hankyoreh

South Korea’s first feature film about the irregular worker issue. (provided by Young Film)

The “eight million irregular worker” phenomenon of the last seven years is the result of hiring practices and strategies by large corporations, recent data show.

The discovery comes at a time when many are calling for greater corporate social responsibility on the irregular worker issue and its resolution.

Last July, the South Korea’s 2,942 companies with 300 or more employees posted their hiring data on Worknet, an employment security information network. The employment information disclosure system was introduced to encourage “pioneering social responsibility and autonomous hiring structure improvements” from the companies.

A Nov. 19 examination of the data for different companies by the Hankyoreh showed strikingly similar percentages of indirect hiring among chaebol, with dispatch workers and subcontractors used in areas ranging from electronics and cars to shipbuilding, construction, and steel.

In the case of electronics, Samsung Electronics had a permanent, directly hired workforce of 97,266, including 96,237 regular workers and 980 on temporary contracts. Another 26,304 employees were indirectly hired “unaffiliated workers,” giving a 27% ratio of unaffiliated to permanent workers.

At LG Electronics, only 751 of the 38,285 permanent workers were on fixed-term engagements. Another 4,081, or 10%, were unaffiliated. SK Hynix had only six temporary workers on staff in a permanent workforce of 21,011, with 4,905 unaffiliated workers, or 23%.

In each case, the number and percentage of directly hired time-limited workers was low, and the percentage of dispatch or subcontractor employment relatively high. Indeed, the data showed nearly all chaebol apart from LG Electronics having a fixed 23-27% percentage of unaffiliated to permanent workers.

A similarly set percentage was also found for individual companies in the assembly and finished car industry. Hyundai Motor had 11,066 unaffiliated workers to 63,937 permanent ones, or 17%. Kia Motor had 4,873 unaffiliated workers to 33,645 permanent ones, or 14%. And the Bupyeong plant for GM Korea had 3,984 unaffiliated workers to 16,843 permanent ones, of 23%. In all cases, the ratio of unaffiliated to permanent workers fell in the 14-27% range.

Similarities were also found between companies in shipbuilding and steel, with the number of unaffiliated workers either far outnumbering or roughly equaling the permanent workforce. POSCO had 18,036 permanent workers and 15,723 unaffiliated ones; Hyundai Steel had 10,807 permanent workers and 11,956 unaffiliated ones.

“Each company and industry makes its own determination as to what percentage of irregular workers represents an optimal balance in terms of performance, and that forms the basis of their hiring strategy,” explained Lee Kwang-ho, head of the employment policy team for the Korea Employers’ Federation.

“For a private company, the shock of institutional regulations like the Fixed-Term Worker Act typically wears off in about three to four quarters,” Lee added.

The overall number of irregular workers in South Korea has hovered between 8.18 million and 8.65 million for the seven years since the Fixed-Term Worker Act was enacted in July 2007. The increase has appeared to level off at times, but the number has been more or less set in stone, with legislation, institutional changes, and labor union struggles failing to put a dent in it.

The recent data now show one possible explanation: identical hiring strategies by chaebol, all of which maintained set percentages of irregular workers through large-scale hiring of “unaffiliated” dispatch workers and subcontractors.

In the past, employers’ groups have pointed to the low percentage of irregular workers hired by companies with over 300 employees as indicating the situation is basically unfixable. They noted that such large companies accounted for just 5.6% of irregular workers in August 2013, while most of the rest were at small workplaces with a staff of 30 or fewer.

But the employment information data now shows that the companies have been breeding grounds for irregular hiring practices.

“Analysis of the data provided by the companies shows that 1,910,000 of the 4,358,000 salaried workers at companies with over 300 employees, or about 43.8%, are irregular workers,” said Kim Yu-seon, a senior research fellow at the Korea Labour and Society Institute (KLSI).

The nearly identical percentages of overall irregular workers - 45.4% of all salaried workers or 8.52 million people as of August, according to KLSI - and irregular workers at large companies suggests that those companies are at the heart of both the problem and its resolution.

By Cho Kye-wan, staff reporter

Please direct questions or comments to [english@hani.co.kr]