Korean big tech companies such as Naver Corp. and Kakao Corp. are struggling with workforce management as U.S. tech giants are making massive job cuts in response to the global economic downturn.

Unlike the U.S., where hiring and firing are relatively easy, Korean businesses have difficulty restructuring payrolls for redundancy or underperformance. The so-called manpower stagnation is emerging as a new challenge for Korean IT names that have entered a phase of growth stagnation.

As the job market freezes, more and more people are choosing to stay in their current jobs rather than taking on new tasks. This is particularly evident in Kakao and Naver where tech employees should be at the forefront of innovation. According to sources on Thursday, union membership rate at Kakao recently exceeded 50 percent. Employees who in the past would have been willing to quit for better pay and career development are now claiming their rights within the company through the union.

Naver and Kakao in an emergency due to manpower congestion, taking a conservative mode in manpower management, while freezing or reducing new hires for cost efficiency.

Unlike large ordinary companies, Naver and Kakao usually make personnel appointments every one to two weeks for efficient manpower management for each project.



Since 2014, Naver has run an open career opportunity program, which is carried out about three times a year. Employees are relatively free to move between jobs and departments, and the company has encouraged employee transfers.

What is noteworthy is that this virtuous cycle system does not work well these days. Employees show mixed responses to frequent personnel changes inside.

With the job market frozen, employees give a cold stare to those who frequently apply for transfers, said a Naver employee, adding it is true that both employees and management question the current workforce management system due to growing perceptions such as doubtful ability of employees and adjustment to a new department.

On the other hand, Kakao remains relatively rigid in internal job changes as its fast growth over the past 13 years is based on a culture where external personnel are tapped for immediate input. For this reason, some say that frequent and unintended personnel changes in Kakao are only fueling confusion among employees.

Due to the nature of the IT industry, movement of personnel is relatively common, but even in a recession, manpower restructuring or letting employees go carries great risks for big IT companies, said an unidentified executive at a tech company, adding that they also need to consider the possibility of brain drain.

By Ko Min-suh, Kim Dae-gi and Minu Kim

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]