Top 10 big firms hiring fewer staff than they can afford

Hyundai Heavy, Hyundai Motor, POSCO had the lowest employment rate


Korea’s top ten companies have been slow and reluctant to hire new employees despite a sharp increase in revenue over the years, according to media reports citing data by the Financial Supervisory Service and the Korea Chamber of Commerce and Industry.

The number of people employed by the top 10 in their respective sectors such as consumer electronics, automobile, steel and retail only stood at 294,652 last year, up from 222,995 in 2002.

Jobs increased 3.1 percent on average annually, while the top 10 conglomerates’ revenue grew 10.7 percent. Real GDP growth was 3.8 percent in the same period.

Their sales increased 2.5-fold to 365.9 trillion won in 2011, up from 146.9 trillion won in 2002.

The top ten are Samsung Electronics, Hyundai Motor, POSCO, Hyundai Heavy Industries, LG Chem, KT, SK Networks, Lotte Shopping, Korean Air and GS Caltex.

Despite support from the President Lee Myung-bak administration to the leading conglomerates through business-friendly policies, Korean firms only focused on boosting sales and assets while creating minimum jobs.

CEO Score, an information service provider on family-run conglomerates and chief executives, pointed out that Hyundai Heavy Industries Group, Hyundai Motor Group and POSCO had the lowest job creation rate over the last four years.

Even though Hyundai Heavy posted an 86 percent increase in sales to 34.2 trillion won, it only expanded its workforce by 5.6 percent between late 2007 and 2011.

Hyundai Motor also had low job growth, at 14 percent, while its sales reached 132.7 trillion won in 2011, up 110 percent from 62.9 trillion won in 2007.

POSCO, Korea’s steel giant, had 20.9 percent employment growth, with sales of 62.3 trillion won, up 161.7 percent from 23.8 trillion won in the same period.

Lotte Shopping, Samsung Electronics, SK Networks and LG Electronics were among subsidiaries of industrial groups that increased employees.

LG and Lotte notably boosted their staff more than their annual sales increase, according to CEO Score.

SK and GS were the top industrial groups that hired the most over the four years.

The top 10 firms generated 24.6 percent of total sales by Korea’s 500 leading companies in 2011. Their combined operating profit accounted for 34.8 percent, while net profit 36.6 percent, according to FSS and KCCI data.

By Park Hyong-ki (hkp@heraldcorp.com)