As debate centered on the National Assembly to extend the mandatory retirement age to 65 has entered full swing, the middle-market sector said "re-employment after retirement" is a common solution to boost corporations' competitiveness and stabilize employment for older workers.
According to the "Survey on continued employment at middle-market companies" released by the Federation of Middle Market Enterprises of Korea (FOMEK) on the 10th, 62.1% of middle-market companies chose "re-employment after retirement" when asked about methods to continue employing workers to ensure corporations' sustainability. The shares answering "extend the retirement age" and "abolish the retirement age" were 33.1% and 4.7%, respectively. The survey was conducted from Aug. 25 to on the 16th of last month on 169 middle-market corporations.
The middle-market sector projected that a uniform extension of the statutory retirement age, currently 60, would increase labor costs (64.5%) and reduce capacity for new youth hiring (59.7%). Responses saying personnel bottlenecks within organizations would worsen reached 41.4%.
Among middle-market corporations, 52.6% continue to employ workers beyond the statutory retirement age, and of these, 69.6% said they use the "re-employment after retirement" approach.
Reasons for re-employment were, in order, "leveraging existing workers' expertise and know-how (84.2%)," "alleviating labor shortages due to difficulties in new hiring (24.7%)," "fulfilling corporations' social responsibility (20.2%)," and "requests from the labor side such as labor unions (14.6%)."
Wages for workers re-employed after retirement were at "90% level" compared with the retirement point for 31.4% and at "80% level" for 23.6%. Among middle-market corporations, 31.4% said they pay "100% or more."
Middle-market corporations said policy support is urgently needed to vitalize continued employment of older people, including "expanded tax benefits (57.9%)," "direct support for labor costs (53.2%)," "enhanced employment flexibility (37.2%)," and "easing the burden of social insurance premiums (36.0%)."
Lee Ho-jun, executive vice chair of the federation, said, "Skilled older workers are the core of corporations' competitiveness, but a uniform extension of the retirement age that is out of step with on-the-ground demand risks damaging corporations' fundamentals by increasing labor cost burdens," and added, "In the AI era, with the landscape of work expected to change significantly, we should seek effective alternatives that broadly encompass social policies—such as expanding training for career changes and re-employment, and strengthening senior welfare—rather than a categorical extension of the retirement age."