[Factories Are Aging] The Power of Small Giants Is Youth... Must Provide 'Wages + Vision'

Trends in Job Preferences Among People in Their 20s
Work Hours, Task Autonomy, and
Work Environment Valued Beyond Salary

Worker-Centered Process Improvements
Naturally Enhance Productivity and Quality

Reference photo (unrelated to the article content)

[Asia Economy Reporters Kim Bo-kyung, Lee Jun-hyung] The worst youth unemployment crisis continues. The prolonged COVID-19 pandemic has further exacerbated difficulties in the job market. The employment cliff for young people was anticipated. In 2018, the government predicted that over the next 3 to 4 years, the large number of late-20s eco-generation (born 1991?1996), children of the baby boom generation, would flood the job market, leading to a shortage of jobs. Although a supplementary budget of 3.9 trillion KRW was allocated targeting nearly 400,000 eco-generation youth jobs, the effect was minimal.

The private research institute LAB2050 conducted an experiment last year targeting job seekers in their 20s to understand youth job preference trends. The results showed that besides wages, factors such as flexible working hours and ‘control’ over work discretion were important in employment decisions. Subjective satisfaction and growth potential were also rated highly. LAB2050 Research Fellow Hwang Se-won said, "Policies that encourage young people to enter unwanted jobs just because the economic situation is poor will have negative mid- to long-term effects not only on youth but on the overall economy." LAB2050 CEO Lee Won-jae advised, "The crisis faced by the COVID generation youth will become a long-term crisis for our entire society. Policy directions must be shifted to suit the characteristics of the youth generation that pursues both freedom and stability simultaneously."

Nom Min-seon, head of the Future Strategy Research Group at the Korea Small and Medium Business Institute, emphasized, "It is also important to create an environment where young people can be attracted by improving working conditions through projects such as smart manufacturing innovation promoted by the Ministry of SMEs and Startups."

Job seekers who participated in last year's Youth-Friendly Smart Industrial Complex Job Belt project are conducting mock interviews.

◆ "Entrepreneurship and Vision Are Important" = Experts emphasize the importance of entrepreneurship among business leaders. Professor Lee Jeong-hee of the Department of Business Administration at Chung-Ang University, who served as president of the Korean Small and Medium Business Association, said, "The power that attracts employees to a company is not just wages," adding, "Leaders of small and medium manufacturing companies must have leadership that earns employees’ respect and can show the company’s vision." According to Professor Lee, even if the company is struggling now, employees should be able to see the vision and feel willing to work with the company. She said, "We need to spread dynamism based on a spirit of challenge."

Jung Yong-joo, former director of the Gyeonggi Furniture Industry Cooperative, said, "If a company has no vision, young people will not come," emphasizing, "Business owners have the responsibility not only to pay salaries but also to develop competitiveness for their employees." He added, "If a company improves equipment simply to increase productivity, safety accidents may occur or work may become overloaded. However, if the process is improved so that workers can perform tasks comfortably and safely, productivity and quality will naturally improve."

Without changes in working conditions, solving the ‘job mismatch’ is difficult. The current reality in South Korea is that youth suffer from job search difficulties, while small and medium enterprises face chronic labor shortages. An executive at an aluminum processing company in Hwaseong, Gyeonggi Province, explained, "Wages are important, but the first thing that needs improvement is working conditions," adding, "While large companies and first-tier suppliers have the latest expensive equipment, second- and third-tier suppliers do not, resulting in significant differences in labor intensity." He said, "Since we started automating processes in 2016, the number of young production workers has gradually increased," and added, "Having worked in manufacturing sites for over 20 years, I deeply feel the importance of a work environment where workers feel they can work for a long time."

[Image source=Yonhap News]

◆ Transition to Sustainable Fields = Efforts by the government to actively support the transition of small and medium manufacturing businesses to new industries are also necessary. Due to industrial structural changes caused by the Fourth Industrial Revolution and others, the decline of some traditional manufacturing sectors is inevitable. Kim Seung-tae, deputy director of the Korea Labor Institute, explained, "As countries develop into advanced economies, their industrial structures are reorganized around new technologies and research and development," adding, "Industries with limited growth potential must transition to new businesses to survive." Kim said, "Overall, support should be strengthened and sectors with high growth prospects should be nurtured."

Efforts to create jobs in advanced manufacturing nations are also noteworthy. Since 2006, the United States has conducted the ‘WIRED’ (Workforce Innovation in Regional Economic Development) program, a partnership among government, industry, and education/training institutions to create quality youth jobs and enhance regional competitiveness. Previously, institutions pursued job projects independently according to their own plans, but through partnerships established by the WIRED program, they could collaborate and implement projects cooperatively.

According to the Korea Labor Institute, more than 60% of German small and medium enterprises strive to be perceived as attractive employers. They manage not only material rewards such as profit-sharing and performance bonuses but also corporate image factors like trust and recognition. Corporate brand management contributes not only to securing young talent but also to fostering a collaborative work atmosphere and reducing turnover rates. About 70% of German SMEs actively support career development for young workers after hiring, investing more than six days annually in retraining.