[IT Developer Battle] The Vicious Cycle of 'Poaching Experienced Workers'... Why Is There a Shortage of Talent?

Restriction on Expanding University Quotas in the Seoul Metropolitan Area... Inflexible Supply of Future Workforce
Global Companies from China and India Offer High Salaries to Poach Talent
Government Talent Development Plans Insufficient to Solve Short-Term Supply Issues

[Asia Economy Reporter Kang Nahum] The IT and gaming industries' 'salary increase relay' to secure top-tier developers shows no signs of stopping. Due to a limited talent pool, it is difficult to find high-level developers, resulting in a vicious cycle of 'poaching experienced workers.' Although the government has stepped up to support related workforce development, it has yet to present short-term solutions. Experts point out that alongside the government's continuous talent cultivation, companies must internally train the necessary personnel through various methods.

◆ More than 30,000 shortage... More serious shortage of high-level talent = According to the telecommunications industry on the 9th, SK Telecom tentatively agreed in the labor-management wage negotiation TF to pay all employees 8 million KRW as a wage negotiation settlement amount. This amount is about twice that of previous years, reflecting the recent fierce competition for talent recruitment in the IT industry.

The gaming industry is already in the midst of a salary increase relay. Early last month, Nexon, Com2uS, and Gamevil collectively raised all employees' salaries by 8 million KRW, followed by Krafton announcing a 20 million KRW salary increase for development positions, drawing attention. In addition, small and medium-sized companies such as Joycity (10 million KRW), Vespa (12 million KRW), and Smilegate (8 million KRW) have also consecutively raised salaries.

The chain of salary increases is mainly attributed to the developer shortage. The developer shortage issue is also evident in various indicators. According to the Industrial Technology Manpower Supply and Demand Survey by the Korea Industrial Technology Promotion Agency, among the 12 major industries with many industrial technology personnel, the shortage rate is highest in software (4.3%).

In the 'Future Job Outlook' published by the Software Policy & Research Institute in 2018, it was predicted that by next year, a shortage of 31,833 new personnel in four major future promising fields would cause a supply-demand gap. In particular, the shortage of high-level personnel with graduate degrees or higher, rather than entry- or mid-level, is expected to be 7,268 in artificial intelligence, 1,578 in cloud, 3,237 in big data, and 7,097 in augmented and virtual reality, forecasting a deepening qualitative mismatch in workforce supply and demand.

◆ Hampered by metropolitan area enrollment restrictions = Behind this problem lies a structural issue that makes it difficult to produce many developers at once. Industry and experts particularly point to the Capital Region Readjustment Planning Act as one of the main causes of the workforce shortage. Enacted in 1982, this law restricts the expansion of enrollment quotas at universities in the metropolitan area.

Yoon Hee-sook, a member of the People Power Party, pointed out, "The number of computer engineering students at Stanford University in the U.S. has rapidly increased recently, with 745 students (50.9%) out of a total engineering enrollment of 1,463 last year, but Seoul National University’s computer engineering enrollment has hardly changed in the past 10 years, and the same applies to Korea University and Yonsei University."

She criticized, "With the advent of the 4th Industrial Revolution and the rapid expansion of AI and big data fields, the demand for computer engineering among university entrants is exploding worldwide, but the country is failing to produce the workforce required by future industries. Due to the Capital Region Readjustment Planning Act, the total enrollment of universities is tightly restricted, and the government shows no interest in a system that can flexibly supply the workforce demanded by the future industrial landscape."

Overseas outflow of developers is also cited as one of the causes of the workforce shortage. Professor Kim Yong-hee of Soongsil University’s Department of Business Administration said, "Korea’s S-level developers are moving overseas as global companies in China and India offer billion-won-level salaries. Korean companies tend to avoid hiring overseas developers because of the high indirect costs such as housing issues."

◆ Companies must train their own workforce = On the 25th of last month, the Ministry of Science and ICT finalized the 4th Basic Plan for Science and Technology Talent Development and Support (2021?2025) through the National Science and Technology Advisory Council meeting. The core goals include securing talent equipped to respond to future changes, maintaining and expanding the scale of science and technology talent, and advancing the ecosystem to become a talent-attracting country. Through this, the government plans to steadily support the growth of approximately 180,000 innovative talents in future promising fields such as digital (AI·SW), green new deal, and bio new industries.

The 'Plan to Train 100,000 AI·SW Core Talents' prepared last year will also be implemented starting this year. This project will run until 2025 and receive about 1 trillion KRW in national funding. The government’s budget for this year is 262.6 billion KRW, aiming to train 16,000 AI·SW talents.

Experts point out that this is insufficient to solve the immediate workforce supply and demand problem. Kang Young-chul, a visiting professor at KDI School, emphasized, "Each company must cultivate the personnel it needs on its own. Concentrating investment in this area is essential to lead new industries."

Professor Kim also said, "Government projects focus on training basic personnel, not the high-level experts needed by the industry. Supporting companies’ internal talent development programs would actually be of great help," he added.