The Korea Association of Small and Medium Business Policy Studies and the Korea Federation of Small and Medium Enterprises held an SME workforce forum on the 18th at the Korea Federation of Small and Medium Enterprises in Yeouido, Seoul, under the theme of "Improving the working hours system to strengthen the competitiveness of small and medium-sized enterprises."
Jeon Jong-geun, president of the Korea Association of Small and Medium Business Policy Studies, said in opening remarks that "the issue of shorter working hours is a difficult task that must meet two goals: improving workers' health and quality of life, and maintaining the competitiveness and productivity of corporations," adding, "It is necessary to establish a working hours policy that takes into account the situation of small and medium-sized enterprises experiencing labor shortages."
Oh Gi-ung, executive vice chairman of the Korea Federation of Small and Medium Enterprises, said in a welcome address, "In recent years, Korea's labor market has been undergoing an unprecedented upheaval, including low birthrates and an aging population, the spread of artificial intelligence (AI) technology, and various institutional changes," adding, "For small and medium-sized enterprises, which account for 80% of employment, to successfully adapt to the changing labor market, it is necessary to continuously secure global competitiveness and the growth engines of startups by improving the working hours system."
Noh Min-seon, Deputy Minister at the Korea SMEs & Startups Institute (KOSI), who delivered the keynote presentation, announced analysis results showing that over the past 10 years the share of workers in small and medium-sized enterprises working 36 hours or less per week has risen sharply, and total working hours have declined significantly compared with major countries.
According to Deputy Minister Noh's analysis, among regular employees at small and medium-sized enterprises (with no fixed term of employment or with contracts of at least one year), the share working 36 hours or less per week increased by 17.6 percentage points (p), from 9.3% in 2014 to 26.9% in 2024, 1.7 percentage points larger than the increase at large corporations over the same period (15.9%, 8.9%→24.8%). In contrast, the share of regular employees at small and medium-sized enterprises working 53 hours or more per week fell by 13.0 percentage points, from 18.8% in 2014 to 5.8% in 2024, 1.5 percentage points larger than the decline at large corporations over the same period (11.5%p, 15.7%→4.2%).
In addition, Korea's average annual working hours fell by 210 hours, from 2,075 hours in 2014 to 1,865 hours in 2024, marking the largest decrease among OECD countries. Korea's 10-year decline in working hours (210 hours) is 176 hours greater than the United States (34 hours), 98 hours greater than Japan (112 hours), and 158 hours greater than the OECD average (52 hours).
Deputy Minister Noh said, "The working hours system needs to be improved in a way that respects diverse choices by labor and management at small and medium-sized enterprises under the principles of work-life balance and securing the right to health." Deputy Minister Noh proposed as key tasks the introduction of a Korea-style white-collar exemption that excludes key workers at venture startups engaged actively in innovation from working hours regulations, and the expansion of tax incentives to activate performance-based rewards at small and medium-sized enterprises, such as performance-based stock and employee invention compensation.
In a general discussion moderated by Sogang University emeritus professor Lim Chae-woon, Director General Kwon Sun-jae of the Ministry of SMEs and Startups, Lee Myeong-ro, head of the human resources policy division at the Korea Federation of Small and Medium Enterprises, Professor Choi Jang-ho of Sogang University, Professor Lee Jong-gwan of Yonsei University, and Professor Eom Sang-min of Kyunghee University shared a range of opinions on ways to improve the working hours system for small and medium-sized enterprises.