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South Korea Shuns Moms at Peril as Workforce Shrinks

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South Korean Gender Equality And Family Minister Cho Yoon Sun
South Korean Gender Equality And Family Minister Cho Yoon Sun. Photographer: SeongJoon Cho/Bloomberg

Jan. 24 (Bloomberg) -- At a job interview for Starbucks Coffee Korea Co., Jeong Eun Suk watched two women break down in tears of joy at being given the chance to work. They had quit to raise children, a path in South Korea from which there are few ways back.

“People were really emotional,” said Jeong, 34, a mother of two. “There really aren’t many jobs that women can return to after giving birth.”

Starbucks Korea’s “returning-mom” program is part of a drive to raise female participation in Asia’s fourth-largest economy as the nation’s first female leader, President Park Geun Hye, tries to counter the effects of an aging population. Park has pledged to create 1.65 million jobs for women and lift the female employment rate to 61.9 percent, from 53.5 percent, before her term ends in February 2018.

“I have a great deal of interest in making sure that women are happy and able to balance their work with their families,” Park said in a Jan. 10 interview in her office in Seoul. “This is one of the most critical agendas for my government.”

Park plans to raise spending 68 percent this year on efforts such as building more childcare facilities and fighting violence against women. She asked Cho Yoon Sun, minister for gender equality, to coordinate all government ministries to meet the targets. Cho, 47, said she will announce policies next month designed to lure back more mothers to jobs and is working with the country’s dominant family-run industrial groups, or chaebol, to try to break up male-dominated employment practices.

Hyundai Staff

Hyundai Motor Group had 4.8 percent female staff in 2012, according to Seoul-based private research company CEOScore. Hyundai Motor Co., the conglomerate’s largest company and the nation’s biggest carmaker, said in an e-mail it only had one woman among its 246 executives as of Sept. 30.

The decline in female managers occurs as women quit their jobs after marriage to raise children, said Cho. Women represented 37 percent of the workforce at South Korean companies with at least 1,000 workers at the end of 2012, but filled only 17 percent of managerial posts at private and public companies, according to Labor Ministry data.

By the time they get to director level, the balance is even worse. Women made up 1 percent of the nation’s corporate boards in 2011, according to a report by McKinsey & Co.

‘Never Recover’

“For highly educated women in better paid jobs, as soon as they get into their 30s, their employment rate drops sharply and they never recover,” said Cho, in an interview in her office in Seoul on Jan. 10. “The biggest priority is to help them not to quit their jobs while raising kids.”

Without greater female participation or increased immigration, South Korea’s companies will have to hire from a shrinking labor pool. Korea’s working-age population is projected to start declining in 2018, according to the Organisation for Economic Co-Operation and Development.

“What’s most important for South Korea now is creating an environment for more women to join and stay in the workforce given the fast-aging population,” said Kwon Goohoon, an economist in Seoul at Goldman Sachs Group.

An OECD report submitted to Park last year estimates that Korea would add about 1 percentage point to GDP growth if it had equal employment. The economy grew 2.8 percent last year.

To narrow the gender gap, the government is increasing the number of jobs with flexible working hours, adding more daycare facilities and setting up policies that would allow both men and women to take time off for child rearing. It will expand a certification system that recognizes companies’ efforts to be family friendly, because “the perception of society as well as corporate communities is very important,” said Park.

Company Care

At the core of Cho’s task is the need for more and better daycare in Korea. Companies with more than 500 workers or 300 female workers are supposed to run a childcare center near the workplace. Only about 40 percent do and Cho wants to raise the level to 70 percent by 2017.

She has personal experience of the problem many Korean women face in finding someone to watch the children when they’re at work. When Cho worked at local law firm Kim & Chang, the company didn’t provide childcare and she went through a series of nannies trying to find one she could trust.

“In one month, I had to change six or seven nannies,” she said. While her husband, who still works at the law firm, tried to help, she became increasingly desperate trying to look after her kids, do her job and find a reliable caregiver. “As a Buddhist, I thought to myself at one point: ‘I don’t care if I get reborn as an insect, as long as it’s male.’”

Cho also plans to expand the state’s chain of 120 women’s re-employment support centers.

Hyatt Housekeepers

At one of the offices in Incheon, South Korea’s third-largest city, Director Cho Min Jung offers training to match available jobs. When she discovered that the local Hyatt Regency hotel planned to expand for the 2014 Asian Games in the city, she ran a two-month training program for housekeepers for 20 women, 14 of whom found a job.

“The program was a big success as they were trained by someone who worked at the hotel for a decade,” said Cho Min Jung, who will begin another training program in the spring.

Cho, the gender-equality minister, is also trying to encourage private companies to tap the potential female labor pool. She attended the recruitment drive by Starbucks Korea and wants others to follow suit.

“That’s a smart decision by Starbucks, it will get very dedicated employees,” said Cho, who has two daughters. “They were so grateful to the company for calling them again, because they couldn’t find work anywhere else.”

Sense of Loss

That includes Jeong, who joined Starbucks Korea in 2002 and rose to become a manager before she quit in 2011 after delivering her second child. Under the new program, she rejoined as a part-time deputy manager, working a 4 1/2 hour shift at a branch in eastern Seoul. She can feed her children breakfast and then pick them up from kindergarten after work.

“I was gripped by a sense of loss for the 10 years I spent working and had a tough time overcoming the feeling that I’d given up something so precious so easily,” said Jeong in a phone interview. “I felt lucky to be given another chance.”

Government efforts to encourage more women to work face other obstacles. South Korean women earned 39 percent less than male employees in 2010, the biggest gender wage gap among OECD countries with comparable data available. The average gap was 16 percent, according to the OECD.

In a 2012 survey of more than 900 female government and public-school workers in the country, 7.7 percent said they had been sexually harassed at least once in the past year. Of those, 93 percent said they just put up with it.

Park, Forbes Magazine’s 11th-most-powerful woman in 2013, said sexual crimes against women are one of the four major “social evils” that must be rooted out in the country. The others are school violence, family violence and junk food.

Exam Nightmare

After Park outlined her targets for gender equality at her first cabinet meeting last year, Cho had a nightmare similar to the one she used to get as a lawyer before major cases: Sitting her college entrance exams, she realized with horror that she wasn’t prepared for one of the papers.

“Only this time it was worse -- I wasn’t prepared for any of the subjects,” she said. Not least among the goals Park set was to get officials across the government offices to consider how policies will impact women. “We have one ministry for women and 16 ministries for men,” Cho said.

Cho said she’s pushing for more women appointments using a ploy given to her by one of her inspirations: Christine Lagarde, managing director of the International Monetary Fund.

Cho met Lagarde last year and said the IMF chief advised her to compile a list of competent women in public companies and organizations that Cho can offer senior executives if they complain about a lack of female candidates for key roles.

Breaking Barriers

Cho’s rise to minister of state has helped break down barriers to women in the country.

“She achieved far more than we expected and opened the door wide for more female workers and officials to move up the ladder,” said Ha Yung Ku, chairman of Citibank Korea Inc. where Cho was the bank’s first female executive vice president as chief legal officer before entering politics in March 2008.

Citibank Korea now has three female executive vice presidents: the chief finance officer, the head of operations & technology and the chief of trade and treasury solution.

Like most Korean women trying to rise up the corporate ladder, Cho had to deal with the male-centric culture of long working hours and late-night drinking with colleagues, which makes it harder to balance work and family commitments.

After Hours

“She passed the bar exam after marriage, which was almost impossible at that time,” said Yang Young June, a lawyer at Kim & Chang, where Cho worked for more than a decade. “She was our first Korean female lawyer and entirely changed our prejudice against women. Her work was perfect. She never asked a favor due to family issues. She joined most dinner meetings, even drinking parties.” Yang said about 30 percent of the firm’s new recruits now are female.

Cho said she was lucky to find good nannies in the end to allow her to dedicate time to her career. That may not be an option for many South Korean women. Cho was the richest among the country’s most senior 19 officials, with a net worth of about $4.4 million, a government report said in May.

As long as Korea’s workplace culture involves long hours, socializing after work, and a seniority-based pay system which punishes women for leaving their job to have children, social policy reform will have relatively little effect, according to an OECD report in May 2012.

Samsung Calling

There are signs of change. Samsung Group promoted 15 women to executive level for 2014, the most in its history, the nation’s largest conglomerate said. A total of 475 officials rose to senior positions of executive vice president or below. The only woman among the eight promotions to president in the group’s various units was Lee Seo Hyun, the second daughter of Lee Kun Hee, chairman of Samsung Electronics Co.

Chairman Lee, South Korea’s richest man, promised in 2012 to boost the ratio of female new hires, saying: “Failure to make good use of female talent is a loss to our company as well as the country.”

In July last year, the Bank of Korea made Suh Young Kyung its first female deputy governor. Last month, Kwon Seon Joo became the first South Korean woman to head a local bank, taking the helm at Industrial Bank of Korea. Cho Hee Jin was promoted to deputy chief prosecutor in Seoul, making her the country’s highest-ranking female prosecutor.

“The glass ceiling facing our women is slowly coming down,” Park said on Dec. 30, welcoming the news of Kwon’s and Cho Hee Jin’s promotions.

Rising Youth

Among Koreans in their 20s, the rate of economic participation by women was 62.9 percent in 2012, surpassing that of men for the first time, according to government data. The rate for females drops below that for males in their thirties, when many women become housewives.

For Cho, the gender-equality minister, it was her daughters who gave her the motivation to keep going during her career when she felt like quitting.

“I thought: I studied very hard to become a lawyer, if I quit my job to raise my kids, my two daughters will work very hard and they will have to quit their jobs, and then my granddaughters will do the same,” she said. “Then, what’s the point of educating women? I just decided to survive.”

To contact the reporters on this story: Eunkyung Seo in Seoul at eseo3@bloomberg.net; Sam Kim in Seoul at skim609@bloomberg.net

To contact the editor responsible for this story: Paul Panckhurst at ppanckhurst@bloomberg.net

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