Financial Authorities Need Career Advancement System to Retain Talent

To prevent the exodus of specialized personnel from financial authorities, experts argue that a personnel system should be established that rewards career advancement and experience rather than relying solely on salary increases or special allowances. Given the realistic limitations in matching compensation levels with private financial firms, it is essential to reduce disadvantages associated with long-term employment in highly specialized fields such as finance, capital markets, and digital finance, and to create separate growth pathways.

According to industry sources, the government has expanded the professional civil servant system to include practical-level positions this year to enhance expertise within the public sector. A new 'sub-specialist' position equivalent to level 6 has been created, extending the expert pathway from practitioners to managers.

However, experts caution that merely expanding the system will not guarantee that specialized personnel remain in their organizations. Choi Moo-hyun, a professor of public administration at Sangji University, stated, "One of the important aspects of public service is promotion, and there is a perception that staying in one position for too long makes it difficult to advance. While working in specialized roles can enhance expertise, individuals worry about potential disadvantages in promotions."

Professor Choi added, "Younger generations prefer immediate rewards for their hard work rather than a delayed compensation structure that requires enduring hardships in their youth. An incentive structure is needed to alleviate the relative deprivation felt by those who work hard but receive low compensation." He emphasized that in a situation where there is general dissatisfaction with compensation, providing allowances to only a select few could create discord within the organization. Therefore, it is crucial to utilize non-monetary rewards, such as promotions and special training opportunities, alongside financial compensation.

Internationally, financial regulatory agencies have addressed talent outflow by revising their compensation and personnel systems. The U.S. Securities and Exchange Commission (SEC) faced a high turnover rate among specialized personnel, including lawyers, accountants, and examiners, in the early 2000s, with an average annual turnover rate of 15%.

In response, the SEC implemented special salaries and retention bonuses, and in 2002, it amended laws to escape the constraints of the general federal employee salary system, allowing it to offer compensation and benefits comparable to other federal financial regulatory agencies. In addition to improving salaries and benefits, the SEC also took measures to expand its workforce and expedite the hiring of lawyers, accountants, and examiners. As a result, the turnover rate decreased to 7.5%.

Professor Choi concluded, "Simply offering a slightly higher allowance to those who demonstrate expertise is insufficient. It is essential to create an organizational culture that respects expertise and to establish an incentive structure that rewards what these individuals genuinely expect, such as promotions."