[1mm Financial Talk] Even the 'God's Workplace' is Escaped... MZ Generation Leaving National Policy Banks

Recently, employees from the MZ generation (Millennials + Generation Z) have been leaving national policy banks one after another. Financial public institutions have long been regarded as ideal workplaces due to their stability and high salaries, but their status no longer seems as strong, with some employees even moving to internet-only banks.

According to the financial sector on the 18th, KDB Industrial Bank saw 21 employees leave last year (according to the labor union), with more than half of them?12 employees?being at the 5th grade level, corresponding to junior staff and assistant managers. Eight employees at the 4th grade level, corresponding to managers, also resigned, meaning that 20 mid-level staff members left. So far this year, seven employees have resigned, five of whom were 5th grade staff. This trend is also being detected at the central bank, the Bank of Korea. In February alone, six employees left the Bank of Korea, becoming a hot topic in the financial sector, and according to the office of Kim Soo-heung of the Democratic Party of Korea, about 30 employees leave the Bank of Korea annually. Employees in their 20s and 30s accounted for more than 40% of all resignations.

The resignations and job changes are interpreted as being due to the changing status and treatment within financial public institutions. According to Alio, the public institution management information disclosure system, the average annual salaries last year at Industrial Bank (113.7 million KRW), Small and Medium Business Bank (107.72 million KRW), and Korea Eximbank (105.23 million KRW) were not significantly different from those at commercial banks such as KB Kookmin Bank (110 million KRW), Shinhan Bank (107 million KRW), and Hana Bank (106 million KRW). The Bank of Korea’s average salary was about 100.34 million KRW, which was lower than that of commercial banks. A financial sector official said, "In the past, national policy banks like Industrial Bank had much higher salaries, but due to limits on salary increases, compared to commercial banks and general companies, the appeal has diminished."

There are also quite a few young employees who dislike the conservative and static work atmosphere of public institutions. Some former national policy bank employees have moved to internet-only banks, which have only been in operation for about five years. Recently, three employees from Industrial Bank, IBK, and Eximbank joined an internet-only bank. The corporate cultures of KakaoBank, K Bank, and Toss Bank, which have the DNA of IT companies, seem to have had a significant influence. KakaoBank’s average salary is also high at 153 million KRW (including stock option exercise gains). A national policy bank official said, "Many of the new employees these days seem to want to develop products directly or work in roles that have direct contact with consumers."

Recently, rumors about the relocation of national policy banks to provincial areas have also created an atmosphere of employee departure. The Yoon Suk-yeol administration is pushing for the relocation of Industrial Bank to Busan, and relocations of Eximbank and others are also being discussed, causing unrest among employees. In particular, employees who would have to move their residences are considering changing jobs. A financial labor union official predicted, "If the Busan relocation and others are actively pursued this year, the number of young employees resigning will increase significantly."