KEPCO to Hire Despite Deficit... '600+α'

[Asia Economy Sejong=Reporter Dongwoo Lee] Korea Electric Power Corporation (KEPCO), which has embarked on austerity management due to massive deficits, plans to hire at least 600 new employees this year. Considering the government's recent policy to reduce public institution personnel, this hiring scale is evaluated as not insignificant compared to expectations.

According to the energy industry on the 11th, KEPCO is scheduled to announce its hiring plan by the end of this month, including new college graduate-level personnel, specialists, high school graduates, and experienced workers. The hiring scale is confirmed to be around 600 to a maximum of 700. This represents an increase of at least about 120 compared to the total new hires (482) KEPCO made last year, and the Ministry of Economy and Finance is currently coordinating the proportion of personnel reinforcement.

The industry is surprised that KEPCO has expanded its new hiring scale this year. Previously, the government decided to reduce the workforce of major public institutions by about 12,000 over up to three years to strengthen fiscal soundness. Accordingly, KEPCO must gradually reduce a total of 496 personnel starting this year.

KEPCO was designated as a target for the government's public institution workforce reduction because it had steadily increased its personnel despite a deficit reaching 30 trillion won last year. According to KEPCO, as of the end of last year, the total number of employees was 23,728, a 7.3% increase compared to 2017 (22,114), the early period of the Moon Jae-in administration. This was due to a significant increase in public sector personnel as part of the previous administration's job creation efforts.

Even when KEPCO recorded operating losses of 208 billion won and 1.2765 trillion won in 2018 and 2019 respectively, it steadily increased its total workforce by hiring an average of more than 1,700 new employees. KEPCO’s total number of employees was 22,731 in 2018, an increase of 606, and 23,353 in 2019, an increase of 622. Labor costs rose by 12.7%, from a total of 1.7238 trillion won in 2017 to 1.9431 trillion won as of 2021.

Some have pointed out that KEPCO’s adjustment plan is insufficient compared to its previous trend of workforce expansion. The financial industry expects KEPCO to record a deficit of about 4.739 trillion won in the first quarter of this year despite the unprecedented electricity rate increase of 13.1 won per 1 kWh (kilowatt-hour). The expected cumulative deficit for this year is about 11.14 trillion won, indicating that KEPCO needs to tighten its belt further to secure fiscal soundness.

However, KEPCO states that this year’s hiring scale is at least to secure minimum personnel considering retirees and others. A KEPCO official said, "We are reviewing the scale of new hires considering natural attrition such as resignations," and added, "It will be a level that sufficiently meets the government's requested phased workforce reduction plan."