The Korea Association of Management Innovation Small and Medium Enterprises (Main-Biz Association) said on the 20th that the labor shortage at small and midsize companies has intensified into a structural problem, combining an imbalance in workforce composition and changes in the labor market beyond a simple lack of workers.
The association conducted a "survey on the restructuring of the SME workforce and the status of extending the retirement age" of 360 Main-Biz corporations from Mar. 5 to 11. The results showed that the labor supply-demand smoothness averaged 53.1 points out of 100, indicating that overall supply-demand conditions were not smooth.
In particular, the shortage worsened mainly among technical and on-site positions, and corporations with nine or fewer employees showed a marked tendency for prolonged vacancies.
The causes of the labor shortage appeared to result from a combination of external and internal factors. Among external factors, a decline in the youth population (39.2%) accounted for the largest share. Internally, low wages and benefits (38.4%) and the burden of labor costs (34.3%) were cited as major reasons.
Small and midsize companies are responding to ease the labor crunch by expanding new hiring (49.7%) and increasing wages and performance bonuses (35.0%). However, these efforts were often limited to certain departments (32.4%) or remained short-term responses (31.4%), which was found not to lead to resolving structural issues. Accordingly, the effects were also at the level of "some effect" (47.2%) and "short-term help" (28.0%).
Regarding extending the retirement age, 88.6% of responding corporations were in favor, showing high acceptance. The biggest reason for support was the ability to retain the skills and know-how of experienced workers (78.7%). In particular, the intention to introduce an extension of the retirement age was higher if government financial support was assumed.
However, corporations most frequently cited the need to overhaul the wage system (70.0%) as a prerequisite for implementing an extension of the retirement age. This suggests that extending the retirement age is not merely prolonging the working age but should be linked to restructuring wage and productivity frameworks.
Evaluations of government policy were generally positive. Positive assessments (45.6%) of policies to ease labor shortages were higher than negative assessments (14.2%), indicating a certain level of effectiveness. However, relatively lower evaluations appeared in some nonmanufacturing sectors, such as information and communications and professional services, and among corporations with 50 to 59 employees, showing differences by industry and corporate size.
The Main-Biz Association emphasized that SME workforce policy should shift from simply expanding labor supply to focusing on improving workforce structure. An association official said, "In the short term, we need to ease the burden on corporations through support for employment-retention expense, tax benefits, and streamlined administrative procedures," adding, "In the mid to long term, it is necessary to build a sustainable workforce ecosystem by narrowing welfare gaps between large and small corporations, advancing digital transformation, and utilizing skilled foreign workers."