinfection of hiring venues.

According to the FKI's analysis of unemployment rates by age group during the International Monetary Fund (IMF) foreign exchange crisis, the unemployment rate among people in their 20s increased the most significantly among the compared groups. The unemployment rate for those in their 20s was 11.4% in 1998, immediately after the foreign exchange crisis. This was a 6.1 percentage point increase compared to the previous year. At that time, the increase rates in unemployment by age group were highest for those in their 20s (5.3→11.4%), followed by those in their 50s (1.2→5.3%), 40s (1.5→5.5%), and 30s (1.9→5.7%).

Choo Kwang-ho, Executive Director of the FKI, said, "In economic crisis situations, companies tend to significantly reduce new hires primarily due to employment rigidity, raising concerns about a sharp rise in youth unemployment. The loss of skill acquisition opportunities for future generations can lead to decreased productivity not only for individual companies but also for the overall economy, so active efforts by companies to hire young people are necessary."