[Exclusive] "Stay Long at Our Company and Get a House"?Government Rolls Out Measures, But Young People Still Avoid SMEs for Big Corporations

Ministry of SMEs and Startups Revises Guidelines for Priority Housing Supply for Long-Term Employees
Increased Weight for Employees with Long Tenure at the Same Company and Simplified Evaluation Items
Plans to Expand Special Housing Allocations for

As the labor shortage at small and medium-sized enterprises (SMEs) intensifies, the government is rolling out a series of measures to increase the number of SME employees. These include expanding housing support for long-term employees and lowering the threshold for joining savings products designed to help them build up substantial funds. Experts agree that preferential treatment for long-term employees is necessary, but advise that fundamental measures to enhance the overall competitiveness of SMEs should take priority.

The Gangnam-gu Job Fair held at COEX in Gangnam-gu, Seoul, is bustling with job seekers. Photo by Yoon Dongju

According to government and industry sources on October 1, the Ministry of SMEs and Startups is revising the guidelines that determine the selection criteria for the "Priority Housing Supply for Long-Term SME Employees" program. The main points are to increase the weighting given to "employees who have stayed with the same company" among long-term SME workers, and to consolidate unnecessary evaluation items, thereby lowering the total score from the current 120 points to 100 points. The Priority Housing Supply for Long-Term SME Employees program is a system in which the government comprehensively evaluates factors such as the length of employment at SMEs, the period without home ownership, and possession of certifications, and grants priority rights to purchase or lease housing to those with higher scores.

An official from the Ministry of SMEs and Startups said, "The intention is to give preferential treatment to those who have worked at a single SME for a long time, rather than those who have moved between several companies," adding, "Based on the revised content, we will gather internal and external opinions in the middle of this month and announce a detailed scoring table within the year."

As young people increasingly avoid SMEs and the outflow of talent grows, the recruitment difficulties facing SMEs have reached a peak. According to the Korea Small Business Institute, the proportion of SME employees under the age of 39 was 30.4% last year, a decrease of 5.1 percentage points over the past decade. During the same period, the proportion of employees aged 50 and older increased to 48.6%, rising by more than 10 percentage points. Currently, 28.9% of respondents said that their workforce is "insufficient." With the inflow of young people who could lead companies for a long period declining and the workforce aging, the outlook for the future workforce structure is seen as bleak.

The government's flurry of measures to expand housing support and other benefits stems from this sense of crisis. Last month, the Ministry of SMEs and Startups announced the launch of a new "preferential savings plan for SME employees" with a shortened subscription period of three years, in addition to the existing five-year plan. The aim is to lower the barrier to entry for SME employees and increase the benefits. In addition, the ministry is expanding the supply of "special housing allocations exclusively for young SME employees" and is discussing with the Ministry of Land, Infrastructure and Transport ways to help stabilize housing for young SME workers.

Experts noted that while these measures can serve as a form of welfare for current SME employees, their effectiveness in attracting new young talent is likely to be limited. They emphasized that unless fundamental efforts to improve SME competitiveness are made in parallel, these measures are likely to remain only temporary fixes.

Jung Se-eun, professor of economics at Chungnam National University, said, "Given the significant wage gap between large corporations and SMEs, it is difficult to expect young people to choose SMEs over large companies simply because of government policies." He added, "However, it will to some extent help the government compensate for the poor working conditions at SMEs." Noh Minseon, a research fellow at the Korea Small Business Institute, said, "These measures can send a positive signal about SMEs to young people," and advised, "In addition, a variety of initiatives to improve the working environment at SMEs should be implemented in parallel."