Tightening the Belt... KEPCO's Number of Employees Hits Record High This Year

The number of employees at Korea Electric Power Corporation (KEPCO), which has entered austerity management due to massive deficits, has increased by nearly 200 people up to the third quarter of this year, reaching an all-time high. KEPCO explained that this was the result of hiring new personnel in advance, considering natural decreases such as retirements scheduled by the end of this year, but some critics argue that this does not align with the government's policy direction to strengthen phased workforce reductions to restore the financial soundness of public institutions.

According to Alio, a public institution management information system, KEPCO's total number of employees as of the third quarter this year was 23,728, an increase of 188 compared to the previous year (23,540). This contrasts with last year when KEPCO's workforce increased by a total of 131 people.

KEPCO hired 406 new employees up to the third quarter this year. If it secures an additional 110 new university graduate-level personnel in the second half of the year by year-end, the total number of employees this year is expected to increase further. KEPCO plans to hire a total of 111 people in the second half, including 86 new university graduate-level personnel, 14 specialists, and 11 high school graduate-level personnel. This contrasts with most public power generation companies, which have reduced or postponed new hires in the second half.

The problem is that KEPCO has significantly increased its annual hiring to around 1,500 people during the five years of the Moon Jae-in administration, which has increased labor costs. KEPCO's labor costs rose 12.7% from 1.7238 trillion won in 2017 to 1.9431 trillion won last year. Including power generation subsidiaries, total labor costs during the same period increased 27.8% from 2.3087 trillion won to 2.9515 trillion won.

This is why KEPCO, which has entered an emergency management system forecasting the largest deficit in history this year, is criticized for neglecting workforce renewal. KEPCO secures about 2 trillion won in monthly operating expenses through borrowing. Most of these operating expenses are used to pay power generation companies for electricity production and labor costs.

Earlier, the government announced the ‘New Government Public Institution Innovation Guidelines’ to improve 350 public institutions including KEPCO, highlighting the reduction of public institution functions, organizational and workforce downsizing, and budget cuts as core measures. KEPCO has stated that it will improve its financial structure by selling non-core assets and promoting organizational and workforce adjustments.

Some argue that KEPCO feels burdened by workforce adjustments. An energy industry official explained, "Without restructuring, there is practically no clear way to reduce personnel other than reducing new headcount," adding, "On the other hand, there is concern that reducing personnel could lead to long-term reductions in labor costs, business promotion expenses, and other operating costs."

KEPCO responded, "We are proceeding with planned hiring considering natural decreases such as retirements this year, so the increase in personnel is not significant," and added, "We are doing our best to improve the financial structure through the sale of non-core assets and other measures."