Over 40% of South Korean manufacturers say they need more foreign workers

The survey was conducted by the Korea Enterprise Federation, one of the major business lobbies here, with a total of 615 small and medium-sized businesses with fewer than 300 employees, in August and September.

Of the total, 36.9 % responded in favour of expanding the E-9 visa quota -- currently at 120,000 -- to hire more foreign workers next year, while 58.7 % said this year’s level should be maintained. Only 4.4 % supported a reduction.

Across industries, the manufacturing sector showed the highest support for expanding the quota, at 42.5 %, followed by 21 % in the service sector and 17.2 % in the construction sector. Among “root industries” -- industrial fields related to the infrastructure of manufacturing such as casting and moulding -- the approval rate was 50.3 %.

The manufacturing sector accounted for most of the 120,000 E-9 visas issued this year with some 75,000. Only 3,000 and 1,000 were allotted for the construction and service sectors, respectively.

Respondents who called for an increase in the quota gave an average target of about 151,000, despite the current quota already being a significant increase from 69,000 in 2022.

As well as being more likely to support an increase, businesses in root industries also asked for a higher new quota, at 162,000 visas on average.

According to the survey, 92.7 % of total respondents said they hired foreign employees due to the difficulties of recruiting Korean nationals. Only 2.9 percent cited lower costs and just 1.6 % mentioned a low turnover rate.

Low labour costs may no longer be the key motivation for hiring foreign workers. Responses showed the labour costs for foreign employees, which encompasses expenses for wages, accommodation and social security payments, were higher than those of Korean employees.

The primary difficulty associated with foreign employees on a working level was communication difficulties (53.5 %), followed by increased direct labour costs due to increases in the minimum wage (16.4 %) and cultural difficulties (11.9 %). Multiple responses were allowed.

The most mentioned institutional difficulties were complicated hiring procedures (46.5 %), followed by their short length of stay (31.4 %) and the foreign labour quota (20.7 %).

Some 70 % of respondents said there needs to be integrated management of foreign labourers. The current immigration policies are divided up by government departments here.

Only 47.5 %, however, agreed to the Korean government opening a separate bureau for managing immigration. The government plans to establish a new migrant-related state agency in response to an expansion of the immigrant population, as the current Yoon Suk Yeol administration plans to tackle depopulation with foreign workers.

"The on-site manpower shortage is serious, shown by more than 50.3 % of businesses in the root industries responding there should be an expansion on the number of foreign workers next year," said Kim Seon-ae, head of the labour policy department at the KEF.

"The need for foreign workers is unavoidable as the working-age population is on a decrease," Kim said. "There needs to be a review of policies on foreign workers such as opening an immigration bureau to respond to the imbalance in the labour market and to secure the nation's growth.”

Im Eun-byel

The Korea Herald

Asia News Network