CXO Research Institute, Employment Status Survey 2010~2023
Domestic and International Staff Numbers from 300,000s to 260,000~270,000s
Labor Costs Increased Threefold from 13 Trillion to 38 Trillion Won
Amid a decline in Samsung Electronics' employment over the past decade, labor costs have increased, according to a recent study. While the total workforce decreased from a peak of around 300,000 to the 200,000 range, labor costs nearly tripled over the same period. The proportion of employees aged 40 and above surpassed that of those aged 20 and below, and executives (including board members) accounted for about 35% of the total staff. Experts warn that if workforce aging continues, organizational and business dynamism will decline, and labor costs will rise, causing a 'double burden.'
According to the '2010?2023 Samsung Electronics Employment Workforce Change Multidimensional Analysis' report released on the 26th by CXO Research Institute, a corporate analysis specialist, the total number of employees domestically and internationally increased from 190,464 in 2010 to a record high of 325,677 in 2015, then decreased to 267,860 last year. The workforce remained in the 300,000 range from 2014 to 2018, then stayed between 260,000 and 270,000 for four consecutive years after 2020. The lowest number since 2015 was 266,673 in 2021. The employment reduction rate during this period was 18.1%, meaning that one in five employees left Samsung Electronics over six years.
Domestic employment increased, but overseas employment declined. Overseas personnel remained in the 200,000 range from 2014 to 2018 but stayed in the 100,000 range for six consecutive years after 2019. There was a continuous decline for eight years since 2017. After falling below 200,000 in 2019 (185,380), overseas staff numbers dropped to 161,607 in 2020, 155,547 in 2021, 152,445 in 2022, and 147,104 last year.
Domestic employment increased for nine consecutive years since 2018. It surpassed 100,000 in 2019 (102,059) and reached a record high of 120,756 last year. The gap between domestic and overseas workforce sizes narrowed from 131,878 in 2015 to 26,348 last year. The proportion of Samsung Electronics' overseas employees decreased from 70.2% in 2015 to 54.9%, while the domestic employee proportion rose from 29.8% to 45.1% during the same period.
From 2021 to last year, the average overseas workforce decline rate was about 3%. It was 3.7% (-6,060) in 2021, 2% (-3,102) in 2022, and 3.5% (-5,341) last year. If this trend continues, about 3,000 to 4,000 overseas employees may leave this year as well.
The 'young blood' has also decreased. Among Samsung Electronics employees worldwide, the proportion of those aged 20 and below peaked at 58.9% in 2015. It has declined for eight consecutive years since then, falling to 27.1% last year. During the same period, the proportion of employees in their 30s increased continuously for eight years, rising from 28.5% in 2015 to 42.5% last year. Employees aged 40 and above have grown for nine consecutive years since 2014, expanding from 12.3% in 2014 to 30.4% last year.
The number of employees aged 20 and below was highest in 2015 at 191,986. It has decreased for eight consecutive years, falling below 100,000 to 99,823 in 2020. Since 2020, the number of employees in their 30s (106,236) has surpassed those aged 20 and below. The 30s age group first entered the 100,000 range in 2017 (100,856) and has steadily increased since. Last year, it reached a record high of 113,874. The 40 and above age group has increased every year since 2010, growing approximately fourfold from 22,313 in 2010 to 81,461 last year. Notably, last year marked the first time the number of employees aged 40 and above (72,525) surpassed those aged 20 and below.
As the age distribution of employees changed, the composition by rank, such as staff and executives, also shifted. General staff accounted for over 80% from 2010 to 2017 but dropped to the 60% range by 2021. The proportion of executives and above increased from the 10% range in 2010?2017 to the 30% range in 2021. Last year, the proportion of executives and above rose to 35%.
Although the workforce size decreased, labor costs increased. Labor costs rose about threefold from 13.5 trillion KRW in 2010 to 38 trillion KRW last year. There was no decrease during the investigation period. Especially since 2017, despite a sharp decline in employment size, labor costs continued to rise. The ratio of labor costs to sales also increased. It was in the single digits from 2010 to 2013, 10?11% from 2014 to 2018, and 12?13% from 2019 to 2022. Last year, it surged to 14.7%. Even though both sales and operating profit declined compared to the previous year, labor costs increased last year.
The increase in labor cost per employee (including salary, retirement benefits, and welfare expenses) was also evident. Except for 2011 (65.39 million KRW), labor costs per employee remained in the 70 million KRW range from 2010 to 2016. It rose to the 80 million KRW range in 2017 (84.48 million KRW), surpassed 90 million KRW in 2019 (97.75 million KRW), and exceeded 100 million KRW starting in 2020 (115.69 million KRW). The increase accelerated in 2021 (129.74 million KRW), 2022 (139.06 million KRW), and last year (141.86 million KRW).
Labor costs for the first half of this year (January to June) were about 20.3 trillion KRW, an increase of approximately 500 billion KRW compared to the same period last year. The growth rate was about 2.5%. The total labor cost for this year is expected to be around 39 to 41 trillion KRW.
Oh Il-seon, director of CXO Research Institute, said, "If there is no significant change in the workforce structure with an increasing number of middle-aged employees aged 40 and above and executives, Samsung Electronics' organizational dynamism and vitality will further decline over the next 5 to 7 years, and the labor cost burden will increase. It is urgent to establish a multifaceted and in-depth workforce management and operation strategy."
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