62.1% of Mid-Sized Companies Prefer "Rehiring After Retirement"... Only 33.1% Support Retirement Age Extension

KFME Announces Results of "Survey on Continued Employment in Middle Market Companies"

As discussions on extending the retirement age are gaining momentum in the National Assembly, the mid-sized business sector has voiced the opinion that "rehiring after retirement" is a solution to both enhancing corporate competitiveness and ensuring employment stability for older workers.

The Korea Federation of Middle Market Enterprises announced the results of its "Survey on Continued Employment in Middle Market Companies" on November 10. The survey was conducted from August 25 to October 16, targeting 169 mid-sized companies.

According to the results, 62.1% of mid-sized companies identified "rehiring after retirement" as their preferred method for ensuring corporate sustainability through continued employment of older workers. In comparison, "retirement age extension" and "abolition of the retirement age" accounted for only 33.1% and 4.7%, respectively. The federation explained that this trend was consistent regardless of industry, sales size, or number of employees.

The mid-sized business sector believes that a blanket extension of the current statutory retirement age of 60 would increase labor costs (64.5%) and reduce the capacity for new youth hires (59.7%). Additionally, 41.4% responded that it would exacerbate personnel bottlenecks within organizations. Notably, 16.6% of respondents expected labor costs to increase by more than 30%, 27.8% anticipated an increase of over 20%, and 45.0% predicted an increase of over 10%. Only 10.6% said there would be no change.

Furthermore, 52.6% of mid-sized companies are currently employing workers beyond the statutory retirement age, and among these, 69.6% have adopted the "rehiring after retirement" method. The reasons for rehiring included "utilizing the expertise and know-how of existing employees (84.2%)," "addressing labor shortages due to difficulties in new recruitment (24.7%)," "fulfilling corporate social responsibility (20.2%)," and "meeting demands from labor unions and employees (14.6%)."

Regarding the wages of employees rehired after retirement, 31.4% of mid-sized companies reported paying at the "90% level" compared to the wage at the time of retirement, 23.6% at the "80% level," and 31.4% responded that they pay "100% or more."

Mid-sized companies emphasized the urgent need for policy support to promote continued employment of older workers, citing "expansion of tax benefits (57.9%)," "direct wage subsidies (53.2%)," "enhancing employment flexibility (37.2%)," and "alleviating the burden of social insurance premiums (36.0%)."

Lee Hojun, Executive Vice President of the federation, stated, "As seen in the current operation of 'rehiring after retirement' in mid-sized companies, skilled older workers are a core element of corporate competitiveness. In contrast, a uniform extension of the retirement age that does not reflect on-the-ground demand risks undermining corporate fundamentals by increasing labor costs." He added, "In the era of AI, as the landscape of labor is expected to change dramatically, it is essential to seek effective alternatives that broadly encompass social policies, such as expanding outplacement and reemployment training and strengthening welfare for the elderly, rather than simply extending the retirement age. This will support companies' effective responses and enhance the sense of efficacy among older workers who have contributed to economic development through stable employment."