Why Are Nearly 60% of Mid-Sized Firms in South Korea Not Hiring in H2?
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Synopsis
As South Korea faces an economic slowdown, nearly 60% of mid-sized firms plan to refrain from hiring in the second half of the year. This article explores the reasons behind this trend and the implications it may have for the workforce and economy.
Key Takeaways
- Nearly 60% of mid-sized firms in South Korea are not hiring.
- Main reasons include economic slowdown and rising costs.
- Companies are asking for greater government support.
- Only 44% of firms plan to hire, with reduced scales expected.
- KOSPI index shows a slight increase amid foreign investments.
Seoul, July 21 (NationPress) Almost 60 percent of mid-sized enterprises in South Korea have indicated that they will not be hiring any new employees during the second half of the year, attributing this decision to a prevailing economic slowdown, according to a statement from a local business advocacy group released on Monday.
A recent survey encompassing 800 mid-sized firms conducted by the Federation of Middle Market Enterprises of Korea (FOMEK) revealed that 56 percent do not intend to expand their workforce in the latter half of the year, as reported by the Yonhap news agency.
The primary reasons cited for this lack of hiring include worsening business performance, increasing labor costs, and the ongoing economic downturn.
In South Korea, businesses classified as mid-sized have total assets ranging from 500 billion to 10 trillion won.
Meanwhile, 44 percent of the surveyed companies expressed intentions to hire in the upcoming months, although many anticipate a reduction in their hiring scale compared to the first half due to lowered demand.
Companies are urging the government to enhance financial support for recruitment, foster a more adaptable job market, and provide additional tax incentives.
A representative from FOMEK stated, "The government must devise strategies to address critical labor issues, including extending the retirement age, restructuring ordinary wages, and modifying working hours."
In other news, shares in Seoul saw an increase on Monday, propelled by robust performances from large-cap tech stocks and foreign investments.
The benchmark Korea Composite Stock Price Index (KOSPI) rose by 14.29 points, or 0.45 percent, reaching 3,202.36 as of 11:20 a.m.
Foreign investors acquired 427.7 billion won (around US$307 million) worth of local shares, while institutional investors purchased 161.4 billion won. Retail investors, however, offloaded 627.3 billion won worth of shares to capitalize on profits.
On Friday, U.S. markets closed in a mixed fashion as concerns regarding the Trump administration's tariff policies tempered the optimistic sentiment generated by favorable retail sales data.
The Dow Jones Industrial Average fell by 0.32 percent, and the S&P 500 dipped 0.01 percent, while the tech-heavy Nasdaq composite edged up by 0.05 percent.
Point of View
It is crucial to acknowledge the challenges faced by mid-sized enterprises in South Korea. As they navigate economic uncertainties, a balanced approach by the government in addressing labor issues and providing support is vital for fostering a resilient job market.
NationPress
21/07/2025
Frequently Asked Questions
What percentage of mid-sized firms in South Korea are not hiring?
Nearly 60% of mid-sized firms in South Korea have no plans to hire in the second half of the year.
What are the main reasons for not hiring?
The primary reasons cited include worsening business performance, rising labor costs, and the economic downturn.
What does the government need to do?
Companies are urging the government to increase financial support for hiring and to create a more flexible job market.
