'Saneun Busanhaeng' Accelerates... Employees Resign in Droves [MZ Leaving Their Trusted Jobs]

Continued Exodus of KDB Employees
Loss of Competitive Edge in Treatment Compared to Commercial Banks
Ongoing Conflict Over Headquarters Relocation to Busan

"Until just 3 to 4 years ago, it was not common, but recently there has been a growing trend of young employees moving from national policy banks to commercial banks as well as small and medium-sized securities firms or capital companies. This is due to the relatively higher salary levels in private financial institutions, and on top of that, the issue of relocating some national policy banks to provincial areas has accelerated this trend."

The so-called "prestigious workplaces" such as Korea Development Bank and Export-Import Bank of Korea, which are national policy banks, are also experiencing an accelerated outflow of MZ generation (Millennials + Generation Z) employees. This is because the salary levels at private financial institutions like commercial banks have risen significantly, and the possibility of relocating national policy banks to provincial areas has emerged, starting with the Korea Development Bank's planned move of its headquarters to Busan.

According to data obtained by Asia Economy from the National Assembly on the 16th, among the 81 retirees (excluding retirement due to age, wage peak system application, and indefinite contract workers) from Korea Development Bank in 2023, 57 were in their 20s and 30s. This means about 70.4% of all retirees were concentrated in their 20s and 30s.

The scale of 20s and 30s retirees at Korea Development Bank is an unusual figure compared to the past 10 years. Looking at the number of retirees in their 20s and 30s by year, it fluctuated between 16 and 26 from 2013 to 2021 after recording 18 in 2013, but in 2022 and 2023, 57 retirees were recorded each year.

As a result, the total number of retirees also hit a 10-year high. The annual number of retirees at Korea Development Bank was maintained at 20 to 30 people every year from 2013 to 2021, except for 2016 (40 people), but it recorded 80 in 2022 and broke the record again within a year.

This trend, although smaller in scale, is also seen at the Export-Import Bank of Korea. The number of retirees in their 20s and 30s at the Export-Import Bank remained in single digits until 2019, except for 12 in 2016, but rose to double digits with 12 in 2020 and reached 13 in 2023, the highest in 10 years. The total number of retirees at the Export-Import Bank also increased to 18, the highest in 10 years, doubling compared to 9 in 2013.

The primary reason for this trend in both national policy banks, despite the difference in scale, is treatment issues. The comparative advantage has been offset as salary levels at private financial institutions like commercial banks have risen significantly. According to the Financial Supervisory Service's electronic disclosure system, the average salary (including fixed-term workers) of the four major commercial banks (KB Kookmin, Shinhan, Hana, Woori) increased by about 20%, from 93 million KRW in 2018 to 112.5 million KRW in 2022.

On the other hand, according to the public institution management information disclosure system Alio, the average regular employee salary at Korea Development Bank and Export-Import Bank showed little change during the same period: from 109.52 million KRW to 112.89 million KRW (Korea Development Bank), and from 102.4 million KRW to 106.15 million KRW (Export-Import Bank). Although direct comparison is difficult due to different standards, the comparative advantage of national policy banks, once called prestigious workplaces, is disappearing.

This trend is even more pronounced for new employees. The starting salaries for new hires at Korea Development Bank and Export-Import Bank were 51.3 million KRW and 45.7 million KRW respectively in 2022. Although starting salaries at commercial banks are not publicly disclosed, they are known to be around 60 million KRW, indicating a significant gap. Considering performance bonuses and various welfare systems, the perceived difference for employees in their 20s and 30s is even greater.

On top of that, the relocation of national policy banks to provincial areas to revitalize local regions is playing a decisive role in the outflow of employees in their 20s and 30s. Korea Development Bank is a representative case. Since President Yoon Suk-yeol took office in 2022, he has strongly pushed for the bank's move to Busan. This coincides with the time when the number of retirees in their 20s and 30s at Korea Development Bank exceeded 50 annually. The Korea Development Bank labor union is still conducting opposition campaigns against the Busan relocation.

A representative from a national policy bank said, "While salary issues are not insignificant, for employees in their 20s and 30s who still face practical issues such as marriage and childcare, relocating their entire living base to provincial areas is difficult to accept." He added, "There is a realistic movement within the bank to negotiate retaining essential functions such as the investment banking (IB) division in Seoul as much as possible, but it is understood that young employees are leading a strong opposition atmosphere."

[Image source=Yonhap News]

The problem is that the relocation theory, which can be called a decisive blow, is gaining more momentum. On the 13th, President Yoon Suk-yeol attended a public discussion on livelihood at Busan City Hall in Yeonje-gu, Busan, and emphasized, "We will promptly relocate Korea Development Bank to Busan and actively utilize it as a driving force to lead Busan as a global hub city." In regions such as Busan and Gangwon, the relocation theory for other remaining financial public institutions such as the Export-Import Bank, Financial Supervisory Service, and Bank of Korea is also expected to ignite.

A financial sector official said, "Treatment issues are emerging, and recently, with the push for Korea Development Bank's move to Busan, anxiety about relocation to provincial areas is spreading, deepening the outflow of the younger generation." He added, "Just a few years ago, small and medium-sized securities firms or capital companies were not considered as transfer targets, but now there are cases where employees move if the salary level matches, indicating a noticeable trend."