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Shinsegae adopts a 35-hour workweek system without a pay cut

Shinsegae adopts a 35-hour workweek system without a pay cut

Posted December. 09, 2017 07:05,   

Updated December. 09, 2017 08:57


Manager Kim, who works at the Emart headquarters in Seoul, recently had to keep his two kids at a day care center until late evening as his nanny went for a two-day vacation. After finishing work at 6 p.m., he rushed to pick up his children, only to arrive at the day care center well past 7 p.m. His kids waiting for their dad looked all sad and pitiful. “I suddenly felt sorry for my kids. I think most of the two-income families would share the same feeling,” said Kim. Fortunately, Kim would be able to save himself from the concern from next year.

Shinsegae Group announced Friday that it would cut working hours from the current 40 hours to 35 hours a week without a pay cut starting from January next year. There have been similar cases in advanced economies such as European countries, but this move marks the first case for a local conglomerate to adopt the 35-hour working week system. The policy will be adopted by all affiliates of Shinsegae Group, including Shinsegae department store and Emart.

The new system is expected to bring some changes in the everyday life of Kim, who usually worked from 9 a.m. to 6 p.m. He will be able to have a so-called “life with evenings” as he can finish work at five. Early pick up of his children will allow him to save 1.2 million won a month, which has been paid to the nanny for taking care of kids from 5 p.m. to 7 p.m. during the weekdays. On days when his wife picks up the kids, he would have time to enjoy hobbies, such as exercising.

Shinsegae Group says it will allow flexible work hours depending on the types of work. Most of the employees will be subject to “9-to-5” work hours, while some will be able to choose from “8-to-4” or “10-to-6.”

It remains to be seen whether the 35-hour workweek system will be adopted by other industries as well. Many companies are expressing concerns about the government’s plan to cut the current standard work hours from 68 hours to 52 hours a week. Some point out that, unlike retailer Shinsegae, manufacturers do not have the room to introduce a bold and flexible workhour system. Some affiliates of Samsung Group have just recently started pilot testing a “52-hour workweek system” to eval‎uate its feasibility.

In particular, small and medium sized companies are likely to feel burdensome of the reduction of work hours coupled with an increase of minimum wage next year. “While it is desirable to improve the working condition of employees, we are concerned that a reduction of work hours in conglomerates might lead to an increase of work hours in SMEs,” an official at the Korea Federation of SMEs said. On Tuesday next week, the Korea Federation of SMEs will hold an emergency press conference to express their opposition against the government’s plan to cut work hours.

“A reduction of work hours and an increase of minimum wage are taking place all at once. The plans will likely deal a blow to SMEs’ output and performance,” said Wie Jeong-hyeon, a professor of Business Management Department at Chung-Ang University. “There is also a possibility of widening the gap between work hours of conglomerates and those of SMEs.”

Seng-Hyun Kang byhuman@donga.com