Corporate Korea's hot import: foreign professionals

White Papers | November, 2013

By Eunice Kim

When we witness the growing number of foreign professionals contributing to the Korean economy and seeking opportunities in Korea it is apparent that both Korean companies and foreign professionals need each other to succeed in these rough economic times. Both parties can learn from each other and prosper together. If foreign professionals and locals can work together in other countries, why are we still struggling in Korea? Currently the country has a rising demand but limited opportunities for foreign professionals to join Korean corporations. Many foreigners are attracted by opportunities to work in Korea and also by Korea’s culture. In some instances, foreign professionals wish to stay in the country, so they either extend their contracts or look for outside opportunities. Depending on the company, you will either find foreign professionals in high management positions or at lower levels.

Back in 2011, market leader Samsung had the largest number of foreign professionals in leadership positions with 16 foreign executives, followed by the world’s No. 3 mobile phone maker LG Electronics Co. with 9 . Some of the executives were recruited for their experience and innovative thinking they showed in their careers or at university. But both were recruited for the same purpose, to help Korean companies to develop their international presence.

Intense Work Environment

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South Korea is perceived as a demanding country regarding business compared to other countries famous for their business environment and success, such as Hong Kong or Singapore. Nevertheless, more and more foreign businesses open branches in Korea. This is how an increasing number of foreign professionals were introduced to South Korea. However, we should not dismiss local companies since, as of February 2012, more than 10% of South Korean listed companies are now reported to have at least one foreign executive among their top management teams , with Samsung Electronics Co. having the highest number. When asked about how many foreigners, including Korean-Americans, where hired over a 10 year period, Samsung answered 750 people and when asked how many had left in 2010, they said only 10%.

 

How Foreigners Perceive Working in Korea

In Korea, it is common for disagreements or misunderstanding to arise between Korean and foreign employees due to differences in culture, occupational habits and language. The cultural differences between Korea and the West are very wide, go very deep, and reach into a huge variety of situations. If employees are unable to come to a cultural understanding of these differences, even in this global era, then Koreans and expatriates working together will have to settle for a relationship, as many do now, close in proximity but distant in everyday life.

  • Depending on the company its global reach and rising brand can be an attractive part of the move. Some people saw moving to Korea for work as an opportunity to ride out the recession and make some money as the compensations for foreign executives can be substantial. 
  • Korean companies need to understand that foreign professionals look forward to learning a new business model while also teaching them a few things that will help their careers progress in the foreseeable future. However, this enthusiasm often dampens due to miscommunication or lack of it. This is why the relationships between foreign and native workers have been described as “close in proximity, but distant in relationship.” 
  • Domestic companies have been hiring more foreign professionals in an effort to enhance their competitiveness in the markets of advanced nations. While few foreign professionals hold executive positions and even fewer are Foreign Executives in Local Organizations, they are still needed in the eyes of Korean conglomerates. These foreigners are called FELOs. These FELOs are often hired for functional roles to globalize organizational capabilities.3

Status of Foreign Professionals Hired by Korean Companies

Even with a captive, static workforce that is increasingly competent in the global arena, Korean firms adopt practices that continuously challenge their employees.

Samsung, for example, brings in external talents at various levels of hierarchy to prevent staff complacency. These talents take up 10% of annual recruits, which also include foreign elites who typically serve as internal consultants for two years and are assigned to high-level positions within the company afterward.

Korean conglomerates hire foreigners to help with globalization but also to use their knowledge regarding specific industry expertise. They hire right out of university or from competitors or even from other industries depending on the position for their “out of the box” thinking. However, from the feedback we got from our survey, most of these foreign professionals feel insufficiently used by Korean companies and experience difficulties in such dynamic environments.

Survey on Diversity in Korean Workplaces

DHR International decided to focus on diversity. We already published the first white paper on gender diversity with a focus on the increasing participation of women in corporate sector. And now due to a growing number of foreign professionals in Korea and in Korean companies, DHR International Seoul decided to focus and run a survey on the subject of Foreign Professionals in Korean Companies and Their Effect on the Korean Economy. Of a selected panel of 150 people, 100 answers were received. Survey participants were selected from different industries within the Korean economy. The survey’s aim was to help us gather statistics about this rising phenomenon in Korea.

A few key questions were:

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  • Were you hired locally or sent by an overseas company?
  • How would you qualify your professional life? 
  • What would you say are the pros & cons of working for a Korean company?
  • Have you ever felt marginalization by others within the company?
  • If you were given the opportunity would you? Could you tell us why?
  • How would you qualify your personal life in correlation with your professional one?

 

A snapshot of participant responses:

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  • When asked about their time in Korea, 67% of participants found it Enjoyable and 70% found it Challenging. 
  • When asked about their professional life in Korea, the main answers are, demanding with 81% and Interesting with 69%. 
  • 60% of the participants were hired locally. 
  • When asked what they thought of their personal life in correlation to their professional life, 72% said that their lives were Pleasant and 42% added Memorable. 
  • When asked given the choice, 33% would leave at the end of their contracts, 25% would stay in the country but change companies and 22% would extend their contracts if given the opportunity. 
  • Out of a 100 answers, only one person answered “No” to the question have you ever felt marginalized? 
  • Companies are not always straightforward during the hiring process which causes tensions on the job since the range of authority promised prior to hiring is not always honored. It is said that “there is actually less flexibility than expected.” This is part of the reason why foreign professionals do not look for to a long term career in Korean corporate headquarters. 
  • When asked about marginalization, or what has come to be called the “outsider effect,” respondents agreed that a foreigner will never fit 100% within a Korean company’s work ethic or mentality, but they don’t really see it as the goal. As a foreign worker, one comes to make a difference, or to show a different way of thinking. However these aspirations are quickly forgotten when it comes to contributing in real time during meetings (very often conducted entirely in Korean). The person in charge switches to English to ask a direct question of a foreign worker only for brief input which may or may not be relevant to a final decision. Many foreign professionals have found this system “alienating.”

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Recommendations

Following our survey, we conducted a couple of interviews with the few people who agreed to talk more about their experience and to share with us some thoughts they had that could help in the future. These interviews were very helpful to understand what could not be found through the survey. For confidential purposes, no details regarding the person or the company will be revealed.

 

  • Korean companies should make better efforts to be clear and up-front during the interview about the real goal(s) of the job, what expectations will be, and the scope of authority the candidate will have. 
  • During the hiring process, the candidate should be able to meet with his/her direct supervisor and some of the people he or she will work with on a daily basis. Some respondents reported that the executives the candidates met during the hiring process were never met again after joining the company. 
  • Pairing together a foreigner and a Korean may be effective. They would guide each other and interact with each other to find solutions to achieve common goals. Their combined thinking could prove to be productive for the companies. 
  • More inclusive communication in English would be helpful. For that to be achieved language training should prioritize communication over mere comprehension. 
  • Korean corporate structure is often challenging for foreign professionals. The levels of authority impede open communication. Korean firms seeking foreign professionals may wish to consider hiring Korean-Americans or Korean-Europeans with global experience and able to adapt to Korean corporate culture. 
  • Finally, HR management of foreign professionals needs improvement. Foreign professionals may require much more support by Korean HR to help them be truly effective in their jobs. If Korean HR is unable to champion foreign professionals it may contribute to breakdowns in communication and a lack of trust between Korean companies and foreign professionals.

Foreign professionals are now constant in the success of Korea’s economy. The demand for an offering of foreign talent is growing continuously. Now is the time to make some necessary changes.