Clipart Korea
Rehiring of retirees who have passed the mandatory retirement age is rising rapidly. Regardless of debate over extending the retirement age, companies are already rehiring one in two retirees, data showed.
According to the “Supplementary Survey of the Business Labor Force Survey” that Rep. Kim Wi-sang of the People Power Party received from the Ministry of Employment and Labor on the 10th, 171,026 of the 421,474 businesses with a retirement system in place, or 40.6 percent, operated a rehiring system last year.
The share of businesses operating a rehiring system, which stood at 24.1 percent in 2020, rose 16.5 percentage points in five years to top 40 percent for the first time.
Among companies that adopted a rehiring system, the rehiring rate of retirees reached 47.8 percent last year, up 6.5 percentage points from 41.3 percent the previous year. This means about one in two retirees is being rehired.
Companies are active in rehiring because of a chronic labor shortage. A, the head of a metal processing firm in Ansan, Gyeonggi Province, recently rehired two skilled workers who had reached retirement age as contract employees.
Still, differences by industry were clear. The share of workplaces operating a rehiring system was highest in manufacturing at 61.6 percent, followed by transport and warehousing (61.0 percent), accommodation and food service (57.7 percent), construction (53.8 percent), and business facility management, business support and rental services (51.3 percent).
Rehiring rates also exceeded the overall average (47.8 percent) in manufacturing at 58.7 percent and in transport and warehousing at 48.0 percent.
Dependence on elderly workers is rising rapidly, particularly in machinery and metal manufacturing. According to the Korea Employment Information Service’s “Study on the Job Transition of the Machinery and Metal Manufacturing Industry,” the share of workers aged 60 and older in metal manufacturing rose from 11.4 percent in the first half of 2020 to 17.7 percent in the second half of last year. By contrast, the share of those aged 30 to 39 fell from 22.0 percent to 19.3 percent.
In machinery manufacturing, the share of those aged 60 and older rose from 8.1 percent to 13.9 percent over the same period, while the share of those aged 15 to 29 plunged from 15.2 percent to 10.1 percent.
By contrast, rehiring was not active in the finance and insurance industry and the information and communications industry. The share operating a rehiring system stood at just 21.7 percent in finance and insurance and 24.2 percent in information and communications. Rehiring rates also fell below the average, at 22.2 percent in finance and insurance and 39.9 percent in information and communications.
The more an industry has quality jobs preferred by young people, the lower its use of rehiring. For this reason, some point out that a uniform extension of the retirement age could instead intensify job competition between generations.
Rep. Kim said, “As industries overall are naturally moving toward rehiring, businesses should be allowed to choose the form of continued employment by industry and by company.”