Korean 2014 Mid-Year Update
A quick look at developments in the Korean job market since the start of 2014.
Our salary and market insights are an essential tool in planning your recruitment and retention strategy for the coming year.
As we reach six months since the launch of the REED 2014 Salary Guide and Market Insight, we are taking a look at changes we have seen across the business landscape in the first half of the year.
Throughout the first half of 2014, retail companies have been looking to reduce costs whilst improving service and achieving maximum benefit. There has also been a focus on a reduction in labour cost cutting in 2014 when compared to the 2013 figures.
The demand is high within the retail sector for great number of employees such as sales clerks and administration assistants. It is expected for there to be an expansion in market power assuming businesses are prepared to be well equipped with HR management systems and utilising the skills and experience gained from past experience of managing sales clerks and facing retail-related issues.
To support further growth in the retail field, it is important to try and build on experience through post management, service management, systematic staff management and HR education.
Since the start of 2014, outstanding temp businesses such as JinBang Temp Group, Korean Connection and WithStaff, have been pushed to bankruptcy due to a number of factors. These could be issues such as aggravated profitability, sales activity focusing more on increasing sales profits rather than margin, impractical business expansion and uncollected investment. These are all areas to be wary of as businesses move into the second half of the year.
To avoid similar situations, clients will be looking for partners that are secure in their budgets and employ a safe and risk-controlled system. Similarly, candidates will be more likely to apply to companies that are open and trustworthy. Businesses should focus on increasing sales and margins to expand business in Korea, but there should always be accompanied by effective management solutions.
The first half of 2014 has seen recruitment demand restricted to certain areas within the chemical sector. Requirements from petrochemical and speciality chemical industries are currently small due to the business stability and new business opportunity is at a minimum. At the other end of the scale, there is a large recruitment demand from the electronic material and engineering plastics sectors. This is because of the booming automotive, mobile and semiconductor industries and the dominance of companies such as Hyundai and Samsung.
Demand for R&D and application development is increasing and we expect this trend to continue. In order to develop new material and enter the market as a first mover, manufacturers are recruiting scientists and development professionals in large quantities. In order to beat the competition, they are also recruiting application engineers for the development of the new Blue Ocean Chemical Plant.
In the first half of 2014 the Korean retail market showed very weak growth due to the recession and several social issues. However, in the second half of this year the market is likely to recover to some extent due to the activation of M-commerce and combined malls.
If we take a closer look, the largest growth is expected in the online shopping marketplace, followed by convenience stores, TV home shopping, supermarkets, department stores and large scale discount stores in descending order.
Growth will focus on the products which are related to small families and individuals with a need for daily supplies and fashion products.
Due to the weak growth in the retail and distribution markets, companies are becoming more prudent and ‘picky' with the hiring of employees. In addition, the companies are showing a tendency to hire working level personnel who have previous experience in the same industry, rather than hiring people new to the industry or individuals seeking higher level positions.
In the sales and marketing sector, businesses are prioritising the specification, result and trend understanding of a jobseeker, instead of just the specification of the person. Because of this the recruitment market also needs to adapt and grow in line with the changing trend.
A similar atmosphere exists within the technology sector as last year, which means that while there are no issues as such, not so much issues but there are still a large volume of mergers and acquisitions cases.
Furthermore, a number of foreign semiconductor companies operating in Korea are increasingly requesting recruitment services for camera and sensor development, for portable devices relating to healthcare.
Many employees feel that opportunities to move are few and far between, especially for senior management positions. This is due to extreme caution in the hiring process and companies are only looking for individuals with the right talents and a proven track record.
Because of this, there is a greater need for those considering a move to think more carefully about their selling points for better opportunities. For those seeking a new challenge at a senior level, consideration should be given to new markets coming about from a convergence of industries.
As the Korean economy shows signs of being on a moderate recovery path, the equipment investment is forecasted to steadily rebound from the slumps of last year, driven by improving external and internal business conditions and diminishing uncertainties. Increases in investment within Enterprise will have an especially positive effect on the growing IT industry.
In the IT industry, we foresee a tremendous demand for workforce within Mobile Device Diversity and Management, such as bring your own device (BYOD) programs. In addition to these Mobile needs, the emerging technology that impacts an organisation's long-term plans and initiatives are Mobile Apps and Applications, Internet, which is expanding beyond PCs. Also there will be continued growth in Cloud Service as the personal cloud era makes a power shift away from devices.
The rise in data volumes has created an increasing need to protect and manage Big Data, which will also require the solutions to manage a growing risk of data loss. Because of this Security is a sustained and growing sector in line with the new technology trends. It is anticipated that these emerging technology areas will demand a greater workforce and a shift inside the labour market is expected.