South Korea Work Culture
South Korea Work Culture
To succeed in business in South Korea, it is vital for both employers and employees to have a strong understanding of the business culture.
As a global PEO (Professional Employment Organization) it is our goal to be familiar and updated with the business culture in the country we work with and in. By sharing our knowledge about South Korean work culture, we want to support your global expansion plans. Therefore, we will address all the aspects of the work culture in South Korea to start your expansion well-informed.
The hierarchical attitudes in South Korean life are reflected in workplace culture, where etiquette and business practices are similar to other Asian countries but can be significantly different from the Western outlook.
A growing number of international companies believe it is worth making the adjustments to enter the highly-competitive South Korean marketplace – now one of the most powerful and vibrant economies in the world.
South Korea, officially the Republic of Korea (ROK), ranked 10th globally for nominal Gross Domestic Product at 1,823 billion US dollars in 2021, a 1.92% share of the world economy, with further growth of 3% predicted for 2022. Per capita GDP of US$35,196 ranks 29th in the world. South Korea has the fourth largest economy in Asia, behind China, Japan and India.
South Korea also has nearly 20 free trade agreements, including with the European Union (EU), European Free Trade Association (EFTA), Association of Southeast Asian Nations (ASEAN), Australia, Canada, China and the United Kingdom.
Unlike the Japanese and Chinese, Koreans are a homogenous ethnic group with their own language and culture, based on Confucian and Buddhist philosophies.
This places great emphasis on respect and ‘kibun’ or ‘face’, which permeates every aspect of life including the business world. Visiting businesspeople must take care to recognize the position of their opposite number in the hierarchy.
In business relationships, Koreans are reluctant to confront issues and give a straightforward ‘No’, which can become confusing for more direct Western businesspeople.
Incomers must be ready for the challenge and now is the time to get down to business. So here are a few tips on taking the best steps and clearing those cultural barriers … and South Korea has some particular etiquette nuances which could catch out western visitors.
- Language: Although many South Koreans are comfortable using English as their business language, it is not uncommon for high-level businesspeople to stick to their own language. If unsure use an interpreter, but at the very least learn basic words. Do not rely on verbal communication and confirm in writing
- Punctuality: Be on time after arranging the meeting well in advance … and allow for the traffic
- Attitudes: ‘Face’ is important, as in most Asian business environments. Avoid pointing out errors and making criticisms in the presence of others. Raised voices are not appreciated
- Relationships: Business relationships often begin with introductions by a third party, but beyond that it is vital to build your own relationships with the other team. This is the essential first step in the process
- Presentations and Negotiations: Use charts and statistics to make your point, restricting English to distinct and clear phrases to express the message. Avoid questions in the negative as these are likely to be misunderstood. Do not expect quick decisions; be patient but firm and do not show frustration
- Greetings: The most senior team member should enter the meeting first and greet his opposite number in a formal but friendly manner. Ensure you use titles correctly, with a slight bow, breaking eye contact, and then a handshake. Wait for the most senior member to offer their hand. During the meeting, however, maintain eye contact with the person you are talking to
- Business Cards: Exchanging them is an import element of the business ritual, so take a good supply. Give and receive them with both hands, study the one you receive and maybe leave it face up on the table in front of you
- Dress Code: Smart and formal
- Gift Giving: A regular occurrence and part of the ‘getting to know you’ process
- Out of Hours: Wining and dining is also part of the process, although heavy alcohol consumption is not such an automatic ingredient as before. These occasions often reveal important aspects to the negotiations, so stay alert, although deals are generally concluded much in the Western style … in writing
South Korea’s Minimum Wage
The minimum hourly rate was raised in January 2022 to KRW 9,160 (€6.85, US$7.60), an increase of 5.1% and the largest since 2019. Based on a working week of 40 hours, the new rate equates roughly to KRW 1,465,600 (€1,096, US$1,218) each month. Working 208 hours per month, including the maximum 12 hours weekly overtime is not uncommon, when the increase equals a monthly wage of approximately KRW 1,905,280 million (€1,432, US$1,588).
Probation Periods in South Korea
The Labor Standards Act places no statutory requirements on probation periods. They are generally for between three and six months.
Working Hours in South Korea
Since July 2021 legislation has restricted the maximum working week to 40 hours, based on eight hours per day, with a maximum 12-hour overtime. Previously, employers could insist on 12 hours overtime each week and another 16 hours at weekends. Companies employing five or fewer are exempt from the new regulations, while those with fewer than 30 staff can require employees to work 60 hours a week until December 2022. Employers who ignore the rules face up to three years imprisonment and KRW 20 million (€14,965, US$16,623).
Overtime in South Korea
Extra hours are those worked exceeding eight in a day or 40 a week, up to a weekly maximum of 52, and the employer pays the extra hours at 1.5 the usual hourly rate. If there is a written agreement, the employee can take time off in lieu. Employees who work eight hours on a holiday or rest day are also entitled to 150% of their normal hourly wage, and 200% for exceeding eight hours on a rest day.