Foreign Workers Earning More Than Koreans... Surprised by How Much They Make

Korea Federation of SMEs, Survey on Employment Status of Foreign Workers
Top Difficulty: 'Korean Language'

The average labor cost, including accommodation expenses, for foreign workers employed by small and medium-sized enterprises (SMEs) was found to be approximately 3.02 million won. The majority of small manufacturing companies employing foreign workers rely on foreign labor due to difficulties in hiring domestic workers.

The Korea Federation of SMEs announced on the 25th that the average labor cost per foreign worker, including lodging and meal expenses (386,000 won), was calculated to be 3,024,000 won based on the results of a "Comprehensive Survey on Difficulties Related to Foreign Workforce Employment" conducted on 1,225 small manufacturing companies employing foreign workers.

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Foreign workers received an average base salary of 2.09 million won, overtime pay of 425,000 won, bonuses of 41,000 won, and incidental expenses of 82,000 won each. Companies responding that the labor cost level of foreign workers, including lodging and meal expenses, was higher than that of domestic workers accounted for 57.7% of the total.

The surveyed companies responded that foreign workers’ productivity was low, requiring a probation period. The necessary probation period was found to be four months.

The biggest difficulties in managing foreign workers (multiple responses allowed) were "communication (low Korean language proficiency)" at 66.7%, followed by "frequent requests for business operator changes" at 49.3%.

The most important factors SMEs consider when hiring foreign workers (combined rankings 1 to 3) were the country of origin (76.7%), Korean language ability (70.4%), and physical condition (53.4%), in that order.

SMEs indicated a desire to maintain the current scale of foreign worker introduction while extending their stay period.

Regarding the scale of foreign workforce introduction for the next year, 65.2% responded that it should be maintained at this year’s level. Concerning whether the maximum stay period for foreign workers (up to 9 years and 8 months) is appropriate, the highest response (33.1%) was that an additional extension of more than five years is necessary.

SMEs identified the current improvement tasks for the Employment Permit System (combined rankings 1 to 3) as "extension of foreign workers’ stay period" (54.6%), "establishment of sanctions for unfaithful foreign workers" (50.5%), and "simplification of employment procedures" (42.4%).

Lee Myung-ro, Head of the Human Resources Policy Division at the Korea Federation of SMEs, emphasized, "To improve the low productivity of foreign workers, education to enhance Korean communication skills before entry is essential," adding, "It is time to strengthen vocational training such as basic skills."