Employment Policy

Pursuing Employment-Friendly Job Policy

Overview

  • Decent jobs enable individuals to accumulate human capital and improve their productivity, thereby increasing incomes and enhancing the economy's growth potential. Creating decent work is the key solution to low growth, social polarization, low fertility and other structural problems facing the Korean economy.

    However, amid the sharp economic slowdown since the 1997 financial crisis, both large companies and SMEs have faced increasing difficulties creating quality jobs due to manufacturing slump and stagnation in the service sector. With the widening gap between large companies and SMEs and between manufacturing and service industries, low pay is becoming entrenched across SMEs and the service sector, which make up a large share of employment. The quality of employment is also deteriorating as Korean workers still work the longest hours among the OECD countries and many of them do not even enjoy the protection of their legal rights, such as the minimum wage.

  • To address this, the government aims to restore the virtuous circle of employment, distribution and growth by accelerating income -driven innovative growth based on a fair economy.

    In October 2017, the Presidential Committee on Job Creation announced the five-year Job Policy Roadmap. The Committee selected five policy areas and ten key tasks and came up with a year-by-year implementation plan, with the aim of firmly establishing the virtuous circle of employment, distribution and growth within the next five years.

  • First, the government will build a job-oriented governance system. With creating decent jobs at the top of the national agenda, policy tools, including fiscal, tax, monetary, procurement and licensing systems, will be redesigned with the focus on decent jobs . The government will provide greater protection for workers by ensuring that no one falls through the cracks of the employment safety net and strengthening safeguards against unemployment and industrial accidents. At the same time, an overhaul of the education and training system will be pursued to prepare people for the Fourth Industrial Revolution.

  • Second, the government will increase the public sector workforce to provide quality services that meet people's needs and enhance the economy's medium- and long-term growth potential, for example by expanding jobs for young people. To create more jobs, the government will convert indirectly employed workers to direct employment status, fill staffing shortfalls at public enterprises and government–affiliated institutions, and reduce working hours.

  • Third, the government will promote the creation of innovative startups, enhance industrial competitiveness and foster emerging and service industries in order to create jobs in the private sector. The government will boost the social economy and support job creation in new promising industries, such as environment-friendly smart cars, autonomous vehicles and smart cities, by promoting convergence and reforming regulations.

  • Fourth, the government will prevent excessive use of non-regular employment and promote non-discrimination in workplaces to improve the quality of jobs. The government will also improve working conditions by raising the minium wage and reducing working hours.

  • Finally, the government will promote jobs for youth and women. It will provide tailored support to each industry and employment stage (e.g. job search, hiring process and continued service) — improve the quality of life of young people and help companies accumulate human capital. The government will help women achieve a balance between work and life and provide customized employment services for women returning from career breaks in order to expand opportunities for women to work.

Employment service policy

  • Employment service policy helps match job seekers with potential employers. The government provides comprehensive employment services, including provision of information on job seekers and job openings, career guidance and vocational training. By promptly matching talented workers to companies in need of workers, employment services support efficient utilization of human resources at the national –level and contribute to the growth of individuals and companies.

    The role of employment services is becoming increasingly important as the economy's ability to translate growth into job creation is weakening and people change jobs more frequently.

  • Against this backdrop, the government is focusing on how to advance employment services. For a start, a sweeping reform is underway to enhance employment services.

    As MOEL sees identifying businesses currently employing or seeking to employ workers is important to address mismatch between jobs and skills, it operates "Job opening search team" from 2016, which finds businesses that offer quality employment opportunities. In 2019, 5,000 were selected among such businesses to receive special support in recruitment, and it led to 16,000 successful job placement.

    MOEL also runs a competency enhancement program for career counselors to provide better counseling services to jobseekers. In particular, the Ministry has set up a new six-week training course targeting talent with great potential and granted the graduates the official title of Career Consultants to give them a sense of responsibility for their expertise.

  • MOEL deployed AI Chatbot service that conducts a conversation with people to make job-search counseling available 24/7 (started its pilot operation in March 2019), and deployed the Work AI, that integrates the existing big data-based recommendation algorithm with AI technology, from July 2020 to recommend more fitting jobs to job-seekers and to make it easier for businesses to find the right candidate for the job.

    • Please check the text below.

      Please check the text below.

      Job&competency-based matching

      Job&competency matching between businesses offering employment opportunities and job-seekers

      • Resume-Recruitment notice matching
      • Cluster of recruitment notices for business management and planning

      Resume-Job matching

      • business management and planning (recruitment notices, resumes, job)
        • big data (recruitment notices, job)
        • reflects the results of job matching
          • Job-Dictionary Ontology
        • (recruitment notices, job)
        • (recruitment notices, job)
        • (recruitment notices, job)

      Doc2Vec, Word2Vec

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      Please check the text below.

      Recruitment&Job-search data-based matching
      Attribute matching between job seekers and job seekers
      • Position
        recruitment notices
        rapid information extraction from recruitment notices
      • Region
        recruitment notices
        rapid information extraction from recruitment notices
      • Pay
        recruitment notices
        rapid information extraction from recruitment notices
      • Requirements (certificates, licenses)
        recruitment notices
        rapid information extraction from recruitment notices
      • Position
        rapid information extraction from resumes
        resumes, CVs
      • Region
        rapid information extraction from resumes
        resumes, CVs
      • Salary requirements
        rapid information extraction from resumes
        resumes, CVs
      • Requirements (certificates, licenses)
        rapid information extraction from resumes
        resumes, CVs

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      Please check the text below.

      Behavior-based matching
      • Recruitment notices (job title, job description)
      • Recommendation between groups with similar behavior patterns and interests
      • History of WorkNet activities
        • Browsing history
        • Job application history
        • Analyze weblog

      Elements that cycle with each other.

  • Since 2019, MOEL has been making efforts to establish “National Job Opening Information Platform,” that would let job-seekers find information on job openings managed by the ministry and relevant organizations at a glance. Once this system is up and running, it is expected to not only reduce the mismatch between job openings and job seekers by providing job-seekers with information on the type of talent wanted by the businesses, but also enable information analysis on jobs in different regions and industry, which will be useful in developing employment policies.

  • Future employment services will be characterized by one-stop services, convergence and enhanced support for vulnerable groups. For those who need both employment and welfare services, the government provides a one-stop channel through Employment -Welfare Plus Centers.

    • The number of Employment-Welfare Plus Centers were 10 in 2014, but it rapidly grew to 98 centers as of the end of 2017. The centers provide a variety of integrated services such as employment, welfare, and micro-finance services.
    Employment-Welfare Plus Center

    Employment and welfare services had been provided in a fragmented way in different places according to service type and target people, so people had to visit a number of agencies to receive those services. To address this problem, the government has opened Employment-Welfare Plus Centers.

    Through the Centers, people can get customized services of different employment and welfare service agencies in one place.

    Please check the text below.

    Please check the text below.

    1. Welfare service recipients( Those who can work, connect them to employment service agencies)
    2. Employment service recipients (connect them to welfare service agencies, Those who need welfare services)

    Elements that cycle with each other.

    *Starting with the establishment of the Namyangju Employment-Welfare Plus Center, MOEL additionally set up 10 such centers in 2014, 30 in 2015, 30 in 2016 and 28 in 2017, bringing the total number of them to 98 nationwide.

  • MOEL is also working to expand the Employment Success Package Program (ESPP) which provides employment support to jobseekers from low-income families and young jobseekers. The number of ESPP participants increased from 230 thousand people in 2013 to 361 thousand in 2017, and the employment rate of the participants also jumped from 55.2% to 68.9% over the same period.

    * Number of participants (unit: 10,000 persons): (2014)19.4→(2015)29.5→(2016)36.6→(2017)35.2→(2018)30.8→(2019)18.8→(2020.7)12.1

    ** Employment rate(%): (2014)60→(2015)63.8→(2016)66.2→(2017)64.1→(2018)61.5→(2019)57.4→(2020.7)74↳ Please note that the statistics for 2018～2020 are incomplete, as Employment Success Package program’s step-by-step support is still under implementation

    • In particular, the government temporarily reintroduced job search promotion subsidy for those from low-income households*, taking into account that the spread of COVID-19 made employment situations of the vulnerable difficult in order to stabilize their livelihood and enable them to engage in job-search activities.

    * ▴Target of support: New participants in 2020 with a household income of 60% or less that have moved on to the third step▴Provided support: 500,000 won a month for up to three months under the condition that the participant engages in job-search activities two times a month

    National Employment Support System

    From January 1st 2021, the national employment support system, a Korean-style unemployment allowance, was enacted.

    The national employment support system supports customized employment support services and stable livelihood for low-income people, unemployed young people, and women on a career-break or anyone who are not protected by unemployment benefits.

    Participants in the national employment support system make job activity plans according to the level of employment will and competency identified through in-depth counseling, and receive various job support services such as job training, work experience, resume and interview consulting, and employment supportive information.

    In particular, those fall in lower than 60% of a median household income and with a wealth of less than 400 million won (18-34 years old, having less than 120% of median income, and less than 500 million won in assets) can receive 500,000 won of job seeking promotion allowance per month for six months.

    In addition, starting from 2023, an additional 100,000 won (limited to 400,000 won) per month per dependant (under 18 years old, over 70 years old, and severely disabled) will be paid as a job seeking promotion allowance to reduce the burden of breadwinners and faithfully find a job.

    And, if participants are hired early, 50% of the remaining job seeking promotion allowances will be provided as early employment success allowances to actively support building a elf-reliance foundation through employment for low-income families.

Vocational skills development policy

  • The Ministry of Employment and Labor (MOEL) is pursuing policies focused on innovation-led growth and development of future talent through vocational skills development to respond to changes in the labor market brought by the Fourth Industrial Revolution, namely changes in industrial structure, forms of employment and demand for different skill sets and qualifications.

  • On April 10th, 2019, MOEL launched "Vocational skills development innovation measures" to enhance people's adaptability to new technologies and industries and to improve lifelong employability, and accordingly, step by step measures are underway.

  • First, to improve people's adaptability to new jobs and to foster skillful talent in the age of convergence, vocational development programs are putting more emphasis on new technology sectors.

    Through K-Digital Training, a training course for new digital technologies, the government plans to foster 180,000 future-oriented key individuals in the field of new digital technologies during 2021-2025. The government is also continuously expanding specialized training such as Polytechnic hightech courses, and introduced contactless·highly promising technology sectors such as AI·smart logistics in NCS courses.

    National Competency Standards (NCS)

    The National Competency Standards (NCS) are a set of standardized knowledge, skills and understanding required to perform particular jobs in the workplace, developed by the government for different industries and competency levels. These standards are used to systematically update the vocational education/training and qualification systems to meet the needs of industries (jobs) and encourage businesses to adopt competency-based HRM (recruitment, promotion, wages, etc.).

    * Developed 1,022 NCS in 24 categories and issued notification (in June 2020)

    Ever since 2015, new NCS have been developed each year for promising industries and new types of jobs to keep up with every paradigm shift in industries (about 10 NCS developed each year).

    Industry Skills Councils have been designated as institutions responsible for developing and improving NCS. A network of businesses, schools and experts participate in the review and updating of NCS on a regular basis.

    Provided tailored consulting services to SMEs (4,634 businesses) from 2015 to 2019 so that they can actively utilize NCS in recruitment, human resource development and management.

    Integrated learning environment for practical training that offers more than manufacturing process-oriented training are being established, such as Korea University of Technology and Education's K-Factory, Polytechnic Learning Factory, and they are planned to be utilized to make convergence education and training more widely available.

  • Second, MOEL brought a paradigm shift in training to support lifelong vocational education and training for all Koreans.

    From 2020, Tomorrow Learning Card system that previously differentiated the unemployed and employed, will be integrated into National Training Card system. With the new system, the training cards will be issued to those who previously did not benefit, such as short-time workers, the dependent self-employed and micro-business owners, thereby addressing the blind spots in vocational training.

    In addition, to reduce constraints of time and space and to support new ways of training through actively deploying e-learning system, MOEL launched and operates Smart Training Education Platform (STEP) from October 2019.

  • Third, MOEL seeks to enhance vocational skills development system and governance to improve the quality of vocational training.

Employment Policy for Vulnerable Groups

  • With the national strategies of gender equality and respect for labor, the government aims to expand jobs for women, with a focus on heeding voices from the ground.

    The government also aims to enhance the economic growth potential and realize a fair society free of discrimination by taking such measures as creating a non-discriminatory employment environment, preventing career breaks due to childbirth or childcare, and promoting women's reemployment.

  • Expanding female employment is a key means of realizing a non-discriminative fair society through gender equality and respect for labor, one of the new government's national strategies. It is also a very important challenge directly related to the economy's growth potential especially in a low-fertility and ageing society.

  • Although female employment in Korea has been increasing in quantity, it is still low compared to the OECD average and male employment. Women experience career breaks largely because of childbirth or childcare, resulting in an M-shaped curve of female labor force participation.

  • In response to such issues, the government is faithfully carrying out its "Sixth Basic Plan for Gender Equality (introduced in December 2017)" to create a better work environment for women.

    To create a discrimination-free work environment for women, establishments subject to affirmative employment action shall be expanded to include all regional public institutions and agencies, and Smart Labor Inspection is planned to be conducted on 700 establishments by using relevant information from National Health Insurance Service and Employment Insurance.

    The government is planning to raise maternity leave benefits (from 1.6 million won to 1.8 million won per month), parental leave benefits (maximum of 1.2 million won to 1.5 million won per month, for the first three months) and bonus paternity leave benefits (from 2 million won to 2.5 million won per month).

    In addition, as demonstrated by the newly established childbirth benefit system for workers not covered by employment insurance (total of 1.5 million won), and a system in which the government covers the cost of paid paternity leave for SME employees (for 5 days), the government is committed to ensure that there are no underserved population. in terms of maternity support.

    In addition, subsidies provided to businesses that establish workplace childcare facilities will be significantly increased, especially for SMEs. As to provide support to working parents employed to SMEs or micro-businesses, more public childcare centers (10 centers) will be established near residential areas.

  • Youth employment challenges continued due to low demand for young people in the labor market, skills mismatch, and people in their late 20s starting to enter the labor market in earnest.

    • Accordingly, MOEL created quality jobs for young people and supported their self-directed job-seeking activities. In addition, to abolish unfair practices in hiring and recruitment process, Youth Employment Measures were announced in March 2018, a product of inter-ministerial cooperation, and follow up measures are underway.
    • Strategies that involve providing bold incentives are being implemented for example, reducing the income gap between young people employed by large businesses and SMEs through providing support for young people who find work at SMEs, providing incentives to businesses that hire young job-seekers, supporting young people to start their own businesses, and strengthening support for "job first-education later" programs.
    Government policies and programs for young people

    (Skills development)

    Before getting employed: Job search promotion subsidy, talent development for the Fourth Industrial Revolution

    After getting employed: Provide support for universities that offer courses exclusively for people who enter labor market first and seek higher education later, established scholarship for those who "work first, study later"

    (Finding employment)

    Businesses: Package support including Additional Youth Employment Subsidy Program, Job Creation Tax Credit, Improvement of R&D system

    Young people: Tomorrow Mutual Aid Program for Young Employees, Income tax reduction for young SME employees (by 90 percent for five years), low interest loan for house rent deposit

    (Starting a business)

    Before starting a business: Success repayable loan program promoting innovative start-ups, start-up voucher program for start-ups with innovative technologies

    After starting a business: Newly established a voucher program to support businesses (accounting, tax, labor, patent, etc), post-TIPS business scale-up fund

    The government is making efforts to expand job opportunities for young people with its targeted policies.* In particular, the government actively implements Additional Youth Employment Subsidy Program and expanded Tomorrow Mutual Aid Program for Young Employees. The government also initiated Job search promotion subsidy, which provides 500 thousand won a month up to 6 months for young job-seekers who conduct self-directed job search.

    * Additional Youth Employment Subsidy Program: SMEs hiring young people as regular employee can receive a subsidy of 9 million won per year for up to three years

    * Tomorrow Mutual Aid Program for Young Employees: Young SME employees can get government support to accumulate wealth (2 Year plan: 16M won or 3 Year plan: 30M won)

    * Job search promotion subsidy: Young job-seekers who conduct self-directed job search can receive a subsidy of 500 thousand won per month for up to 6 months

    The government also established a plan to help fair recruitment practices take root and measures to promote them in the private sector (in November 2019), laying the foundation for merit-based recruitment without discrimination in the public sector and promoting adoption of fair recruitment practices for the public sector by revising the Fair Hiring Procedure Act (in July 2019), prohibiting forcing employment, etc.

  • The government announced “Reinforcement measures for ladder of hope for the youth” in cooperation with relevant ministries in July 2019, in an effort to strengthen measures to improve the perceived difficulties felt by young people after listening to their voices.

    With the announced reinforcement measures, the government seeks to address every blind spots in its policies targeting young people, creating more quality jobs. It will also enable the government to pursue policies related to everyday lives of young people from housing, education to livelihood of vulnerable groups, ensuring that young people can feel the actual benefits from government policies.

    Government policies and programs for young people

    (Job) New Job Making Lab, expand exclusive loans for young entrepreneurs, SME Clean Up program where SMEs hiring young people can get subsidy to renovate their facilities

    (Housing) Pursue building public housing facilities, share-houses near public transportation stops, low interest loan for house rent, etc.

    (Education) Expand scholarship for those who "work first, study later," increase subsidy for programs that connect highschool education to workplace

    (Vulnerable groups) Establish savings account for young people, revive Sunshine Loan, etc

  • In 2020, the COVID-19 employment shock significantly affected young people, who have experienced declines in the number of the employed (-195,000 as of July 2020).

    In response, the government is making best of its efforts to support youth employment, for example by expanding the budget for policies and programs for young people* and newly establishing support programs targeting young people**.

    * Doubled the number of recipients of Youth Job Search Promotion Subsidy (from 50,000 persons→100,000 persons)Increased the number of participants for Youth Employment Success Package Program (50,000 persons→130,000 persons)Increased the budget for Additional Youth Employment Subsidy Program (+ 435.1 billion won)

    ** ▴(Support program for jobs in IT-related fields for young people) The program provides a subsidy (to +60,000 persons) when micro-businesses and SMEs hire young people in IT positions ▴ (Support program for young people’s work experience) The program provides a subsidy to cover for part of young people’s salary when SMEs hire young people as part-time workers (+50,000 persons).

Employment policy for the elderly and the disabled

  • Korea's demographic structure is changing, becoming an aged society (a society in which the population aged 65 or older exceeds 14 percent of the total population) in 2018, and projected to become a super-aged society (a society in which the population aged 65 or older exceeds 20 percent of the total population) by 2025.

    As people in their 50s and 60s make up a large portion in the working-age population, fostering an enabling environment for them to remain part of active workforce and work longer in the labor market, and supporting their reemployment have emerged as a challenge.

  • Incentives for businesses that support older people to stay longer in their "main jobs" have been expanded.

    A support policy is newly established for businesses that adopted Continued employment policies (reemployment after an employee reaches retirement age, abolishment of retirement age, raising the retirement age) to receive a monthly subsidy of 300 thousand won per elderly worker from 2020.

    In addition, the amount of subsidy for hiring those aged 60 or over is raised from a quarterly subsidy of 240 thousand won to 270 thousand won per worker.

  • The government strengthened support for reemployment support services for the elderly to get them ready for a career change so that they can continue to work in the labor market.

    As the National Assembly passed the revised "Act On Prohibition Of Age Discrimination In Employment And Elderly Employment Promotion", it will become mandatory for an employer with more than 1,000 employees to provide reemployment support services to an employee who has to involuntarily leave current work and opt for a career change from May 1st, 2020.

    In 2019, the "Lifelong career planning service," that helps people design their future based on their career paths, was provided to 32,514 people.

    In addition, the government is continuing to expand incentives for employers hiring elderly citizens and to increase direct job offerings for the elderly by exploring suitable jobs for them.

  • In May 2019, the employment rate of people with disabilities stood at 34.9%, lower than the overall employment rate (of 61.5%), but compared to the previous year (of 34.5%), the figure increased by 0.4%p.

    The employment rate of people with disabilities calculated according to international standards (the employment rate of people with disabilities aged 15-64) was 50.0% as of 2019, which is above the OECD average (of 47.6%), close to that of Germany (51.5%), and higher than that of Japan (44.2%), countries that have a mandatory employment quota for people with disabilities.

  • The government strengthened support to maintain employment for people with disabilities, a vulnerable group in the labor market, in consideration of the employment crisis spurred by COVID-19 in 2020.

    In calculating the penalty for not employing the disabled, the payment period in which the benefits for suspension of work were paid during the period in which infectious disease risk alert was issued for COVID-19 are included in the period of basic wage payment.

    MOEL allowed overlapping payment of Employee Retention Subsidy and Subsidy for the Employment of the Disabled at the same time. This was to relieve the burden on employers with many employees with disabilities to retain their employees even when they are temporarily suspending their businesses due to COVID-19.

    In order to help sectors whose employment is most at risk due to COVID-19 overcome the crisis, MOEL also deferred payment of the penalty for not employing the disabled, and granted deferment of disposition on default for the designated Special Employment Support Sectors.

  • MOEL announced “Measures to strengthen employment policies tailored to people with disabilities,” (in May 2020) which contain services tailored to meet the needs of support recipients at every stage of life·for different types of disabilities.

    MOEL raised employment promotion subsidy for people with disabilities to be up to 800,000 won from 2020 to promote their employment, and expanded support for helpers (3,000 helpers → 5,000 helpers)·assistive engineering instruments (10,000 instruments → 11,000 instruments) to support stable employment of people with disabilities.

  • Moreover, the government is continuously expanding infrastructure for employment services to foster talent (pursuing to newly establish Korea Research Institute for Vocational Education and Training in the metropolitan area, establishing more training centers for people with developmental disabilities*).

    * The number of training centers for people with developmental disabilities have increased from 13 in 2019 → to 19 in 2020

    In addition, as it became mandatory by the law in 2018 for employers to provide education on having disabled colleagues, the government provided policy support to help effective compliance such as training of professional instructors, designation of educational institutions, development and distribution of educational content, promoting public awareness on the obligation to provide such education, provision of free instructors to lead the educative session, compliance monitoring, etc.