[Saving SMEs through Labor Flexibility]⑤ "SME Jobs?The Backbone of Industry?Must Be Protected Through Flexibility and Autonomy"

87.0% of Companies Say "Exceptions to Working Hours Regulations Are Needed"
Experts Emphasize the Importance of Autonomous Labor-Management Agreements and Choice

Editor's NoteLabor regulations such as the 52-hour workweek, which were introduced with the aim of creating advanced working conditions, continue to weigh heavily on both companies and workers across various industrial sites. The problem is becoming increasingly recognized, particularly because small and medium-sized enterprises (SMEs) suffering from a structured economic downturn are facing severe management difficulties and labor shortages. Meanwhile, as the Lee Jaemyung administration accelerates its push for the introduction of a '4.5-day workweek without wage reduction,' anxiety is mounting among SMEs, which are both the backbone of the economy and industry as well as its most vulnerable link. Calls are growing for an urgent reevaluation of rigid, one-size-fits-all regulations that disproportionately burden smaller and less-resourced firms, in favor of a labor culture based on flexibility and autonomy. Asia Economy explores solutions based on the realities faced by SMEs.

[Saving SMEs through Labor Flexibility]① Even 'Centennial Stores' Can't Withstand Labor Regulations

[Saving SMEs through Labor Flexibility]② Rigid Labor Regulations Actually Undermine 'Work-Life Balance'

[Saving SMEs through Labor Flexibility]③ Criminal Penalties Even When Labor and Management Agree?No Other Country Does This

[Saving SMEs through Labor Flexibility]④ The Additional Burden of the 4.5-Day Workweek Could Only Widen the Gap Between Large Corporations and SMEs

[Saving SMEs through Labor Flexibility]⑤ "SME Jobs?The Backbone of Industry?Must Be Protected Through Flexibility and Autonomy"

From the 52-hour workweek to the 4.5-day workweek currently under active discussion by the Lee Jaemyung administration, the pressure of working hours regulations is intensifying. Amid this, both SME representatives and experts are increasingly calling for a swift departure from uniform approaches and for institutional frameworks that more fully reflect on-the-ground realities. Persistent calls for the urgent introduction of exceptions to the current 52-hour workweek, and for greater flexibility in working hours, reflect the backlash caused by these rigid regulations.

According to the relevant industry on the 24th, a recent survey by the Korea Venture Business Association on the "Status and Challenges of the 52-Hour Workweek in Venture Companies" found that 87.0% of all companies believe exceptions to working hours regulations are necessary. Of these, 60.7% said such exceptions are needed for specific projects, while 26.3% responded that they are needed on an ongoing basis. Regarding plans to utilize such exceptions if introduced, 57.7% said they would use them under certain conditions, and 24.7% said they would use them immediately, meaning a total of 82.4% expressed a desire for their implementation.

◆ Working Hours Regulations Directly Linked to Global Competitiveness = This is also directly tied to the global competitiveness of domestic companies. For example, a domestic artificial intelligence (AI) solutions company that recently began expanding into overseas markets, particularly Japan and Vietnam, has run up against the barrier of the 52-hour workweek. Time differences by country, real-time collaboration systems with local partners, and differing deadlines in each country all conflict with domestic regulations.

The company's technology manager said, "For overseas business, due to time differences and other factors, working hours are more than 1.5 times longer than when working only in Korea. In the AI field, our competitors are all foreign companies that are not subject to regulations like the 52-hour workweek, so they can focus solely on results. Even in countries with strong AI initiatives, this is how work is done. If Korean companies are restricted to 52 hours, it will sap our growth momentum." Kim Daeil, professor of economics at Seoul National University, said, "In the ICT (information and communications technology) sector, venture startups are engaged in development races where every second counts in the global market, so the 52-hour workweek is an excessive regulation compared to overseas cases. It is important to free companies from such regulatory shackles."

Industry representatives and experts emphasize that, rather than binding companies strictly on a weekly basis as is currently the case, it is necessary to actively consider systems such as a "total working hours system," which would allow flexible adjustment of working hours within a set period such as a month, quarter, or year. In the Korea Venture Business Association survey, 68.4% of respondents said they would use such a system if introduced.

By industry, manufacturing showed a higher demand at 70.3%, compared to 64.7% for the service sector. Among all companies that would use such a system, roughly half (49.2%) expected that concentrating labor on major R&D or project deadlines would improve productivity.

◆ The Importance of Autonomous Labor-Management Agreements and Choice = Regarding alternatives to the 52-hour workweek, experts also stress the importance of autonomous agreements and choice between labor and management. They believe the era of forced long working hours is already over.

Roh Minseon, a research fellow at the Korea Small Business Institute, said, "If a company demands forced labor, the market will reject it first. Under the current uniform application, there is little room for labor and management to make their own choices, but it is not only important to reduce working hours; it is also crucial to allow for application tailored to the realities of SMEs. No matter how right the direction may be, we must consider the complex and diverse characteristics of more than 8 million SME workplaces and the fact that their small scale is still overwhelmingly higher than in advanced countries."

Yoon Dongyeol, professor of business administration at Konkuk University, said, "We need to discuss methodologies that can actually be applied in SME workplaces. The 4.5-day workweek and similar policies should not be rushed, but should be thoroughly reviewed and introduced through social dialogue." Kim Sunghee, professor at the Korea University Labor Research Institute, said, "The government is trying to offer incentives to companies that adopt the 4.5-day workweek, but this approach will not lead to widespread adoption. Working hours should be determined through labor-management consultation."