Beyond gender equalization

Chickens to golden eggs

White Papers | September, 2013

Many global companies are focusing on finding a qualified female executive who could be placed on boards. In many cases, women executive members with sufficient experiences and high level of expertise could perform better than male executive members on the board. Therefore, recruiting qualified female executives and training female workers who have potential not only equalizes the gender difference on companies, but also contributes to company’s advancement. 

According to the European Commission (2012)1, more than 40 percent of women executives are on global companies’ boards in Norway. The United States also showed that 14.1 percent of women executives in Fortune 500 Companies in 20112. This movement also appeared in Korea where culturally, women used to not be allowed to be involved in politics or managements. Since 2006, the number of women executive members has massively increased3. Samsung’s, one of the top Korean companies in the world, purpose is to increase the women executive rate on boards up to 10 percent until 20203 while Korea Telecom promoted five female managers to executive members in 20134. Moreover, after President Park Geun-Hye, the country’s first female leader who took office in 2013, the Korean National Assembly offered the legal provision of ‘Quotas for women on boards’ in public enterprise and major companies in Korea5. These movements indicate that perception towards women in Korean society has been changed compared to the past, and they promote the activities of women in companies. However, research from the Korean Ministry of Employment & Labor (2011)6 found that the rate of women executive on boards in top 100 companies in Korea is only 1.48 percent. This rate is extremely low even in Asia; 10.4 percent of women executives in Thailand and 4.8 percent in India. Even if Korean society accepts the activities of career women, there is no doubt Korean society is still a difficult environment for female workers.

Difficulties for being a career woman in Korean Society

1) A hard working environment

According to the statistics from OECD countries research (OECD. Stat, 2011)7, the average work time of Norway, which maintains the highest rate of women executive members on boards, was 1,426 hours per year in 2011 (See Graph 1). The average working hours of France was 1,476 per year and OECD countries were 1,776 per year. However, Korea’s was 2,090 per year, the second highest score in OECD countries in 2011. This score is even higher than Japan, which is a country with the lowest rate of women executives. This indicates that not only Korean female employees, but also every Korean employee works almost 9 hours per day and when the fact that the statistics did not count vacations or holidays is considered, they work more than 9 hours per day. The reason Korean women employees have difficulties in work continuity derives from an extremely large amount of working time, especially for those who have children or family to take care of. Absence of private time may also discourage women’s working efficiency.








Graph 2 presents the rate of economic activities of Korean women by age in 20118. The graph shows that Korean females aged between 25 and 29 scored the highest rate of economic activities, then the rate decreased in women between 30 and 39. The rate slightly increased at the group of women between 40 and 44. The Korean Economic Research Institute explained that this ‘M curve Graph’ is only appearing in Korea and Japan, where female employees leave the work place because of marriage, birth and childcare, then they come back after the age of 40.

This ‘M Curve’ indicates the problem of female workers in the Korean workforce. After Korean women working, many of them leave at the most important moment of their career because of birth or childcare. A number of companies with Korean business culture hardly accept this career break and their non-cooperation attitude disturbs the return of women employees in the workforce after their break which causes female workers to hardly come back from it or even if they did, they are facing difficulties to get executive level promotions. This is not due to a lack of education, as there is no significant difference between the rate of Korean male and female graduates.

2) Government support is still behind
Since 2000, the birth rate of Korea has been decreasing. There is a phenomenon caused by career women trying to avoid or postpone marriage and pregnancy. In particular, they claim that it is hard to bring up children in the Korean working environment. Therefore, The Korean Ministry of Health & Welfare has gradually provided various policies for female employees since 2004; before/after medical support, governmental aids for pregnancy and bringing up children, flexible working hours, and administrative supports for hiring babysitters, establishing additional kindergartens in large cities. Even though these policies and actions have become more progressed than before, they have just started, thus the systems are not completely settled.

3) Cultural pressure
In sociology and psychology, one of the most important facts that affect an individual is social culture. More than 3 million academic articles that studied the effect of culture have been published (Google scholar search, 20139). In most Asian cultures, the authority of women is very weak. In Korean modern society, this paradigm toward females has changed. However, the old fashion perception about women still remains in Korean business culture. The role of female workers is stigmatized as an assistant, not a role of being in charge of management. Even if this paradigm has started being changed during the last 15 years, a negative image of career women still remains in Korean society; working women are irresponsible for their family or women bring bad luck to business. This mindset gives significant effects on teamwork and performance. To prevent this situation, Korean companies often avoid promoting female workers with similar working efficiency with male workers and offer executive positions to male workers. Although the Korean government and society promote breaking these paradigms about women employees, time is still needed for both women and Korean social culture. Until then, Korean female workers require patience to endure cultural pressure.

Recent changes are driven by increased numbers of women executive members

Clearly, numbers of women executive members are increasing. For the 100 largest Korean companies (KOSPI Index), the numbers exceeded 100 for the first time in history from this year. It is also anticipated that the numbers will make a quantum-jump in the next 5 years. Social and cultural changes, as well as governmental policies helping female workers continue to develop their careers, creates a large number of female upper level managers who are able to become executives. The average period of becoming an executive is 20.4 years as of February 2013, faster than the 21.5 years in 2010 and 20.8 years in 2011. The average age of female executives is 48.2 years, older than the 47.6 years of last year.

Solutions and recommendations

  • Continuous governmental and corporate supports in systems are needed. Temporary reduction or flexibility of working hours or mobile/virtual office environment, and using portable IT devices are recommended. In a larger context, more flexible and advanced HR evaluation and development system for female employees is also helpful.
  • Change of social concepts on career women is necessary: encouraging economic activities of female employees should be motivated, the career break of well-trained female workers is currently regarded as a waste of national resources and disadvantage to the economic growth and global competitiveness.
  • Female employees should change their perception towards themselves and male co-workers. Ms. Eun-Joo Choi, CFO at POSCO Architecture & Construction said that women employees should not treat male employees as competitors. She advised junior female employees that corporation, with male employees as team member is one of the most important factors for success of career women (POSCO news, 2013) 10.
  • Support from family members is also necessary for career women when they are married and caring for children. Ms. Eun-Suk Cho, managing director at LG Electronics’ mobile communication department and Ms. Yoon-Hee Hong, managing director at SK C&E claimed that one of the reasons they reached the executive level is flexible working hours and assistance from their husbands in childcare or laundering11.

Korea has been left behind in training and utilizing female resources since industrialization, which preferred male resources in export and the manufacturing oriented business environment. Now, with the 10th strongest economy in the world, Korean society pursues gender diversification in various areas so as to meet a global standard. As the economy gets bigger, fundamental changes of the Korean industrial structure focusing more on services than manufacturing also require emotional and intuitive approaches where females are strong.

Based on positive impacts of female workers on the economy, advancement on governmental and corporate policies are expected in the next five years as the new female president is more active in boosting gender equalization than her predecessors. Now, it is time for Korean companies to make the doors wide open in actively hiring and promoting talented female leaders with confidence of going forward, balanced growth and sustainable profitability.

Citations / References

1) The Financial Times, Déjà-vu in Norway over EU’s women quotas, 23th/ Oct/ 2012, written by Richard Milne
2) Rachel Soares, Baye Cobb, Ellen Lebow, Hannah Winsten, Veronica Wojnas, and Allyson Regis, 2011 Catalyst Census: Fortune 500 Women Executive Officers and Top Earners, Catalyst, 2011
3) Chosun Biz, Korean Business looking for women executives in 2013
4) Korea Joongang Daily, The percentages of women executives on Korea Telecom boards scored more than 10%, the highest percentage in Korean Top 30 companies, 2013
5) Chosun Ilbo, Korean public enterprises aims to recruit more than 30% of women executive in 5 years, 2013
6) The Aju News, Quotas for women executive on the boards may not efficient, 2013 
7) OECD.StatExtracts, Average annual hours actually worked per worker, 2011
8) Hyun-Ok Han, A study of the economic activities of Korean females, 2012
9) Google Scholar, research results of ‘effect of culture’ on Google Scholar search, 2013
10) POSCO A&C Story, Interview with Eun-Joo Choi who is the first women executive from public employment , 2013
11) Hangyerae news, Tips & Knowhow from top 2% women executives in the Korean Companies, 2012 

This report was prepared by Daniel Oh, an intern and edited by Eunice Kim, Vice President at DHR International, Seoul.