Middle-aged workers surpass 20s in large companies for the first time

The emergence of middle-aged workers as the dominant age group in large companies, surpassing the 20s for the first time, is a significant and urgent trend that demands attention.

Last year, the proportion of Samsung Electronics employees aged 40 and above exceeded that of those in their 20s and below for the first time, according to reports. Among the employees of South Korea's top four conglomerates, the proportion of younger workers has been steadily declining. Concerns are mounting that if this trend continues, it could dampen economic vitality despite the inevitable aspects stemming from the maturing of the economy and the advancement of industrial structures.

According to a report analysis by The Dong-A Ilbo, the percentage of Samsung Electronics employees aged 20 and below, which was 60% in 2008, plummeted to 27% last year. Conversely, the proportion of employees aged 40 and above jumped from 10.2% to 30.4% over the same period, marking the first generational reversal. At Hyundai Motor, the proportion of employees aged 50 and above rose from 34% in 2015 to 44% two years ago, while those aged 30-49 fell from 56% to 44%. Similar trends, albeit with varying degrees, are growing evident at SK hynix and LG Electronics, showing clear declines in the proportion of younger workers.

The primary reason for the aging workforce in industrial settings is attributed to slower corporate growth rates, resulting in reduced preemptive hiring of younger talent ahead of organizational expansions. The impact of rigid employment systems and increased automation investments by companies, which diminish the need for on-site personnel, also plays a significant role. Additionally, there is a trend where many middle-aged employees opt to remain in their positions until retirement without promotions, reducing opportunities for hiring younger workers.

To overcome these challenges, businesses need to discover new growth drivers, expand operations, and actively recruit young talent. However, industries such as semiconductor manufacturing require substantial investment relative to their job creation capacity, and emerging sectors like electric vehicles and secondary batteries have not generated as many jobs as anticipated due to sluggish global demand. For instance, the blue-collar jobs at Hyundai, which are preferred by younger workers, are not easy to expand, with labor unions advocating for retirement age extension. Moreover, there is a growing trend of employers favoring an experienced workforce for immediate deployment over entry-level job seekers.

Addressing youth unemployment is not a task for businesses alone. It requires concerted efforts and collaboration among businesses, labor forces, and governments to explore ways to create future job opportunities. The continued adherence to seniority-based wage systems, where retiring workers with higher seniority receive top salaries, poses challenges for businesses in securing resources for young hires. Urgent reforms in wage systems that allow for flexible adjustments based on job importance and performance are needed. Rather than taking for granted the role of companies in creating decent jobs, there should be strengthened tax incentives to support companies to significantly increase youth employment.