Up to 1.13 million workers in Korea are laid off every year, but only 43 percent of them manage to find a new job within 12 months, according to an OECD report released early this month.

The report, entitled “Back to Work: the OECD review on displaced workers,” says 2.5 percent to 5 percent of all Korean workers between 20 and 64 are laid off each year. That translates into a maximum of 1.13 million laid-off workers assuming there are 22.55 million employed people in the country.

The OECD said half of the laid-off workers in Korea encounter “economic difficulties such as bankruptcy or near-bankruptcy.”

It added that only 43 percent of laid-off workers manage to find work within a year, and most of the new jobs are non-regular employment that entails a 15 percent drop in annual salary based on real income. “Even when they find new jobs, displaced workers tend to be paid less, have fewer benefits and are more likely to be overskilled than in the jobs they held prior to displacement,” the report said.

Chosen excerpts by Job Market Monitor

via The Chosun Ilbo (English Edition): Daily News from Korea – Only 4 in 10 Laid-Off Workers Find New Jobs.

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Korea should boost support for laid-off workers

Korea should strengthen its social safety net and improve support for laid-off workers to help them find a new job more quickly, according to a new OECD report.

Back to Work: Korea says that Korea has avoided the worst effects of the economic crisis, with the unemployment rate back to its pre-crisis level of 3%.

But more efforts need to be made to help the many workers who lose their jobs each year when their company goes bankrupt or downsizes, especially older workers and the low-skilled. In Korea, this affects between 2.5% and 5% of workers aged 20-64 years old each year. The rate is slightly higher among women (3.8%) than men (3.2%).

Finding a new job can take time as only less than half of laid off workers find another job within one year. Older workers, the least qualified and those in small firms are at most risk of being laid-off and staying unemployed for a long time afterwards.

Over two-thirds of laid-off workers find work in the same occupation as before or in occupations using similar skills. Nevertheless, earnings tend to be lower in the new job. Laid-off workers who are back in work within a year experience a 4% fall in real monthly wages on average and a 10% fall in real annual gross income. They are also less likely to have regular contracts on their new job and get fewer benefits.

To address these challenges, the OECD recommends that Korea:

Boost staffing levels in MOEL Job Centers so that more time can be spent providing tailored assistance to the unemployed.

Provide more intensive support to jobseekers who have been out of work for six months or more.

Focus vocational training programmes on generic skills required by emerging industries, such as maths and interpersonal skills.

Monitor and evaluate the impact of job-search assistance and training to identify the most effective programmes.

Improve compliance rates for Employment Insurance among businesses.

Consider easing access to Basic Livelihood Security for low-income laid off workers who do not qualify for unemployment benefits and risk falling into poverty.

Chosen excerpts by Job Market Monitor

via Newsroom – Organisation for Economic Co-operation and Development.