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Major firms' labor costs swell amid weak hiring in 2021

All News 14:08 April 21, 2022

SEOUL, April 21 (Yonhap) -- Major South Korean firms' labor costs rose nearly 13 percent in 2021 from a year earlier, but their hiring activities remained sluggish, a corporate tracker said Thursday.

The combined labor cost of 120 companies, which are the top businesses in the country's key 12 industrial sectors by revenue, amounted to 74.8 trillion won (US$60.6 billion) last year, up 12.8 percent from a year earlier, according to Korea CXO Institute.

Despite increased personnel expenses, those companies added a mere 1,300 new jobs, with their combined workforce edging up 0.2 percent to some 776,600 over the cited period.

The institute said the latest data serve as new proof that a local managerial mantra of higher labor costs leading to increased employment has been increasingly losing ground.

In 2020, the companies' total labor costs increased 3 percent on-year, while their combined headcount decreased 0.5 percent.

Top-cap Samsung Electronics Co., the largest employer in Asia's fourth-largest economy, registered the biggest labor cost increase last year, with its payroll surging to 15.8 trillion won from 13.2 trillion won in 2020.

Global chip giant SK hynix Inc. jacked up its labor costs by some 700 billion won to 3.3 trillion won, with those of top automaker Hyundai Motor Co. rising to 6.9 trillion won from 6.3 trillion won.

The average salary of employees for the 120 companies came to 96.3 million won in 2021, up from 85.5 million won a year earlier, according to the institute.

Major firms' labor costs swell amid weak hiring in 2021 - 1


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