[Desk Column] Persistent SME Workforce 'Mismatch' Despite the Passage of Time

One of the difficulties that small and medium-sized enterprise (SME) representatives always point out is the 'labor shortage.' It was the case 20 years ago, 10 years ago, and it remains so today. Their complaint, "It's really hard to find people," has not changed over time. The labor shortage is more pronounced in jobs located in rural areas and in the manufacturing industry.

So, what about the difficulties faced by young people? The job market is so tight that there is even talk of preparing for employment from the time one enters university. Nowadays, retaking the job exam once or twice is common. The problem between SMEs suffering from labor shortages and young people unable to find jobs is a difficult-to-solve 'mismatch.'

One of the biggest reasons for this mismatch is social perception. The jobs young people prefer are large corporations, public enterprises, or government positions. The majority do not prioritize SMEs. This is not something to blame them for. Social perceptions about brand names, reputations, and backgrounds cannot be changed by the efforts of a single individual and are difficult to change at all. Young people grow up learning that 'studying hard to become a professional or get a job at a large corporation means a successful life.'

The second reason is wages. According to the Ministry of Employment and Labor's announcement last year, the average annual wage for companies with 500 or more employees (based on college graduates) was 71.87 million KRW. For companies with 30 to 99 employees, the average annual wage was 49.6 million KRW, a difference of 22.27 million KRW. This means that the annual salary at SMEs with fewer than 100 employees is 45% less than that at companies with 500 or more employees. This is a significant gap that is difficult to narrow. Generally, a company's wage level is proportional to its welfare and treatment. Some SMEs hesitate to make even minimal investments for their employees, and many lack the capacity to invest. It is an unavoidable reality that young job seekers who are thinking about marriage and childcare prefer workplaces with childcare facilities or flexible working hours.

The uncertainty associated with the company is also a reason. Uncertainty about the business potentially brings fears such as job loss and unemployment. Uncertainty about the management cannot be ignored either. A friend once shared a story about going to an interview at a food ingredient company and being horrified when the CEO instructed to place talismans on every picture frame on the office walls, causing the friend to leave immediately. Another job seeker turned away because the CEO, executives, and team leaders were all relatives.

Lack of information about excellent SMEs is also a factor that cannot be overlooked. When on the reporting field, I often encounter companies that are not large in scale but are excellent and have growth potential. Surprisingly, these companies also experience difficulties in recruiting. Most of these companies focus their energy on their business, making it difficult to apply effective company promotion know-how. Among mid-sized companies, there are some hidden gems that only a few people know about.

Social perceptions, wages, welfare, and treatment are not easily improved overnight. They cannot be overcome by the efforts of a single company alone. Social support through the expansion and supplementation of various systems must be provided. Fields suffering from chronic labor shortages, such as the root industry, need more active and realistic alternatives, such as securing foreign workers. As industrial structures change and living standards improve, some jobs inevitably become neglected. Also, employment flexibility must be ensured, especially for SMEs and mid-sized companies. Job seekers must develop the ability to discern good companies. Continuously staring at the narrow door that everyone is looking at will not provide the answer.

Kim Minjin, Head of the Ministry of SMEs and Startups