"Labor Shortage? We Hire by Persuading Them They Can Join Naver in 2 Years."

Higher Turnover Rate Compared to Large Corporations
Supply Shortage Worsens Despite Various Incentives

[Asia Economy Reporter Lim Hye-seon] "Startup recruitment difficulties? We persuade them by saying we'll send them to Naver in two years."

This is a statement from the CEO of an artificial intelligence (AI) and data company. Recently, the biggest concern for startups is 'hiring developers.' Although companies are offering various incentives such as stock options and welfare benefits to attract talent, the manpower shortage is worsening. At the 'Digital National Agenda On-site Meeting' hosted by the Ministry of Science and ICT on the 23rd, about ten IT company CEOs shared their difficulties and unanimously said that while the government's goal to train one million digital talents is important, more practical measures are urgently needed.

Unlike large corporations, each individual in a startup has a significant impact. Therefore, securing and retaining talent is a crucial factor for the sustainable growth of the company. However, the industry diagnoses that the turnover rate is more than three times higher than that of large companies. Typically, the average tenure at startups is one to two years. According to quarterly reports, the actual tenure of developers at the data company Flitto is 1 year and 4 months for men and 6 months for women. Lee Jung-soo, CEO of Flitto, said, "Most employees learn on the job at startups and get scouted by large companies within two years," adding, "It's not easy to hire because people say that if you learn here, you can move to a large company after two years," illustrating one aspect of the manpower shortage.

Park Jung-woo, co-CEO of Soynet (an AI-specialized company), said, "Looking at the workforce structure of startups, there are only senior workers nearing retirement and juniors, with no middle-level employees," lamenting, "In a situation where technology trends change rapidly, finding mid-level practitioners who can work efficiently is like finding a needle in a haystack." He added, "Please consider government incentives for hiring senior technology holders nearing retirement."

Although companies are increasing various welfare benefits such as remote work, it is practically insufficient to match the welfare systems and salaries of large corporations. Marvelous offers various benefits including five-day remote work, one refresh day (paid leave) per month, biannual salary negotiations, and stock option opportunities. Gil Hyun-gyeom, director of Marvelous (an AI-based metaverse company), said, "We implemented a five-day remote work system, which large companies like Kakao are also adopting," adding, "We also fully support non-degree KAIST management courses for education, but finding developers is like finding a needle in a haystack." He further added, "It would be helpful if the government establishes a 'developer talent specialized pool' system."

There was also a proposal to improve the military service special exemption system. Hwang Young-gyu, CEO of Alchera (a video recognition AI company), said, "Employees receiving military service special exemptions cannot apply flexible working hours and must work from 9 a.m. to 6 p.m., unlike other employees," pointing out, "The military service special exemption system is very helpful for startup recruitment difficulties, but aspects that do not fit the current era of flexible working hours need to be changed."