A wave of labor union formations is sweeping the IT services industry. This month, after Samsung SDS and Hyundai AutoEver, Shinsegae I&C launched its first union since its founding. Until now, IT services corporations centered on developers and office workers had been considered a sector where union organizing was relatively inactive. But since the start of the year, the eight-figure performance bonuses in the semiconductor industry became a point of comparison, fueling members' dissatisfaction with compensation and evaluation systems, which analysts say led to union formations.
◇ Three major IT services affiliates launch first unions since founding
On the 10th, according to the Shinsegae I&C labor union, the union received a certificate of union establishment from the Gangnam District Office in Seoul on the 8th and began official activities. The union is affiliated with the Federation of Korean Trade Unions' National IT Office and Service Workers' Federation. Upon launch, the union presented as key tasks guaranteeing members' job security, establishing fair and rational performance-based compensation, building transparent decision-making and a healthy labor-management culture.
The union said, "We were established to create a healthy organizational culture in which the company and its members grow together by ensuring members' job security and fair compensation systems amid a rapidly changing IT industry environment," and added, "Our role is to create a work environment where members can stably demonstrate their capabilities and, in the long term, enhance the company's technological competitiveness."
Earlier, Samsung SDS and Hyundai AutoEver also launched their first labor unions since founding. The Samsung SDS union was organized as a branch under the Samsung Group cross-corporation union, held its inaugural general meeting on the 5th, officially launched on the 6th, and began recruiting members. Within a day of its launch, more than 5,800 people applied to join, and the union declared it had secured a majority of members. This is evaluated as the fastest case of securing a majority among unions in Korea's IT industry.
Behind the launch of the Samsung SDS union was an overhaul of the bonus system. The company pursued a plan to pay part of the bonuses—previously paid in cash—in company stock at around 20% of annual salary, but employees pushed back, citing uncertainties from stock price fluctuations and exclusion from severance pay calculations. The vote on the bonus overhaul was extended once due to continued friction, and during this process the union was launched.
At Hyundai AutoEver, the news of the union's launch became known through a companywide notice on the 8th. The union launched as the Hyundai AutoEver chapter under the Korean Chemical, Textile and Food Workers' Union. Reportedly, a combination of factors drove the formation, including a compensation system seen as mismatched with results amid a trend of reduced bonuses, distrust of some personnel and evaluation systems, and changes in the work environment such as the end of remote work.
◇ The IT services industry has changed… "Union response will grow"
The successive launches of unions at IT services corporations are interpreted as a signal that the workforce structure and organizational culture of the large system integration (SI) sector are changing. These corporations, as large SI affiliates, have been responsible for stably operating group companies' internal IT systems and core data. Having maintained stable work environments and compensation systems, and being largely white-collar organizations centered on developers and office workers, they had been assessed as having little perceived need for unions.
However, growing dissatisfaction with bonuses, evaluation systems, and job security has been spreading moves to demand collective bargaining. In particular, the payment of eight-figure bonuses at SK hynix and Samsung Electronics served as a key catalyst for building consensus on the need to establish unions. As gaps in bonuses widened by sector and by corporations within large groups, analysts say moves have grown to resolve dissatisfaction with evaluation and compensation systems through labor-management bargaining.
In addition, as the spread of artificial intelligence (AI) and an economic slowdown push corporations to tighten expense efficiency, the rise of performance-centered HR systems and reorganizations is also cited as a backdrop spurring union organizing. In fact, at Hyundai AutoEver and Shinsegae I&C, not only compensation systems but also personnel evaluation standards and unilateral organizational reshuffles are identified as major reasons for establishing unions. As a result, there is an outlook that labor-management communication capabilities will become even more important for IT services corporations.
Kim Sung-hee, a professor at the Korea University Graduate School of Labor Studies, said, "As AI spreads, work and organizational redeployments increase, and in some cases even the possibility of restructuring is raised, the importance of labor unions will grow in the IT industry as well," adding, "When the economy is strong, bargaining centers on bonuses; when the economy is weak, bargaining centers on job security and restructuring, and the trend to respond through unions will continue to spread."