Posted September. 08, 2008 08:27,
A steelmaker in Shiheung, Gyeonggi Province, is of moderate-size with annual revenue of 150 billion won. With the Chuseok holidays coming up, the company is worried that five college graduates whom it hired in the first half of this year will soon quit.
Last year, all of the companys new recruits left within two weeks after getting the Chuseok bonus, apparently attracted by big-name companies that announced plans to hire more workers in the second half. In Korea, large enterprises recruit college graduates through mass open screening offered once or twice a year.
Weve drastically cut on-site training at production lines for college graduates. We dont make them work hard and instead provide abundant educational opportunities. Still, barely half of them stay for the first year, said a senior human resources staff of the steelmaker.
A study has found that for each college graduate who lands a job, 26.3 did not. Of those who find work, however, 27.9 percent leave their jobs within a year. Small and medium-size businesses are the hardest hit, with a third of new employees resigning within a year.
The Korea Employers Federation polled 345 companies with 100 employees or more, finding that for every 100 job-seeking college graduates, only 3.8 succeed and only 2.1 end up staying at their jobs.
The average non-acceptance rate was 23.7 percent (31.9 percent for smaller companies and 19.1 percent for large companies), and turnover within a year was 27.9 percent (36.6 percent for smaller companies and 21 percent for large companies).
The high rate of youth unemployment is driving college graduates to submit applications to wherever they can without considering their interests and career prospects, which in turn lead to high turnover, said the federations head researcher Kim Dong-wook.
Given that most businesses spend the early period of employment on training new hires, this trend puts a heavy burden on companies.
When the Korea Federation of Small and Medium Business conducted a survey on 296 small and medium-size companies on their second-half recruitment, 57.1 percent said they will hire but 87.9 percent said they expect trouble hiring.
Many small and mid-size companies prefer experienced people over recent college graduates and the loyal over the capable because of high turnover, the survey said. Korea has no middle-grade companies or small but strong businesses mainly because college graduates shun working for smaller companies.
Large companies that can afford to use several strategies to retain new employees. SK Energy treats parents of new hires to a hotel restaurant when their children finish training. Hanjin Shipping will send fruit baskets to new employees before the Chuseok holidays.
Energy giant Samchully puts top priority on screening out those who seem likely to leave soon. Those who pass the interview get a briefing from the CEO on the companys vision.
Dong Hwa Industrial subsidizes concerts and parties for new recruits.
The mentor system, which are used by SK Telecom, LG Electronics and Korea Exchange Bank, and sending thank-you letters to parents of new employees, as done by Daewoo Shipbuilding & Marine Engineering and GS Caltex, are also popular means to retain new employees.