South Korea faces looming labour shortage

South Korea’s workforce is set to face a significant decline in the coming years, with an estimated shortage of 820,000 employees by 2033, according to a recent report by the Korean Employment Information Service. This projection highlights the growing challenge of labour shortages, exacerbated by the country’s persistently low birthrate and changing demographic trends.

The analysis revealed that the number of economically active individuals in South Korea is expected to increase by just 312,000 between 2023 and 2033, a stark contrast to the nearly 3.2 million increase witnessed in the previous decade. The economically active population is predicted to peak in 2029 and then gradually decline, creating a gap in the workforce that will likely hinder the country’s ability to meet its annual economic growth target of 1.9%.

By the end of 2033, the shortage of employees to sustain growth is expected to surpass 820,000. This shortage will be felt most acutely in certain sectors, with the manufacturing industry projected to face a shortfall of 123,000 employees, followed by the social welfare sector (110,000) and the wholesale and retail sector (83,000). Notably, the report also highlighted a need for 192,000 expert-level employees and 142,000 office employees in the coming years.

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While the labour shortage is expected to impact various industries, some sectors will be less affected. For instance, the emergence of the electric vehicles (EV) industry, while driving technological advancements, will require fewer employees than the traditional car manufacturing sector. Similarly, a shrinking student population is expected to lessen the demand for educators.

In response to this looming challenge, the Korea Employment Information Service urged the government to implement proactive policies aimed at boosting workforce participation. Encouraging greater participation from underrepresented groups such as women, older adults, and youth—who have lower labour market participation rates compared to other OECD countries—is a key focus of the report.

Analysts suggested that increasing support for women juggling work and family responsibilities and revising labour laws to allow older employees to remain in the workforce for longer could help address the gap. In addition, enhancing employee productivity through technology and innovation will be crucial to mitigating the impact of labour shortages, reported The Korea Times.