More Koreans Work Past Retirement Age

Hwang Han-heum, 58, of Daewoo Shipbuilding and Marine Engineering (DSME) Okpo Shipyard Assembly Team 3 retired late last year, but is still working in his field. He signed a contract with his company to delay his retirement by a year.

DSME rehired 145 out of the 160 production sector employees who retired last year for an extra year.

Hyundai Heavy Industries, whose flagship work is shipbuilding, rehired 160 retirement-age workers this year. a huge increase from 10 such hirings last year.

The number of “extended workers” who continue to work at the same company after retirement is growing. The trend is spreading because companies benefit from securing additional expert labor, while employees enjoy extended working lives.

Skillful Workers are in Demand-

Hwang is in charge of processing the bending of the metal used in shipbuilding from stem to stern.

His job requires a high level of expertise--at least 10 years of experience in the field--which is why his company needs him.

Others who continue to work for similar reasons are Lee Yong-man, 60, who directs the cold rolled steel operation process at Hyundai Hysco’s Dangjin plant, and Kwon Young-jong, 59, in charge of the crane facility signaling work at Doosan Heavy Industries. They both have decades of experience in their respective fields and are continuing to work after retirement.

This increasing extended worker trend is not limited to manufacturing.

Korean Air and Asiana Airlines are keeping post-retirement age (55 years old) pilots for four or five more years in the form of non-regular workers. As of January this year, Korean Air has 73 out of 1,826 pilots and Asiana has 70 out of 840 who are continuing to fly after retirement.

A Dilemma: Securing Human Resources or Bearing Costs-

Last year, the over 540 companies that gained from this system were mostly small- and medium-sized companies (SME) or micro-enterprises.

Rehiring retired workers can be both useful and burdensome for large companies. While SMEs make full use of this system, large companies with relatively high wage levels rarely rehire workers for more than a year due to labor costs.

However, as society rapidly ages, using older workers is becoming unavoidable. Experts point out there is an urgent need to find ways to lower the burden on large companies.

Korea Development Institute researcher Kim Yong-sung said, “To make good use of retired workers, companies must be free from the cost burden. The workers’ hierarchy should be adjusted to center around performance rather than employee seniority.”

Experts emphasize that “one of the solutions could be introducing a ‘peak wage system,’ in which the pay of near-retirement workers is gradually lowered.”

Hyo-Lim Son aryssong@donga.com swon@donga.com