South Korea’s liquid filtration system developer Neos Corp. has seven employees, all seasoned mechanical and electrical engineers in their 60s. Chief Executive Kim Yoon-sang, 65, founded Neos in 2015 and has localized production of coolant tank cleaners.
“I started the company with older professionals as it’s hard to find young people willing to work at smaller firms. I also recalled that Samsung Group employed some retired workers from Japan in the past to improve its technologies,” said Kim, a former worker of construction and engineering firm Samsung C&T Corp.
Neos is one of many small firms in Korea hiring more older professionals. With the world’s lowest birthrate and rapidly aging population, the nation's small and medium-sized enterprises (SMEs) are seeing a decrease in young workers at such companies.
The employed population aged 60 and over in the country hit a record high of 5.9 million last year, according to Statistics Korea. The number of startups established by the age group reached 129,384 last year, the highest number since 2016 when the statistics began to be compiled.
This is not surprising given Korea's population, which is aging more rapidly than any other OECD country. People aged 50-69 make up 31.2% of the entire population of 51.5 million.
(Graphics by Sunny Park)
GOVERNMENT SUBSIDIES
Also, the government is increasing subsidies for hiring older workers.
The number of companies that employed workers aged 60 and above for more than a year was 367 in 2020 – it soared by more than seven times to 3,028 in 2022, according to the Ministry of Employment and Labor. The firms receive a 900,000 won ($672.1) subsidy per older worker.
The number of firms that hire people aged 50 and over has steadily increased from 1,272 in 2020 and 1,446 in 2021 to 1,874 in 2022, according to the ministry.
The manufacturing sector is where 26.4% of people aged 55-59 start a new job. Some 15.3% of the age group is newly hired in the healthcare and social welfare sector, and 8.7% find new employment in wholesale and retail, according to state-run Korea Employment Information Service (KEIS) data released last month.
Engineers of Neos inspect a coolant tank cleaning machine
OLDER WORKERS SKILLED, SMART, HEALTHY
“People aged 50-69 are the oldest group among the economically active population, but they are highly educated and healthy and have a strong will to work. The country should increase the use of this workforce,” said KEIS researcher Kang Min-jung.
More SMEs eye employing older, skilled workers as they make important contributions to productivity.
DSE Co., an Incheon-based light-emitting diode (LED) manufacturer, raised the retirement age to 70 a few years ago. The company has steadily recruited older workers for production management and research & development.
“We have reduced losses by buying materials in bulk, thanks to a 65-year-old overseas sales head’s prediction that the US dollar against the Korean won would become stronger. The person could have anticipated it through the experience of the 1997 Asian Financial Crisis,” said Chairman Park Jae-duck.
Automotive parts maker Ilji Tech Co. has recruited some 30 middle-aged workers with on-site experience for its new factory in Gyeongju, North Gyeongsang Province. The company plans to hire an additional 30 experienced workers this year.
Hanshin Tex Co., a fabric dyeing services firm in Daegu, has some 100 workers of which 70% are 60 or older.
“We have increased hiring older people as they can manage fabric orders from Middle Eastern firms, our major clients. Few young talent are willing to work for us despite the improved work environment with automated systems,” said CEO Han Sang-woong.
