More Than 2,000 Employees Apply for Voluntary Retirement at the Five Major Banks
Shinhan Bank Doubles Number of Applicants by Expanding Eligibility to Employees in Their 30s
This year, more than 2,000 employees from the five major commercial banks (KB Kookmin, Shinhan, Hana, Woori, and NH Nonghyup) have applied for voluntary retirement. Compared to internet banks, their productivity per person is significantly lower, and with the acceleration of digital transformation leading to branch closures, workforce downsizing is progressing rapidly. In some banks, the scope of voluntary retirement candidates has expanded to include employees in their 30s, marking a complete shift from the past when voluntary retirement was mainly targeted at employees under the wage peak system.
According to the financial sector on the 21st, it is estimated that over 2,000 employees will leave the five major banks this year. First, KB Kookmin Bank received voluntary retirement applications from December 26 to 31 last year, resulting in 647 employees leaving the company as of the 17th of this month. This number is similar to last year's 674 but is the highest compared to other banks, where the number of applicants ranged from 400 to 500. KB Kookmin Bank expanded the eligibility criteria from those born in 1972 to those born in 1974 and increased the special retirement pay from 30 months to 31 months. Notably, middle managers in their 40s and 50s were the largest group of applicants.
Shinhan Bank and Woori Bank saw about a twofold increase in voluntary retirement applicants compared to the previous year. Shinhan Bank confirmed 541 voluntary retirements this year. By extending the eligibility to employees born in 1986, in their late 30s, the number of voluntary retirees more than doubled from 234 last year. Woori Bank, which accepted applications from the 2nd to the 7th of this month, also saw the number of applicants rise to around 500, a significant increase from the previous year. In 2024, 362 employees left Woori Bank.
NH Nonghyup Bank had 391 employees leave as of December 31 last year, a slight increase from 372 the previous year. The target group was employees aged 40 to 56 with more than 10 years of service, and retirement pay ranged from 20 to 28 months' salary.
Hana Bank accepted special early retirement applications from the 2nd to the 6th of this month, with employees leaving as of the 31st. Although Hana Bank did not disclose the scale, it is expected to be similar to previous years. In 2023, 339 employees left Hana Bank, and in 2024, 325 employees departed.
Last year, commercial banks posted record-high earnings, but the scale of voluntary retirement appears to have increased compared to the previous year. The confirmed number of voluntary retirements already exceeds 2,000, expected to be about 20% higher than the 1,967 voluntary retirees from the five major banks last year.
The increase in voluntary retirement is attributed to the continuous reduction in the number of bank branches due to non-face-to-face and digital transformation, which reduces the necessary workforce. Additionally, the productivity per employee at internet banks, which have emerged as strong competitors to commercial banks, is about twice that of commercial banks, influencing the banks' organizational slimming. The profit per employee at the five major domestic commercial banks was 255 million KRW (as of Q3 2024), while the average for the three internet banks during the same period was 562 million KRW.
A representative from a commercial bank said, "The average age of those applying for voluntary retirement is not significantly different from previous years, but unusually, applications from employees in their late 30s to early 40s have increased." He added, "The concept of a 'lifetime job' has disappeared, and due to criticism of banks as 'interest businesses,' banks cannot significantly increase retirement pay, so there is a mood of leaving while they can get a little more."
Meanwhile, voluntary retirees from major commercial banks last year received special retirement pay in the high 300 million to 400 million KRW range. According to the 2023 management status disclosure reports by bank, KB Kookmin Bank employees received an average voluntary retirement pay of 381 million KRW. Shinhan Bank paid an average of 307 million KRW per person, while Hana Bank and Woori Bank paid 409 million KRW and 402 million KRW, respectively. Considering the basic retirement pay of around 100 million KRW, the average total was about 500 million KRW. It is also reported that some employees received retirement pay exceeding 1 billion KRW.
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