hankyoreh

SK Group headquarters in Seoul

As of this year, SK Telecom is eliminating its voluntary retirement system offering departing employees a bonus in addition to their severance pay, and instituting a new Next Career program offering paid leave to employees so they can prepare for their “second act,” including possibly starting their own business. Coming at a time when many working people are feeling increasingly concerned and anxious about their post-retirement prospects in an aging population era, this experiment is both laudable and meaningful.

The Next Career program is designed to help employees who are over 50 years or age or have over 25 years of consecutive service to prepare for their post-retirement life by offering them up to two years of leave time. During that time, employees receive 100% of their base pay and the same educational and medical benefits they enjoyed while working. For employees who are preparing to start their own businesses, a six-month entrepreneurship support program is provided along with six months of post-management once the new business is launched. Once the leave period is complete, the employees will be able to return to their positions if they choose – in other words, they will be allowed to have their jobs back if their business does not work out. Employees are said to have responded favorably to the opportunity to prepare for a new life from a stable footing.

With the rapid progression of South Korea’s aging population trend, people are living longer post-retirement lives. The reality, however, is that many people reach retirement relatively unprepared. In quite a few cases, people use their severance pay to start a business, only to lose it all as their lack of experience and knowledge leads to failure. A vicious cycle has also taken shape as the increasing number of retired people starting their own businesses has resulted in a supply glut. Under these circumstances, it is ideal for corporations to actively support employees in their post-retirement lives. To be sure, this may only be possible in SK Telecom’s case because of its strong performance as a company. But its experiment also holds a number of implications, since not all companies that are doing well financially are following suit.

The SK Group has been engaging in a number of new experiments, with chairman Chey Tae-won stressing a company’s creation of “social value” as something of equal importance to the economic value it yields with its profits. The group is working to identify concrete ways that companies can contribute to addressing societal issues like population aging, political polarization, youth unemployment and pollution. In a recent interview with the US-based economy magazine Forbes Asia, Chey said, “Some might tell us to ‘just make more money,’ but that approach doesn’t work anymore.” He also described efforts to spread social value as “ultimately a matter of pursuing happiness for all of us.” We look forward to a successful SK experiment spreading to all corners of South Korea’s business world.

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