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TAE Won-You

Older Workers Need Help, Too

TAE Won-You

June 13, 2012

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The fluidity of the Korean labor market is on a steady upward trajectory, with about 180,000 people per month, or approximately 2.14 million a year, leaving their job. For many of those in their 40s and 50s, returning to the nation's labor pool either voluntarily or involuntarily is the start of a daunting task. It takes someone in their 20s about 5.7 months to find another job. For those in their 40s, it takes 6.3 months and those in their 50s, 8.8 months. Accordingly, the number of unemployed in their 40s and 50s, who are neither ill nor disabled, has risen from 367,000 in 2004 to 571,000 in 2011.

Unfortunately, age discrimination is entrenched just as Korea begins an era of rapid population aging, which is raising concerns about future welfare support for seniors, and a shrinking national workforce caused by decades of low birth rates. The obvious answer to help increase retirement savings and staunch labor shortages is longer employment.

Middle-aged job seekers typically feel out of touch with job market trends so public outplacement services such as career counseling would be especially helpful. However, such services in Korea leave much to be desired, forcing job seekers to rely on personal networking. Only 1% of new employees find a new job through public employment agencies. Inadequate staffing, expertise and service commitment are to blame. Currently, the seven main government-funded employment agencies in Korea provide assistance to only about 236 people each per year.

Outplacement assistance at companies does not plug the service deficiency. The 1997 Asian currency crisis and 2008 global financial crisis highlighted the need for corporate outplacement services when companies restructure or downsize. However, services typically are provided temporarily to minimize friction with labor unions. Only Samsung, POCSO, Korea Telecom and a handful of other large companies have in-house outplacement service centers.

Besides the lack of services, the mindset of middle-aged job seekers is also a major obstacle. They often shun jobs that do not at least match their previous positions and salary levels. According to an internet survey, the most cited reason for failing to regain employment was "a lack of effort," and "overestimating oneself." The middle-aged job seeker must change his/her perceptions and expectations, and reassess the importance placed on matching previous positions and perks.

Equally important is continuous skill upgrading to prepare for departure. Without preparation, a person's marketable value will gradually diminish. As of now, 68.1% of new job seekers in their 40s and 69.2% of those in their 50s begin the process of changing jobs without thinking or planning ahead. Considering the potential income from launching a new business or from a new job later in life, people cannot be lazy about constant self-monitoring. On average, those who switch jobs will do so four times in their life, meaning that it is no longer a sign of defeat or failure when people opt for change.

Mandatory retirement at Korean companies is 55-57 years old, markedly earlier than most countries. Companies should follow their peers in advanced nations, who regularly help older employees plan for their retirement or change jobs through life-planning training programs as for many, "retirement" will simply mean working elsewhere. Companies with more than 5,000 employees should operate a service center that provides constant support for impending retirees who hope to continue working in their field or to take up a new occupation.

Finally, the government must establish a consumer-based system to provide outplacement services, including "one-on-one" support. To encourage people to voluntarily seek public employment and outplacement agencies, the job standards of consultants at these facilities must be enhanced to rival those in advanced countries. Currently, a staggering 44.2% of personnel at the agencies are comprised of freelancers or work on a contract basis. This means that not only are the working conditions unstable for the consultants, they are also unable to broaden their expertise and accumulate know-how, resulting in inefficient and limited service for the consumer.

One of the biggest worries of the older unemployed is being forced to find a job without any professional assistance. Since 2004, those in England 50 and over are appointed personal consultants who provide them with tailor-made support, helping them with everything from writing resumes to enrolling in training programs. Korea should create a similar system. Besides, with about 180,000 new job seekers every month, if one consultant was appointed to every 100, it would create 1,800 service jobs.

This column originally appeared in Korea JoongAng Daily.
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