"Labor Shortage" Cries Everywhere on Site... Surge in Calls to 'Ease Regulations'

"More Than Half of Companies Complain of Labor Shortage"

There is a growing demand from the business community across various industrial sites to ease restrictions on the employment of foreign workers. This is a call to consider the reality of the domestic labor market, which has become increasingly difficult to sustain with only native workers. More than half of the companies employing foreign workers are reporting labor shortages. In particular, the supply of non-professional workers (holders of E-9 visas) has stagnated during the COVID-19 pandemic, further intensifying recruitment difficulties for companies.

According to the 'Status and Improvement Measures of Foreign Workforce Utilization' survey conducted by the Korea Chamber of Commerce and Industry on the 11th, targeting 502 companies currently employing foreign workers, more than half of the companies (57.2%) responded that the current employment of foreign workers (E-9) is insufficient.

Regarding the scale of foreign workforce introduction for next year, the largest portion of companies (46.8%) stated that it should be expanded beyond this year's introduction scale of 110,000. To replenish the reduced number of foreign workers due to COVID-19, the government decided to set the introduction scale of non-professional foreign worker employment visas at a record high of 110,000 this year. According to the Ministry of Justice, the number of foreign workers entering through employment visas from 2020 to July last year was 34,065, about 39% of the 51,365 in 2019.

The most cited reason for the shortage of foreign-employed labor was 'additional vacancies caused by native workers leaving their jobs' (41.5%). This was followed by 'inability to hire more due to legal limits on allowed employment numbers' (20.2%), 'reasons such as foreign workers leaving workplaces' (17.8%), and 'difficulty in hiring foreign workers suitable for the job' (16.4%). The Korea Chamber of Commerce and Industry has compiled these voices and submitted a 'Proposal for Improvement of Foreign Worker Employment and Utilization System' to the government.

The trade sector also expressed similar difficulties. In the 'Report on the Utilization Status and Implications of Foreign Workers in the Trade Sector,' the Korea International Trade Association stated that more than half of the trade industry (56.8%) is experiencing difficulties in current workforce supply. Lee Sang-taek, a foreign worker specialist at the Pocheon Chamber of Commerce and Industry, said, “The aging of on-site workers is worsening, and the younger generation continues to avoid employment, so the labor shortage problem persists,” adding, “To solve the manpower shortage in small and medium-sized enterprises, the number of foreign workers entering from overseas must be at least the same scale as this year for the next few years.”

Lim Young-tae, head of the Employment Policy Team at the Korea Employers Federation, emphasized, “The manpower shortage is particularly severe in small and medium-sized manufacturing companies,” and added, “To alleviate the severe labor shortage in small and medium-sized manufacturing companies, including the automobile parts and shipbuilding industries, additional measures such as expanding the scale of foreign worker introduction or extending their stay period are necessary.”

In response to these concerns, the government has also begun to improve the system. Bang Ki-seon, the 1st Vice Minister of Strategy and Finance, stated at the job task force (TF) meeting on the 10th, “With the working-age population expected to decrease by about 3.82 million by 2030, supply constraints in the labor market are intensifying,” and added, “The government is actively working to attract foreign workers to alleviate supply constraints in the labor market.” On the 12th of last month, Deputy Prime Minister and Minister of Economy and Finance Choo Kyung-ho also emphasized at the emergency economic ministers' meeting and export investment countermeasures meeting, “We will actively promote resolving job mismatches through the utilization of foreign workers.”