The average annual salary of Naver employees exceeded 100 million won for the first time last year. The average annual salary was 12.48 million won, an increase of 21% from the previous year. Employees are entering the Naver headquarters building in Bundang, Seongnam, Gyeonggi-do. Reporter Huh Moon-chan [email protected]
There is a cataclysmic shift in the wage rankings of large corporations. The untact craze brought about by the novel coronavirus infection (Corona 19) is the impact that led to the war for recruiting software developers. The average annual salary of employees such as Kakao, Naver NCsoft, a leading tech company, surpassed 100 million won for the first time last year. The annual salaries of large traditional companies such as SK Energy, which occupied the’salary king’ position in 2019, and Hyundai Motor Company, Samsung C&T, and Lotte Chemical have begun to decline.
As a result of analyzing the average annual salary of 20 major conglomerates submitted by the Korea Economic Daily by the 19th, the average annual salary of employees of BBIG (battery bio internet game) companies such as Naver Kakao NCsoft, Celltrion, Samsung Biologics, LG Chem, Samsung SDI, etc. was last year. It increased by 6-35% compared to the same period. The annual salary of IT (information technology) companies has risen significantly. The average annual salary of Kakao employees last year was 180 million won, a 35% increase from the previous year. NCsoft (15.5 million won, 22%) and Naver (12.48 million won, 21%) also joined the ranks of 100 million won in annual salary.
The average annual salary of these three companies is closely following Samsung Electronics and SK Telecom, which have been at the top of the list for a long time. The average annual salary last year was 127 million won for Samsung Electronics and 121 million won for SK Telecom. A management official said, “As the borders between industries are falling, platform companies that have expanded their territory are attracting excellent manpower in the industry with their’unprecedented salary’ as a weapon.” Samsung Electronics and SK Telecom employees average 12 years of service, while Naver Kakao NCsoft averages only 5 years.
SK Energy employees, who received the most annual salary among large domestic companies, could not avoid Corona 19. Due to the plunge in international oil prices, SK Energy recorded an operating deficit of close to 2 trillion won last year. Last year, the average annual salary of SK Energy employees recorded 121 million won, down 8% from the previous year. The average annual wage of Hyundai Motor Company’s employees also decreased by 8% to 88 million won. In 2019, the average wage increased to 96 million won, but it plunged again due to the effect of Corona 19. Hyundai Motor Company paid employee stock ownership when the scale of incentives decreased compared to the previous year due to Corona 19 last year.
Kim Yong-chun, head of the employment policy team at the Korea Economic Research Institute, said, “The boundaries between industries are collapsing, but the development and education of talented people cannot follow it, and a’development manpower shortage’ is appearing. It is happening.”
Ransom soaring due to lack of developers… Kakao annual salary increases by 35%
Short service platform and game companies received more than 100 million
Coupang opened a new developer’Era of 60 million won in initial salary’ last month. A 50 million won bonus was offered for hiring a job with experience in development for 5 years or more. Nexon and Netmarble announced that they would increase the annual salary of all employees by 8 million won to protect the’house rabbit’. Then, Krafton, a game company, raised the annual salaries of the developer and non-development workers by 20 million won and 15 million won, respectively. The starting salary for a developer was 60 million won based on new college graduates. NCsoft also added. An annual salary increase of 13 million won + α for the developer group was announced, and 10 million KRW + α for the non-development group. CEO Taekjin Kim also paid 8 million won for’special incentives’. The upper limit on the initial wages for new college graduates has also been removed. The starting salary of 55 million won for the development workers is the lower limit. It was analyzed that the’serial wage increase’ of the game industry was to prevent the turnover to’Nekarakubae’ (Naver, Kakao, Line, Coupang, Baedal’s people), which is known to have good developer treatment.
○Coupangbal’s wage increase
In line with the changes in the industrial structure, the employment structure in Korea is changing from the Japanese-style annual supply system to the American-style bonus system. In this process, differences of opinion between management and employees are also growing. This is because there is no sharp answer between the employment system, which provides exceptional incentives while dismissal is relatively free, and the annual supply system, which emphasizes seniority and guarantees retirement age.
Complaints from employees of information technology (IT) manufacturing companies are growing. Yang Joon-mo, professor of economics at Yonsei University, said, “Game and platform companies are business structures that can create great added value even with individual small ideas, but traditional manufacturing companies have a lot of dependence on the entire company’s capital devices and systems. Compared to small platform and game companies, manufacturing companies with large and complex organizations are having difficulty in improving the wage system in consideration of seniority and inter-departmental characteristics.”
○ Influence on wage negotiations
Following SK Hynix, where labor and management clashed over the incentive payment system, Samsung Electronics’ labor and management are also experiencing difficulties in wage negotiations this year. It is reported that the management insisted that the wage increase rate this year was around 3%, and the labor side was around 6%. Last year, Samsung Electronics’ wage increase rate was 2.5%. According to an analysis, the dissatisfaction of Samsung Electronics employees is that the relative deprivation felt by the number of employees moving to these companies due to the serial wage increase in the platform and game industry has increased. An employee of Samsung Electronics’ wireless business unit said, “The news that the executive in charge of artificial intelligence (AI) received 1.5 times the annual salary and received a stock option (the right to buy stock) and moved to Coupang, and many employees who had been working with pride as’Samsung Man’ were shocked. “It is the reason why the response comes out asking whether the compensation should be properly received in the midst of competing with the emerging IT platform industry.” The characteristics of millennials, who have a strong desire to be rewarded for their contributions, also have an impact.
The situation is similar for LG Electronics. The average salary per employee listed in the business report was 86 million won last year following 2019 (86 million won). Last year, LG Electronics recorded a record high. The labor union of LG Electronics and LG Electronics has set a wage increase rate of 9% this year. It is the highest rate of increase since 2000. It is analyzed that the judgment that appropriate compensation for performance should be made in order not to be deprived of excellent workforce in a situation where the boundaries between industries are collapsing.
○ The wage gap widens even within large corporations
As Corona 19 accelerates industrial paradigm shift, manpower mismatch is intensifying. In this process, wage gaps are widening among large companies. Companies that were hit directly by Corona 19 have stagnated or sharply reduced their salaries. The average annual salary of Korean Air employees who went on long-term paid and unpaid leave as the sky was blocked was 68.19 million won, down 16% from the previous year, and Hotel Shilla, which recorded the first loss since its inception last year, was 50 million won, down 15%. Seong Tae-yoon, a professor of economics at Yonsei University, analyzed that the shutdown and reduction of working hours caused by Corona 19 would have had a direct impact on the wage reduction of corona-damaged companies.
Jae-yeon Ko/Hankyung Economic Daily [email protected]