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Companies Give Workers Childbirth Incentives

Posted October. 25, 2005 07:25,   


In July, the consumer products company P&G Korea introduced a “Mother’s Room” in its offices located in Gangnam-gu, Seoul. As the name implies, the Mother’s Room is a rest area for female employees who are mothers. The room is about 23 m2 big and is equipped with a refrigerator and a sterilizer so that mothers can store their breast milk to bring home after work. “The Mother’s Room is very helpful as I can rest there when I feel heavy and drowsy,” said seven months pregnant Sun-young Kim, an assistant manager in the marketing department.

Even foreign companies are encouraging employees to have babies-

HanmiParsons, an American construction management firm, offers 500,000 won to all its employees whenever they have a new baby. In addition, the company recently expanded its assistance policy for children’s educational expense to all of its employees.

IBM Korea has introduced telecommuting since this August, and employees can work at home up to three days a week. This new system is particularly popular among female workers with children. Meanwhile, female employees of MSD, a U.S. pharmaceutical company, are allowed to leave an hour earlier than others for a year after giving birth. Korean Air and Asiana Airlines guarantee seven-month maternal leaves to their female flight attendants.

In addition, an increasing number of companies are now adopting in-company day care centers. In the case of SK C&C, it included an approximately 260 m2 big “Evergreen day care center” in its headquarters building in Bundang, Gyeonggi-do, which was completed in August. POSCO has plans to install day care centers as big as 1,000 m2 in Pohang, Gyeongsangbuk-do and Gwangyang, Jeollanam-do by next January.

The government should prepare childbirth measures-

Financial institutions are more actively tackling the problem of the low fertility rate. The Korea Federation of Banks and the Korean Financial Industry Union agreed to introduce “infertility leave” so that infertile female workers can have up to one year’s unpaid leave to receive treatments.

Shinhan Bank and Cho Hung Bank started selling a savings product called “Promise of love,” which gives an additional 0.75 percent interest rates on top of their basic annual rate of 3.0 percent whenever a customer gives birth. Last month, Woori Bank introduced “Beauty Savings” for female customers. If those who applied for the product give birth, they will be given preferential annual interest rates of an additional 0.1 percent and an installment bankbook under the name of the baby with 1,472 won deposited. The words for 1,472 have a similar pronunciation as an idiom meaning “rapid advance.”

Manager Kim Gi-tae of industrial environment team at the Korea Chamber of Commerce said that it is a sort of investment for companies to encourage its employees to have babies because a stronger welfare system can lead to increased productivity.

However, some say that such company measures are only temporary.

“Longer vacations, in-company day care centers and maternity benefits will not be very effective. The government should introduce tax incentives or other measures to change the people’s perception that fewer children is better.” said senior vice president Jo Seong-ha of the labor welfare team at the Federation of Korean Industries.

ssoo@donga.com kimsunmi@donga.com