Labor costs picked as top reason to hire foreign workers

Workers from Nepal arrive at Incheon International Airport in this June 2023 photo. Newsis Skepticism remains over foreign caregiver program By Park Jae-hyuk The main reason for small and medium-sized enterprises (SMEs) in Korea to use migrant labor this year was relatively lower wages of foreign workers, compared to those of their Korean colleagues. The Korea Enterprises Federation’s (KEF) recent survey of 600 companies hiring fewer than 300 employees showed on Tuesday that 48.

2 percent of respondents picked lower labor costs as the biggest reason for their employment of foreign workers, while 34.5 percent cited the shortage of Korean job seekers. The result was in stark contrast to that of the previous year’s survey, which showed that 92.



7 percent of SMEs picked the Korean job seeker shortage as the primary reason to hire foreigners, while only 2.9 percent mentioned personnel expenses. “The difference can be attributed to extreme financial difficulties facing SMEs, caused by high interest rates, sluggish domestic demand and declining exports,” a KEF official said.

The business lobby claimed that their financial strain also led them to pick foreign workers’ wages as the biggest obstacle to using migrant labor. Last year, the language barrier was mentioned as the major hurdle for SMEs hiring foreign workers. The KEF noted that 45.

5 percent of respondents still provide foreign workers with lodging for free, despite the government’s guidelines that allow companies to deduct lodging expenses from wages. “Employers are basically not forced to provide foreign employees with board and lodging, but if a company offers accommodations to workers, lodging expenses can be collected from the workers,” the KEF said. Read More Overdue wages paid by gov't to foreign workers double in 4 years Labor minister confirms no separate minimum wage for foreign workers The survey also asked whether the foreign caregiver program can improve Korea’s birthrates, as the Seoul Metropolitan Government matched caregivers from the Philippines with households in the city this year.

According to the KEF, 53.2 percent of respondents answered that the program will not be helpful in counteracting Korea’s low birthrates and providing work-life balance, while 41.8 percent said that they “don’t know.

” “Given that few households can afford the wages of foreign caregivers, the results showed a public perception that foreign caregivers will have a limited impact on the society at large,” the KEF said. “The high rates of respondents who answered that they ‘don’t know’ also showed the lack of discussion on this matter.”.