Banks Begin Moving Toward 4.5-Day Workweek... Practical Challenges Raised [1mm Finance Talk]

IBK Industrial Bank and NH Nonghyup Bank
Implement One-Hour Shortened Workdays
Early Leave Policy Introduced
Other Banks Also Engaged in Discussions

Bank branch counter. Photo by Yonhap News

As the Lee Jaemyung administration pushes for the introduction of a 4.5-day workweek, the financial sector is also beginning to take related steps. However, some point out that it is still difficult to implement in practice due to issues such as work schedule adjustments and wage concerns.

According to the financial industry on January 9, IBK Industrial Bank of Korea officially introduced a one-hour shortened work schedule on Wednesdays and Fridays starting January 7. Employees leave work one hour earlier than usual and participate in training programs remotely. However, the implementation is left to the discretion of each branch.

NH Nonghyup Bank is also planning to introduce a one-hour shortened work schedule per week soon. This will take the form of an early leave system, with employees leaving one hour earlier on Fridays. A Nonghyup Bank official stated, "Although it has not been officially announced yet, it will be implemented within the first half of the year."

This movement among banks stems from labor-management negotiations between the National Financial Industry Labor Union and the Financial Industry Employers' Association. In October last year, labor and management in the financial sector reached a tentative agreement to implement a one-hour shortened work schedule on Fridays and to form a task force for the adoption of a 4.5-day workweek.

Following this agreement, KB Kookmin Bank, Shinhan Bank, and Hana Bank are also discussing related measures. Woori Bank is expected to begin full-scale discussions once the union's executive team is in place. Financial public enterprises are also showing similar moves. The labor and management of Korea Asset Management Corporation (KAMCO) recently agreed to pilot a KAMCO-style early leave system. Korea Credit Guarantee Fund also agreed at a labor-management council meeting in July last year to discuss the introduction of a 4.5-day workweek after the government's guidelines are finalized.

However, there are concerns that there are many practical issues to overcome before even shortened work hours, let alone a 4.5-day workweek, can be implemented. Due to the nature of bank branches, it is not easy to reduce business hours. In particular, as the number of bank branches has recently decreased, the workload for bank employees has increased. An official at a commercial bank said, "Even if the branch closes at 4 p.m., we do not strictly ask customers to leave at 4 p.m. sharp," adding, "Considering the closing tasks after business hours, substantial agreement will be needed before shortened work hours can become a reality."

In addition, wage and cost issues arising from the implementation of shortened work hours are also cited as important discussion points. Cha Dongwook, a legislative researcher at the National Assembly Research Service, pointed out in a recent report, "The most important issue is whether it is possible to reduce working hours without cutting wages," adding, "Given factors such as company size, organizational capacity, and workforce management flexibility, the cost burden from reduced working hours could be significant."