Korea’s major IT conglomerates are in the hot seat after being embroiled in a series of scandals surrounding their work environments and governance issues.
Top-tier online platform operators Naver, Kakao and Nexon have been among the most sought-after workplaces among young jobseekers.
However, their images have been tainted by recent incidents that revealed their pressure-cooker work environments and grueling work hours aimed at supporting the rapidly-growing industry; while a series of power abuse and bullying cases have also emerged.
A Naver programmer recently took his own life after leaving a note complaining about the heavy workload and abuse in the workplace. The incident prompted people to raise questions about the leading IT firms’ working conditions and irregular labor practices.
“The deceased was overworked, treated unfairly and verbally insulted leading to psychological damage,” Naver’s union claimed during a protest in front of the company’s headquarters in Bundang, Gyeonggi Province, Monday. “For over two years, the deceased and his colleagues took diverse steps asking the company to resolve the issues, but they were all ignored.”
The country’s leading messaging application company, Kakao, has also been accused of six violations of the labor standards and minimum wage acts.
A government inspection found that the company made employees, including a pregnant woman, work over the 52-hour workweek limit, while some employees were ordered not to log their overtime work.
Leading game developer, Nexon, is alleged to have “unilaterally” placed some 200 employees on a waiting list and reduced their pay, resulting in labor and management conflict.
Naver was the first internet company to establish a union in April 2018, and Nexon, Smilegate and Kakao quickly followed suit. But since then, there have been increased calls for the companies to improve their work environments and address their authoritarian management culture.
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| Naver headquarters in Seongnam, Gyeonggi Province. Korea Times file |
Experts and industry officials said such widespread practices in the IT industry could continue as it sees rapid growth.
“Korea is a global IT powerhouse, but the government’s 52-hour workweek cap has been burdening IT companies. Before, workers received higher pay and worked long hours behind the scenes, but the 52-hour workweek implementation emphasized a work-life balance among the younger generation,” Kim Dae-jong, a Sejong University economics professor said.
“The strong measure is pulling down Korea’s IT competitiveness, while there are increasing objections from mid-sized companies after implementation of the cap. So it should be flexible in high-demand jobs especially in the IT field,” Kim added.
According to a survey conducted by the Korean Confederation of Trade Unions (KCTU) of 809 IT workers in November last year, 32 percent said they worked over 52 hours a week, while only 52.7 percent of them received overtime pay. Around 47 percent have encountered sexual harassment at the workplace, while 46 percent said their employers still enforce a blanket wage system.
One of the key reasons behind the excessive work and other violations seen at IT firms is their poor human resources management systems, according to experts. Unlike major manufacturing-based conglomerates such as Samsung, Hyundai and SK, IT companies have been operating for no more than 20 years and are apparently not developing systems to manage their staff capably, often being unable to invest heavily into such a matter.
The overall corporate culture of Korean IT companies may also be to blame, according to experts.
Most of the CEOs of these companies are the founders who established their corporate empires and they tend to hire and work with their colleagues in line with their visions in all major departments including planning, marketing, HR and finance.
Although not all of the founders continue to have substantial stakes in their firms, many believe they are capable of using their old methods to lead their companies that evolved from small-and-midsize firms to corporate heavyweights.
Also, the culture of hiring talented people from within their inner circles, either the same alma maters or previous jobs, looks to have worsened the situation.
Naver Chief Operating Officer (COO) Choi In-hyuk is said to have pushed ahead with the rehiring of the deceased worker’s boss from Netmarble in 2019, despite opposition from Naver employees who had worked under the man in the past. Choi is a leading figure at Naver with close ties to Naver co-founder Lee Hae-jin, both alumni of Seoul National University, and who worked together at Samsung SDS.
