78 Percent of Companies Have No Hiring Plans in the Last Quarter of This Year

77.5 percent of all companies have either no hiring plans or have not decided whether or not to hire new employees over the last quarter of this year.

Such a percentage has continuously increased from the last quarter of 2002 and, in addition, the Business Survey Index (BSI) steadily decreased, which can be interpreted as a continuing dismal job market.

According to “Outlook on Employment Trend” published by Ministry of Labor yesterday, which is based on a survey targeting 4,444 companies with more than 5 employees, 2944 companies (66.2 percent) have no hiring plan during the last quarter of this year and 501 companies (11.3 percent) have not decided yet.

This is the highest percentage since the second quarter of last year. On contrary, only 999 companies (22.5 percent) said they had plans to hire new employees

Companies which had hiring plans accounted for 30.9 percent in the second quarter of last year. The percentage slightly increased to 32.3 percent in the third quarter and decreased to 30.2 percent in the last quarter of 2002. This decline continues throughout this year: 29.2 percent in the first quarter, 27.2 percent in the second quarter and, 23.6 percent in the third quarter of this year

Compared to the previous quarter, almost all industries have shrunk their hiring plans: manufacturing industry by 2.0 percent, entertainment, culture, and sport industries by 8.0 percent, mining industry by 6.9 percent, education service industry by 3.6 percent, and real estate and lease industry by 3.4 percent.

As reasons for hiring new employees, 77.5 percent of companies said it was due to vacancies created by leaving former employees, 12.9 percent of companies pointed to growing corporate operations, and 5.8 percent of companies mentioned expanding investments on corporate equipment.

The Business Survey Index on the prospect of employment in the last quarter of this year marked 105.1, which has been decreasing since the second quarter of last year. This is interpreted that companies are directly influenced by the current domestic recession.

The BSI on the prospect of employment is a result of companies’ responses to the question, “Do you think employment rate will increase compared to the previous quarter?” A figure above 100 means the majority of answers were positive. And the figure below 100 means the majority of answers were negative.

Manufacturing companies with less than 300 employees predicted a healthy job market while holding 110.7 BSI value, and medium-sized companies with less than 500 employees and large-size companies with more than 500 employees expected a decline in employment opportunities, while holding a 89.6 and 98.8 BSI values, respectively.

The BSI on the prospect of employment marked 114.2 in the second quarter of last year, 114.1 in the third quarter of last year, 111.5 in the last quarter of last year, 112.7 in the first quarter of this year, 110.4 in the second quarter of this year, and 105.5 in the third quarter of this year.

Kyung-Joon Chung news91@donga.com