Employees at the world’s top chip seller have seen their pockets filled with Samsung Electronics’ strong earnings. On top of a regular profit-linked bonus worth half a year’s wages, all group employees in December received a special bonus worth two months of salary. This revealed the industry’s war for talent.
According to a Korea Exchange report, Samsung employed 109,490 people in South Korea as of December 31, 2020, with an average annual salary of 127 million won ($106,000). The average salary has gone up by 26% over the past five years, and it will likely rise even further in 2021 after another year of strong earnings.
Other generous benefits include a variety of on-site dining halls offering free breakfast, lunch, and dinner to Samsung employees, and most of their children’s school costs are covered by the company.
Samsung’s long-time leader, Lee Kun-hee, established these policies in 2001 in keeping with his compensation philosophy: results should be rewarded with pay.
As more and more science and engineering majors choose to work for game and internet companies like Naver and Kakao, the talent pool is becoming even narrower.
As a result of the shortage, the government has taken steps to develop more talent in this core industry, such as encouraging universities to establish semiconductor programs. In an effort to retain staff amid poaching by Chinese rivals, Samsung offers incentives to attract remarkable engineers.
Compare the scenario we mentioned above with Japan. There is a need for a long-term strategy to cultivate talent at the Ministry of Economy, Trade, and Industry, but no such strategy has been established. Chipmakers backed away from the business more than a decade ago, and fewer researchers in academia or industry are pursuing this field, which contributes to the shortage of engineers.
Furthermore, Japanese companies have difficulty attracting exceptional workers because of their inflexible pay structure, which is critical to their competitiveness.