[2023 Employment Outlook] Large Companies Struggle to Increase Hiring... Optimism for Mirae Mobility and Battery Sectors

Emphasizing the 'Future' but Hiring Slows
Battery Excluded from Expansion Race Due to USMCA Tariffs
Conservative Stance Clearly Evident

A job seeker participating in the '2022 Tourism Industry Job Fair' held on the 8th of last month at aT Center in Seocho-gu, Seoul is looking at the recruitment board. Photo by Jinhyung Kang aymsdream@

[Asia Economy Reporters Moon Chaeseok, Yoo Hyunseok, Choi Seoyoon] Large corporations, which lead the overall trend of the employment market, have taken a conservative approach to their hiring plans for next year. The prevailing stance is clear: "It is difficult to increase hiring, even if they do not reduce it." Only certain industries, such as electric vehicle battery manufacturers that must outcompete countries like China, have indicated plans to increase hiring alongside expanding facility investments. After President Yoon Suk-yeol’s inauguration in May, major companies simultaneously announced large-scale investment and hiring plans. However, the rosy employment outlook in May had faded by the end of the year.

According to a summary of industry opinions on the 16th, most IT, mobility, and battery companies such as Samsung Electronics, Hyundai Motor Company, and LG Energy Solution have not finalized their employment plans for next year. Most companies, including SK Hynix, which plans to reduce facility investments by as much as 50% compared to this year, stated that while they do not intend to reduce hiring, it is difficult to increase it.

Companies that increased their domestic workforce by more than 1,000 employees in the first half of this year compared to the end of last year are rare, except for Samsung Electronics (113,485 → 117,904 employees, an increase of 4,419) and LG Energy Solution (9,564 → 10,715 employees, an increase of 1,151). LG Energy Solution is a company that was spun off in December 2020 and is just over two years old. More personnel are needed for the organization to operate normally. During the same period, LG Electronics reduced its workforce by 1,707 employees, and Hyundai Motor Company by 1,309 employees.

As the domestic and international economies freeze up, large corporations are looking to reduce their employment scale next year. In the electronics industry, they are struggling due to a "double whammy" of falling prices for semiconductors and other components caused by decreased demand and increased inventory. The recession inevitably affects hiring policies. A representative from an electronics company said, "Next year, due to the expanded uncertainty in the business environment, the absolute scale of hiring may decrease," but added, "We plan to actively proceed with hiring in core areas such as AI and software."

Hyundai Motor Company changed its hiring method starting in 2019. For new hires, each business division directly recruits the personnel it needs through a "continuous open recruitment" system. Especially from this year, the company changed to posting recruitment announcements for each division on the first day of every odd month. This method is intended to prevent confusion among applicants by announcing the required personnel for each division all at once.

The hiring scale for next year is undecided. Given the many variables such as exchange rates and raw material prices, it is difficult to make a definitive prediction. However, looking at the trend over time, the hiring scale is slightly increasing. Unlike the electronics industry, the automotive industry is running with record-high performance. According to the sustainability reports of Hyundai Motor Company, Kia, and Hyundai Mobis, last year each company hired 7,530, 477, and 888 new employees respectively, totaling 8,895 new hires. This is an increase of 1,092 compared to 7,803 in 2020. Specifically, Hyundai Motor Company increased hiring by 434 compared to 2020. Hyundai Mobis hired 888 employees, nearly tripling the previous year's 298 hires. Kia also increased by 68 employees.

Particularly, more personnel are needed in future mobility sectors such as software, autonomous driving, urban air mobility (UAM), and robotics rather than in traditional internal combustion engine areas. An industry insider explained, "Existing organizations are mostly established, so the number of hires is small," adding, "Future mobility sectors are just being created and growing, so I understand that many hires are focused in those areas."

The battery industry says that due to tariff benefits in the United States, facility expansion is necessary, which inevitably requires increased hiring. The consensus is that this trend will continue at least until 2025, when the USMCA (United States-Mexico-Canada Agreement) comes into effect and tariff exemptions are reduced. From that point, tariff benefits will only apply to vehicles using more than 75% locally sourced parts, prompting global battery companies to dramatically increase facility investments in the U.S. Personnel are inevitably needed.

In the shipbuilding industry, subcontractor production workers face a labor shortage, while office and technical workers at the three major shipbuilders (Korea Shipbuilding & Offshore Engineering, Daewoo Shipbuilding & Marine Engineering, Samsung Heavy Industries) face a job-seeker shortage. This is a typical "dual structure" with a pronounced asymmetric labor gap. The avoidance of subcontracted production jobs, often called "3D" (difficult, dangerous, dirty), persists, while demand for regular technical workers developing advanced equipment such as autonomous ships, dubbed the "Tesla of the sea," at the three major shipbuilders remains high.

The business community, regardless of industry, emphasizes the need for groundbreaking policy support amid growing management uncertainties caused by the "three highs" (surging prices, interest rates, and exchange rates). Choo Kwang-ho, head of the Economic Headquarters at the Federation of Korean Industries, stated, "Recently, the rapid rise in raw material prices, the three highs phenomenon, and export declines have overlapped, increasing the possibility of an economic recession, which could negatively impact the employment market," adding, "If the government and National Assembly create a 'business-friendly environment' through active policy responses such as regulatory reform, fostering new industries, and easing tax burdens, it will greatly help companies to create jobs more actively."