Youngsters Are Minority
The average age of employees at Hyundai Motor and Kia Corp. is on the rise. More than half of the employees are over the age of 50, but less than one in 10 are in their 20s. In this situation, their labor unions are demanding that the retirement age be extended, raising concerns that the demand will undermine their organizational vitality.
As of the end of 2022, Hyundai Motor had 30,101 employees aged 50 or older, accounting for 43.7 percent of its workforce. On the other hand, the number of employees under the age of 30 was 9,263, which is less than one third of those over 50.
Kia’s inverted workforce pyramid is even worse than Hyundai’s. At the end of last year, Kia had a total of 35,847 employees, of which about 55 percent, or 19,610, were over the age of 50. They outnumbered employees aged 30 to 50 by about 5,500. Employees under the age of 30 made up just 6 percent of Kia’s workforce.
Kia’s percentage of employees aged 50 and older peaked at 60.6 percent in 2021 and has been slowly declining as more people retire. The number of employees in their 20s nearly doubled from 1017 in 2021 to 2,160 in 2022, but they are still a minority.
Hyundai’s and Kia’s age structures are centered on older employees because of their long tenure and the small number of new hires. Once employees join the automakers, most of them reach their retirement ages, so there are fewer younger recruits.
Even though the growing number of older workers increases the burden of labor costs and risk of a drop in the organizational vitality of the two automakers, their labor unions are demanding their retirement ages be extended. They want to raise the current retirement age from 60 to 65, the age at which employees are eligible to receive national pension.
“The majority of production workers at Hyundai and Kia are middle-aged and older employees with high salaries, so if their retirement age is extended, the two carmakers will be filled with employees in their 50s and 60s,” an industry insider said. “It can be difficult for a company to create new growth drivers if its employees become too old.”