81 applicants per job expected in the second half of this year

It will become more difficult for young people to find a job in the second half of this year. According to the research of the Association of Korean Industries, 65 percent of 500 major companies in South Korea have not developed hiring plans for college graduates or plan not to hire any in the second half of this year. One-fourth of companies with hiring plans decided to reduce hiring size compared to the previous year. The competitive rate forecasted by companies is 81 applicants per job, which is higher than last year’s 77 to one.

As companies began tightening their belt due to unfavorable external factors, such as slower-than-expected economic recovery and a potential economic crisis stemming from China, they are reducing new hires than initially expected. Large companies, including Samsung, SK, and Hyundai Motor Company, will begin the hiring process for the second half of this year in early September, but their hiring size is smaller than the average year. Job shortage is likely to become prolonged as the use of artificial intelligence, automation, and mechanization are accelerating with changes in the industrial structure.

As the number of jobs is reduced, 1.26 million young people are unemployed after graduating from school, including over 450,000 four-year college graduates. It became hard to find employment opportunities by simply submitting applications. With a labor shortage in the cutting-edge technology sector, such as artificial intelligence, cloud, big data, and nanotechnology, potential applicants often fail to meet training and educational prerequisites. The job mismatch for small- and medium-sized enterprises remains unresolved. Along with companies’ efforts to create quality jobs, customized talent nurturing programs and educational infrastructure expansion are needed.

There is also a bigger need to encourage young people to start their own businesses in the new business sector with a large growth potential to resolve the current issue of job shortage. Start-ups looking for new business opportunities offer opportunities to invest in future growth potential beyond simple employment for salary. In India, with a strong IT foundation, over 20,000 start-ups are created, hiring young people. Over 760,000 people are working in start-ups, and there are over 100 unicorn companies, which refer to start-ups with a corporate value of one billion dollars or more, that were established after 2018.

Many start-ups are struggling in South Korea due to the challenging environment for starting a new business and reduced investment this year. A system for long-term investment and continued support should be strengthened, and regulations that interrupt innovation should be removed. Other measures to promote start-ups, such as giving them second opportunities even after initial failures, should be proactively developed.