As the steel industry grapples with labor disputes over the direct employment of subcontracted workers, Dongkuk Steel has established stable labor relations after directly hiring 971 employees from partner companies in 2023. This year, the company also achieved an early resolution of wage and collective bargaining agreements in March, marking a record 32 consecutive years of conflict-free negotiations.
Dongkuk Steel attributes its unique labor relations to '72 years of communication and trust.' In an interview on July 22 at the Incheon plant, Jeong Yong-no, the director overseeing human resources and labor relations, stated, "The greatest competitive advantage of Dongkuk Steel is our labor relations. There is a shared understanding that the company must generate profits for the benefit of its members, and a culture of mutual concession has been maintained for a long time."
In 2023, Dongkuk Steel Group became the first in the industry to directly employ 971 in-house subcontracted workers. At that time, there were concerns about potential labor disputes and resistance from existing employees during the organizational integration process.
To minimize these concerns, the company operated a separate task force for six months prior to the direct employment, engaging in thorough discussions with the union to build consensus on the direction of the hiring initiative. The task force included labor representatives from each workplace to address anticipated issues, and company executives frequently met with the union to discuss the necessity of direct employment and strategies for securing the company's future competitiveness.
After the direct employment, the focus shifted to organizational integration. The company implemented a 'Harmony Project' that included mentoring and lunch meetings between existing and newly hired employees to share organizational culture and enhance understanding of work conditions, benefits, and company policies.
As a result, two years after the direct employment, Dongkuk Steel has achieved stable organizational integration, along with improvements in factory productivity and safety levels. Jeong noted, "Before direct employment, the primary contractor and subcontractors shared production processes, but now we operate as a single organization, facilitating much smoother communication. Productivity has increased, and the issue of outsourcing risks has improved, ultimately strengthening the company's competitiveness."
He particularly highlighted significant changes in safety. Following direct employment, workers began actively participating in risk assessments and improvement activities, leading to investments in safety facilities for subcontracted processes that now meet the same standards as direct operations.
In fact, Dongkuk Steel's accident rate decreased from 0.68% in 2023 to 0.58% in 2024, a reduction of about 14%. Although it rose slightly to 0.63% in 2025, it remains low compared to pre-direct employment levels.
Jeong emphasized that Dongkuk Steel's investment in its workforce has driven these results. He stated, "The company's decision to directly employ workers was not merely a response to labor issues or the Serious Accident Punishment Act. While there was a short-term burden of labor costs, we believed that investing in people would ultimately lead to corporate competitiveness, and that belief has resulted in our current achievements."
Looking ahead, Dongkuk Steel plans to continue its investment in people. Given the challenges of attracting young talent in the manufacturing sector, the company aims to enhance housing support and implement various programs, including internship opportunities linked to employment, to secure young talent.
Jeong concluded, "To become a century-old company, people are ultimately the most important asset. We will continue to focus on creating an environment where employees can build stable families and work for a long time."
* This article has been translated by AI.
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