A view of the IT Valley in Pangyo, Seongnam, Gyeonggi Province, called the’Silicon Valley of Korea’ Based near Pangyo Station, leading IT companies, including Naver and Kakao, are concentrated. Many of the domestic developers build their careers by doing program development here. Hankyung DB
The shortage of manpower for domestic information technology (IT) developers is approaching a serious level. There is even talk of a’disaster’ level. Entertainment companies, fintech companies, and other service companies that have recently engaged in digital transformation (DX) are hiring a large number of related personnel, and the spread of non-face-to-face culture due to the novel coronavirus infection (Corona 19) has increased the manpower shortage. As non-IT companies are also struggling for digital transformation, the’random price’ of developers is soaring.
According to the IT industry on the 22nd, it was confirmed that at least 100 employees of Naver and Kakao have moved to Big Hit Entertainment in the past year. Big Hit is still recruiting manpower in various IT fields such as app development, data analysis, and security. It is known that hundreds of developers from IT companies such as Pangyo, Gyeonggi, which recently moved to Coupang, an online commerce company that announced promotion of listing in the US, were also from IT companies.
Among experienced developers, more and more cases are moving to Toss, a financial startup. An official in the IT industry said, “Big Hit and Coupang have hired IT developers on the condition that they pay more salaries and share company stocks than existing jobs,” he said. “The war to attract domino personnel to be stolen and stolen is intensifying.”
It is also attracting domestic IT manpower overseas. Japanese e-commerce company Rakuten has recruited a large number of domestic blockchain experts. The Rakuten Blockchain Development Team is locally called’Kimchi’. Google and Microsoft (MS) are also looking to hire domestic A-class developers.
The domestic IT industry has an emergency to’protect the manpower’. Naver and Kakao distributed the company’s stock to employees apart from the salary increase. Domestic game companies such as Nexon and Netmarble have recently announced plans to increase their annual salary by more than 10% based on new employees.
Nevertheless, the dissatisfaction with the treatment of employees seems to be growing. This is because they are not treated as much as their status changed. Naver’s founder Hae Jin Hae-jin, Global Investment Manager (GIO), began communicating with employees. On the 25th, the company plans to directly explain how to improve the compensation system. Earlier, the Naver Labor Union argued that “the incentive pay paid this time is below the record-high performance level,” and that “the standards for incentive pay should be transparently improved.”
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Toss, whose number of employees has more than doubled over the past year, is still suffering from a labor shortage. This is because information technology (IT) manpower is extremely short. In the second half of this year, ahead of the launch of a specialized internet bank, it became more urgent to secure related personnel. Toss is considering paying about twice the annual salary of his former job as a condition for hiring a career.
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The domestic IT industry seems to be engulfed in a’war to secure developers’. Even non-IT companies whose main business was not IT, such as finance and entertainment, hired a large number of developers, and the industry even said that’the seeds of IT manpower are dry.
Naver and Kakao have recruited hundreds of new or experienced developers over the past year. Some say that the number of new recruits is the largest ever. There is also an aspect that it is the result of the boom triggered by the Corona 19 incident, but in the background, competition for attracting “taken and lost” domino personnel is also playing a part. Coupang, Big Hit Entertainment, and Toss, which were not normally considered competitors, recently attracted IT manpower, which has become a decisive demand for new personnel. An industry official said, “As the e-commerce and online entertainment business grew rapidly due to the spread of non-face-to-face culture, the demand for developers exploded.” “It is said that this was not the case even during the IT bubble.” The number of employees of Kakao (including affiliates) exceeded 10,000 for the first time last year. This is an increase of more than 20% from a year ago.
‘Start-up level’ companies, whose size has rapidly increased due to the spread of Corona 19, are also one of the channels that suck in developers. HyperConnect, the developer of the video chat service’Azar’, which recently sold for 2 trillion won in Matches in the U.S., and Edutech (education + technology) startup Masspresso, are also planning to publicly hire more than 100 experienced workers this year.
‘Manpower Black Hole’ Coupang and Big Hit
Coupang is the epicenter of the massive chain movement of IT developers, which has recently been referred to as the’Pangyo crisis’. Coupang offered 50 million won as a bonus for joining the company during a career bond last year. Toss promised employees a stock option worth 100 million won (stock option). Big Hit, an entertainment company listed last year, also offered stock options to experienced employees.
Companies”manpower management secrets’ are also getting bolder. Naver has been paying 10 million worth of stock options every year to all employees since 2019. Kakao announced on the 8th that it will offer 10 shares of treasury stock to all employees as a bonus for the first time since its inception. Korean game companies have recently announced plans to increase their salary one after another. Nexon announced on the 1st that it would increase the employee’s annual salary by 8 million won. In terms of the average annual salary increase, it is an unprecedented 13%. Netmarble also joined the ranks of salary increase. It was decided to give all employees an additional 8 million won per year. Recently, it is known that it is planning to increase the annual salary of all employees, including Com2uS and Gameville, by 8 million won. An official in the internet industry explained, “The annual salary of the IT manpower lacking in Korea such as mainnet (independent blockchain network) developers has soared to 500 million won.”
The reason why companies in various industries increase their labor costs is basically due to chronic developer recruitment difficulties. According to the Korea Software Policy Research Institute, a national research institute, the number of manpower shortages in major IT fields such as artificial intelligence (AI) and big data this year is estimated to be 9453. It is an observation that there will be more than 10,000 people next year. In the ‘2019 Software Industry Survey’ conducted by this institute, 47.9% of domestic software companies cited’lack of manpower with the necessary competence’ as a hiring difficulty. An IT industry official explained, “With the impact of Corona 19, companies in almost all industries have started digital transformation, and the developer shortage has become a serious disaster.”
Reporter Juwan Kim/Jinwoo Park/Sooyoung Sung [email protected]