Over 40% of manufacturers say they need more foreign workers

More than 4 in 10 manufacturing business owners here say they will need more foreign workers next year, but cited language barriers and a difficult hiring process as key concerns, a survey found Sunday.

The survey was conducted by the Korea Enterprise Federation, one of the major business lobbies here, with a total of 615 small and medium-sized businesses with fewer than 300 employees, in August and September.

Of the total, 36.9 percent responded in favor of expanding the E-9 visa quota -- currently at 120,000 -- to hire more foreign workers next year, while 58.7 percent said this year’s level should be maintained. Only 4.4 percent supported a reduction.

Across industries, the manufacturing sector showed the highest support for expanding the quota, at 42.5 percent, followed by 21 percent in the service sector and 17.2 percent in the construction sector. Among “root industries” -- industrial fields related to the infrastructure of manufacturing such as casting and molding -- the approval rate was 50.3 percent.

The manufacturing sector accounted for most of the 120,000 E-9 visas issued this year with some 75,000. Only 3,000 and 1,000 were allotted for the construction and service sectors, respectively.

Respondents who called for an increase in the quota gave an average target of about 151,000, despite the current quota already being a significant increase from 69,000 in 2022.

As well as being more likely to support an increase, businesses in root industries also asked for a higher new quota, at 162,000 visas on average.

According to the survey, 92.7 percent of total respondents said they hired foreign employees due to the difficulties of recruiting Korean nationals. Only 2.9 percent cited lower costs and just 1.6 percent mentioned a low turnover rate.

Low labor costs may no longer be the key motivation in hiring foreign workers. Responses showed the labor costs for foreign employees, which encompasses expenses for wages, accommodation and social security payments, were higher than those of Korean employees.

The primary difficulty associated with foreign employees on a working level was communication difficulties (53.5 percent), followed by increased direct labor costs due to increases in the minimum wage (16.4 percent) and cultural difficulties (11.9 percent). Multiple responses were allowed.

The most mentioned institutional difficulties were complicated hiring procedures (46.5 percent), followed by their short length of stay (31.4 percent) and the foreign labor quota (20.7 percent).

Some 70 percent of respondents said there needs to be integrated management of foreign laborers. The current immigration policies are divided up by government departments here.

Only 47.5 percent, however, agreed to the Korean government opening a separate bureau for managing immigration. The government plans to establish a new migrant-related state agency in response to an expansion of the immigrant population, as the current Yoon Suk Yeol administration plans to tackle depopulation with foreign workers.

"The on-site manpower shortage is serious, shown by more than 50.3 percent of businesses in the root industries responding there should be an expansion on the number of foreign workers next year," said Kim Seon-ae, head of the labor policy department at the KEF.

"The need for foreign workers is unavoidable as the working-age population is on a decrease," Kim said. "There needs to be a review of policies on foreign workers such as opening an immigration bureau to respond to the imbalance in the labor market and to secure the nation's growth.”