Among companies rehiring older workers, 80% are adopting a selective rehiring approach based on job performance and other evaluations. Additionally, more than half of these companies predict that extending the legal retirement age to 65 will necessitate adjustments such as changes to wage structures or reductions in new hiring.
On June 24, the Korea Employers Federation released the results of a survey conducted among 500 companies with more than 30 employees that operate a post-retirement rehiring system. The survey found that 80.4% of responding companies utilize a selective rehiring method that considers the necessary workforce size and candidate qualifications, while only 19.6% indicated they would rehire all interested individuals.
The most critical factor in selecting candidates for rehiring is job performance and work results, cited by 59.5% of respondents. Other important considerations include the rarity of skills and knowledge transfer needs (44.8%) and the physical and mental health status relevant to job performance (43.8%).
Regarding wages for rehired workers, 59.0% of companies reported that pay remains the same as before retirement. Conversely, 34.2% indicated that wages would decrease, with larger companies more likely to report reduced pay levels. The average wage reduction reported was 20.6%.
Companies identified the potential for legal disputes during the rehiring process as their greatest concern. The highest percentage, 47.1%, cited legal risks associated with adjusting wages and working conditions, while 39.2% expressed worries about disputes during contract termination and re-signing.
If the legal retirement age is uniformly extended to 65, 52.4% of responding companies believe additional institutional responses will be necessary. The most common response anticipated is the restructuring of wage systems (34.4%), followed by reductions in new hiring and the scaling back or elimination of rehiring programs, as well as voluntary retirement options.
Lee Sang-cheol, head of the Employment and Social Policy Department at the Korea Employers Federation, stated, "In an ultra-aging society, it is necessary to shift the labor market paradigm to utilize workers based on job roles and productivity rather than age."
Meanwhile, at a forum hosted by the Korean Confederation of Trade Unions and the Korean Federation of Trade Unions on June 23, a proposal was made to gradually extend the retirement age from 2028 to 2032, ensuring that those born in 1972 and later would have a guaranteed retirement age of 65.
* This article has been translated by AI.
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