[K Population Strategy] A Miracle Blossoms in Population Decline Areas... "Settlement in Gangwon-do with a Childcare-First Culture"

(29) Nami Island Struggles with Labor Shortage, Establishes Workplace Daycare Center
Employees Promote a Virtuous Cycle of Childbirth and Childcare
Due to Low Birthrate and Regional Population Decline... Companies Also Concentrate in the Capital Area

Editor's NoteThe key to solving South Korea's population problem lies within companies. A workplace atmosphere that evaluates employees based on their work regardless of gender and a family-friendly culture are crucial to addressing the K-population issue. Although low birth rates result from complex factors, it is important to ensure that workplace burdens do not become obstacles that make people hesitate to have children. Asia Economy visited companies leading family-friendly policies to identify the factors that enabled stable implementation of these systems and plans to explore various solutions with companies facing practical challenges. Through this, we aim to encourage change starting from companies and analyze the government's role in making this possible. We listen to voices emphasizing that company culture and atmosphere that reduce psychological burdens are more important than financial support, and present alternatives from diverse perspectives.

On the 26th of last month, Iroha (7) greeted her father, Lee Cheong-won (42, male), and mother, Jang Ju-young (39, female), with smiles as she arrived at the workplace daycare center in Namiseom, Gapyeong-gun, Gyeonggi Province. / Photo by Jo Yong-jun jun21@

On a foggy morning by the Bukhangang River, a black vehicle carefully drove along the icy road. The vehicle stopped in front of the Namiseom daycare center located in Gapyeong-gun, Gyeonggi Province, after climbing a hill. A couple got out of the car with their sleepy, fussy little boy. The couple opened the door and handed the child’s hand to the daycare teacher, but the boy returned to his mother’s arms. "Roha, you have to have fun playing today too, okay?" Roha’s mother, Jang Ju-young (39, female), smiled as she gently stroked Iroha’s (7) head and cheek. Father Lee Cheong-won (42, male) also smiled and waved at Roha. Roha stayed a little longer in his mother’s arms before finally taking the teacher’s hand. When Roha made eye contact with the teacher, he smiled shyly and went up to the second-floor play area. After leaving their child at the daycare, the couple headed to the nearby Namiseom ferry dock and boarded the 8:30 a.m. ferry. This is the commuting routine of a couple working together at Namiseom Co., Ltd.

The couple’s day begins at 6:30 a.m. They wake up and prepare a simple breakfast while waking their eldest daughter, who is in elementary school, and Roha. Although Roha is a bit reluctant to get up, he soon gets up and eats breakfast. After breakfast, Roha is driven to the daycare by car. Since their home is only five minutes by car from both the workplace and the daycare, they save a lot of time here. The couple even enjoys a leisurely cup of coffee in the morning. This start to the day became possible after they moved to Gapyeong-gun three years ago. Jang said, "Other families say every morning is a battle to feed the kids and send them to daycare, but we are relatively relaxed. Moving to Gapyeong-gun gave us more time and family happiness."

Daycare Open on Weekends...Young Couple Moving to Gapyeong

On the 26th of last month, children were playing at the company daycare center of Namiseom Co., Ltd. located in Gapyeong-gun, Gyeonggi Province. / Photo by Jo Yongjun jun21@

The Namiseom daycare, operating since 2021, cares for 20 children under the supervision of teachers. The children play in a two-story building with a total floor area of 770.14㎡, equipped with an indoor playground. It was built large from the start with a target capacity of 60 children. Thanks to this, there is space where 10 adult men could lie down while 3 to 4 children run around. The daycare is not only for children of Namiseom employees. Since last year, any resident of Gapyeong-gun can send their children to Namiseom daycare. Among the 20 children, six are children of Gapyeong-gun residents unrelated to Namiseom. Tak Jae-yoon, director of Namiseom daycare, said, "Parents who run pensions or restaurants in Gapyeong-gun sometimes find it difficult to take care of their children on weekends. Namiseom daycare operates on weekends, so parents who have no time come to leave their children."

Namiseom is not a business subject to the obligation to establish a workplace daycare center. According to the Infant Care Act, workplaces with 300 or more regular female workers or 500 or more employees must establish a workplace daycare or contract with a daycare center. Currently, Namiseom has 149 total employees, with only 42 female employees. However, facing difficulties in hiring young employees, the company decided to build a daycare. First, there are few people in Gapyeong-gun. Gapyeong-gun has been designated as a depopulation area due to a rapid decrease in young population and a sharp increase in elderly population. Moreover, employees at Namiseom, a tourist destination, must work weekends, so without special welfare benefits, it was impossible to attract the younger generation who value work-life balance. The company invested a total of 4 billion KRW, including 2 billion KRW in government subsidies and 2 billion KRW of company funds, and bears an annual cost of 200 million KRW for the daycare.

On the 26th of last month, children are playing with toys at the company daycare center of Namiseom Co., Ltd. located in Gapyeong-gun, Gyeonggi Province.
Photo by Jo Yongjun jun21@

The results appeared immediately. In 2020, the number of employees in their 20s, 30s, and 40s was 79, but last year it increased significantly to 96. The proportion of employees in their 20s, 30s, and 40s also rose from 57% to 65%. Min Kyung-hyuk, CEO of Namiseom, said, "People drive the tourism industry, but it is not easy to find employees in Gapyeong-gun compared to big cities. Namiseom is not a large company, so we cannot drastically raise salaries. We decided to build a workplace daycare thinking about long-term benefits employees can receive. The benefit employees get is time."

Employees raising children at Namiseom unanimously said they chose this workplace because of the daycare that gives them time. Jang said she once left Namiseom, her first workplace about ten years ago, to work at another hotel. But after getting married and preparing to have children, she saw the reality faced by female seniors. Many quit their jobs or gave up having children because they had no time to care for them. Eventually, Jang returned to Namiseom, where the pay is relatively low. She even moved near Namiseom to save time. Namiseom welcomed her return and move, saying it was better to have employees with prior experience. Jang emphasized, "I needed a job where I could work without worrying about my career even if I had children. From a parent's perspective, what is needed for childcare is not money but time."

Declining Birth Rates and Disappearing Local Populations...Even Companies Moving to the Capital Area

Along with the low birth rate phenomenon, local populations are disappearing. In October 2021, the Ministry of the Interior and Safety designated 89 out of 229 cities, counties, and districts nationwide as depopulation areas. These areas were selected based on comprehensive indicators such as average annual population change rate, youth net migration rate, aging ratio, and crude birth rate. In addition to Gapyeong-gun mentioned earlier, metropolitan cities such as Dong-gu, Seo-gu, and Yeongdo-gu in Busan, and Nam-gu and Seo-gu in Daegu were also included. Except for Andong and Yeongcheon in North Gyeongsang Province, none of these areas had more than 500 births in 2022. Only 20 newborns were born in Ulleung-gun, North Gyeongsang Province, in 2022.

Companies inevitably concentrate in the populous capital area. According to the Ministry of SMEs and Startups, as of 2021, out of 7,723,867 companies nationwide, 4,024,987 (52.11%) are located in the capital area including Seoul, Gyeonggi, and Incheon. The number of workers in the capital area was 13,608,09 out of 22,865,491 nationwide, accounting for about 59.5%. Professor Cho Young-tae of Seoul National University Graduate School of Public Health said, "Companies naturally head to the capital area to find young talent. The rest of the young people also fall into a vicious cycle of moving to the capital area to find jobs."

The Thorny Path of Establishing and Operating Namiseom Daycare...“Childcare-Centered Culture Comes First”

Min Kyung-hyuk, CEO of Nami Island.
Photo by Jo Yong-jun jun21@

"Establishing a workplace daycare was not easy regardless of the company’s will." Lee Cheong-won, head of Namiseom’s management planning division who led the daycare establishment, faced opposition from various quarters during the process. Opposition from local private daycare centers was the most difficult. Gapyeong-gun already has few children, and private daycare centers feared losing students to a well-funded company daycare. Gapyeong-gun initially expressed reluctance to the establishment of Namiseom daycare considering private daycare opposition. There was also internal opposition. Employees in their 20s without children complained that the welfare benefit was hard to relate to. Lee said, "It is true that there was passive local government and some employee opposition, but eventually everyone agreed on the virtuous cycle the workplace daycare would bring. Employees who complained in their 20s feel relieved to have a workplace daycare as they prepare for marriage and childbirth."

There were difficulties in operation as well. The spread of COVID-19 restricted foreign entry, virtually decimating domestic tourism. Namiseom was not spared. Sales dropped from 32.2 billion KRW in 2019 to 13.4 billion KRW in 2020. Nevertheless, the daycare construction and operation did not stop. CEO Min smiled and said, "Honestly, we did not expect COVID-19 to last this long and kept pushing forward." He added, "Investment in employees, that is, people, cannot be done on a yearly basis. The workplace daycare was a long-term investment in people. I think it is one of the welfare benefits that can be reduced but must not be cut."

Ahn Ae-rim (43, female) from the HR team emphasized that without a company culture prioritizing childcare, establishing the daycare would have been difficult. The atmosphere where employees can freely use parental leave, half-days off, and flexible work schedules for their children was already in place, enabling the daycare project to continue. Ahn said, "When someone takes a half-day off because their child is sick, everyone sincerely worries and tells them to focus on their child instead of work. It is a workplace that understands the importance of family. In fact, workplace daycare is not the answer to all childcare problems. Small considerations at work are necessary."

The ‘childcare cooperative’ among employees at Namiseom exemplifies the childcare-first culture. If there is no place to urgently leave elementary school children on weekends, they entrust them to other employees. The children are often friends, making this possible. The oldest child looks after the younger ones. Seven families, including Han Jae-sung (42, male), who works in the pottery craft workshop, maintain close relationships not only through childcare cooperation but also by gathering for meals at Christmas or year-end. Han said, "When the children see me working on crafts, they call me ‘uncle’ and acknowledge me. It makes me proud to see the children get along well and respect each other’s parents."

With a company culture that prioritizes children, employees actively encourage childbirth and childcare. Currently, Ahn plays the role of a ‘childbirth evangelist,’ actively encouraging couples within the company to have children. When employees hesitate about having children, she approaches them to explain the happiness children bring. Ahn said, "Of course, having children is hard. You cannot shop freely as before childbirth, and you suffer from sleep deprivation while soothing a crying child. But the happiness children bring is incomparable. It is happiness you should not give up for work." She added, "I hope others also understand that happiness."

Ahn emphasized the virtuous cycle brought by a company culture that values childcare. She said, "I have received a lot from the company and colleagues while raising my child. I want to repay this gratitude to those around me whenever I have the chance."

Special Coverage Team 'K-Population Strategy - Gender Equality is the Answer'

Reporters: Kim Yuri, Lee Hyun-joo, Jung Hyun-jin, Boo Ae-ri, Gong Byung-seon, Park Joon-i, Song Seung-seop
Editor: Kim Pil-su, Economic and Financial Editor