The banking sector is witnessing a notable shift in its workforce structure, with a decrease in full-time employees and an increase in temporary workers. As online banking becomes more prevalent, banks are reducing their physical presence and hiring fewer new employees, while filling specific roles with temporary staff.
According to the financial sector on September 14, the four major banks in South Korea—KB Kookmin, Shinhan, Hana, and Woori—reported that their full-time workforce stood at 46,599 in the first half of this year, down 3.3% (1,572 employees) from the same period last year (48,171). This marks a 12.5% (6,676 employees) decrease compared to the first half of 2021.
The decline in full-time positions is attributed to natural attrition from voluntary retirements and a reduction in new hires. The banks are not replacing retirees with large-scale recruitment as they did in the past, leading to a continuous decrease in full-time staff.
New hiring at the four major banks fell from 1,880 in 2023 to 1,280 last year, a 31.9% (600 employees) drop over two years. In the first half of this year, they hired only 485 employees, an 18.5% decrease from the same period last year (595 employees).
This reduction in hiring is influenced by changing consumer behaviors in finance. With the rise of internet and mobile banking, the need for a large number of staff at physical branches has diminished. The number of domestic branches for the four major banks decreased from 3,303 at the end of 2020 to 2,688 at the end of last year, an 18.6% (615 branches) decline over five years. The number of offline financial touchpoints, such as ATMs, is also decreasing.
In contrast to the decline in full-time positions, the number of temporary workers has surged. The four major banks employed 6,552 temporary workers in the first half of this year, up 53.3% (2,277 employees) from 4,275 in the first half of 2021. Notably, this represents a 16.5% increase (929 employees) compared to the same period last year, a significant rise from the 240-employee increase seen in the first half of last year.
The proportion of temporary workers within the total workforce has also increased. The share of temporary employees among the combined total of full-time and temporary workers rose from 7.4% in the first half of 2021 to 12.3% in the first half of this year. During the same period, the overall workforce decreased from 57,550 to 53,151, a 7.6% decline, while the number of temporary workers increased.
KB Kookmin Bank has the highest proportion of temporary workers at 17.3% among the four major banks. This trend reflects a shift towards greater flexibility in workforce management, as banks reduce regular staff while hiring temporary workers for specific tasks such as internal controls and specialized roles.
However, the increase in temporary workers should not be viewed merely as a replacement for full-time positions. Banks are increasingly re-hiring retired employees with relevant experience as temporary workers or securing specialized personnel for specific projects. While the rise of online banking has led to a reduction in full-time and overall staff, the increase in temporary workers is a response to the demand for flexible utilization of necessary skills and expertise.
A banking industry official stated, “As offline branches decrease and digital and artificial intelligence technologies supplement repetitive tasks that previously required more human labor, there is a reduction in workforce demand. However, the trend of hiring temporary workers for specific tasks, including re-hiring retired employees for internal controls, is on the rise.”
* This article has been translated by AI.
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