[Exclusive] Revising Quotas First... Gradual Transition to Regular Employment System

Long-term Task for Continuous Recruitment System
Pilot Implementation in Shipbuilding and Root Industries

The government is considering abolishing the quota system, in which the government determines the scale of foreign workforce by industry as a mid- to long-term task, and transitioning to a system of continuous hiring of foreign workers. In the case of the shipbuilding industry and the root industry, where the labor shortage is severe, the government is considering a pilot implementation of the continuous hiring system. This is because the current foreign employment system is judged to be unable to adequately meet the labor demand on site.

On the 11th, a notice regarding the employment of foreign workers was posted at the Western Branch of the Ministry of Employment and Labor in Mapo-gu, Seoul. Photo by Jo Yongjun

According to related ministries on the 11th, the government is reviewing a mid- to long-term plan to gradually abolish the current foreign workforce quota system and transition to a continuous hiring system where each company autonomously hires foreigners within a set limit. While gradually relaxing the current system in which the government decides and allocates the employment scale by industry and sector, the plan is to transition to a company-specific continuous hiring system in the mid to long term.

A government official said, "The current quota system cannot be abolished immediately, but as it stands, it is difficult to supply labor according to on-site demand," adding, "We see the continuous hiring system as a mid- to long-term task to transition to a flexible foreign labor introduction system." However, he explained, "Since job issues in various regions have recently become serious, the introduction timing may be advanced depending on the government's will."

The current foreign employment system operates under a limited quota system according to the Employment Permit System. At the end of each year, the Ministry of Employment and Labor identifies the required workforce by industry and determines the quota size for non-professional workers (E-9), and each company fills its workforce accordingly. A government official pointed out, "Under the Employment Permit System, which uses the quota system as a basic framework, there is a problem on site where companies find it difficult to secure appropriate personnel when needed." He added, "Especially at the end and beginning of the year, visa work and administrative procedures are concentrated, causing delays in administrative processes and entry issues." The continuous hiring system essentially allows companies to autonomously hire foreigners continuously within a set limit (20% of domestic workers). The Human Resources Development Service of Korea is expected to provide and mediate a pool of foreign workers to companies.

Pilot Operation Begins in Shipbuilding and Root Industries with Severe Labor Shortages... Gradual Expansion

First, the government is reviewing a plan to pilot the continuous hiring system starting with the shipbuilding and root industries, where labor shortages are severe, and to gradually expand it by reflecting operational performance. In these two sectors, the shortage of both non-professional workers (E-9) and skilled workers (E-7) is severe, and the industry’s demand for restructuring the foreign workforce system continues. Since last year, the government has made significant changes such as establishing a dedicated specialized E-9 quota system for shipbuilding and allocating 5,000 quotas due to the severe labor shortage in shipbuilding. It is also known that the government, centered on the Ministry of Trade, Industry and Energy and other related ministries, has begun formulating countermeasures to attract workforce to the shipbuilding industry.

The reason the government intends to pilot the transition to a continuous hiring system first in the shipbuilding industry is that while the domestic shipbuilding industry has entered a boom period again, the labor shortage problem is severe. In the first quarter of this year, the domestic shipbuilding industry accounted for 40% of the global ship market (USD 9.4 billion, based on order amount), achieving the world’s number one order record. The problem is the labor shortage. The shipbuilding industry estimates a shortage of 14,000 workers by the end of this year.

A government official said, "This is an issue that related ministries are considering together," adding, "We believe that only by flexibly loosening the tightly blocked quota system quarterly and by industry can the job shortage problem be solved." However, he also said, "Since labor is needed in all industries, if each company autonomously conducts continuous hiring, there could be side effects such as foreign jobs concentrating in only some industries, which all ministries are carefully considering."