Korea

Country starter pack
Business practicalities in Korea
71
OECD TOP 5 COUNTRIES
COLLEGE GRADUATION RATE
(age 25-34 in 2012)
ENGINEERING COLLEGE GRADUATES
(of every 100,000 people)
Korea
65%
Japan
60%
Canada
57%
Russia
56%
Ireland
48%
Korea
3,555
New Zealand
2,987
France
2,717
Finland
2,384
UK
2,380
Source: OECD
5.5 EMPLOYING WORKERS
Labour market
Korea’s labour force is generally regarded as highly
literate, well-educated, motivated, and hard working.
Currently, however, there are shortages of manual and
factory workers in some industries. The shortage in
labour-intensive roles is being met by foreign workers
from countries such as Vietnam, the Philippines,
Indonesia, Pakistan, Thailand, Mongolia, and Sri Lanka.
In this context, a Foreign Workers Employment Act was
introduced in July 2010, permitting Korean industries
to employ foreigners from countries with which Korea
maintains bilateral labour agreements.
Being a nation of limited natural resources, Korea’s
principal resource is its abundant supply of skilled labour.
This has played a primary role in Korea becoming a world
leader in industries such as shipbuilding (first in 2014),
auto vehicle manufacturing (fifth in 2013), and steel
making (sixth in 2013).
As a nation, Korea is passionate about education.
Enrolment rates at all levels of education are among the
highest in the world. These factors, combined with the
country’s high degree of technological adoption and
relatively strong business sophistication, help explain its
remarkable capacity for innovation. It boasts a literacy
rate of around 98 per cent, its university entrance rate
was 72.5 per cent (the highest among OECD member
countries) and about 65 per cent of people aged
between 25 and 34 were university graduates. Every
year, approximately 470,000 university graduates
join the labour market. Its commitment to excellence
in education feeds a continuous supply of high-quality
human resources for industry, which in turn enhances
competitiveness and innovation in the Korean economy.
Furthermore, 42.1 per cent of Koreans in the workforce
are also studying at the same time as working to obtain
higher skill levels or new qualifications.
Koreans are diligent and faithful to their work. In 2012,
their average annual working hours were 2,163 – the
second highest among OECD countries. The labour
productivity index has also steadily risen in recent years,
with Korea recording one of the highest increases in
labour productivity in the OECD between 2009 and
2013.
Employers should also be aware that Korea has
conscription - compulsory military service, for Korean
men aged between 18 to 35 years. Most men will
undertake their required military service generally in their
late teens or early twenties. The length of conscription
varies between 21-36 months. This means that someone
of a certain company position may seem to be older than
what they would be in the same position in Australia.