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Seven Reasons Why Korea Has the Worst Productivity in the OECD
Insider Perspective
Seven Reasons Why Korea Has the Worst Productivity in the OECD
  • By matthew
  • March 17, 2014, 09:45
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Korean businessmen play in a water fountain on a Seoul street in 2009. (Photo by Ingmar Zahorsky via Flickr)
Korean businessmen play in a water fountain on a Seoul street in 2009. (Photo by Ingmar Zahorsky via Flickr)


Korea was recently named the worst place for worker productivity in the OECD, which was featured in a recent article by this magazine. This news is not surprising for any professional previously or currently working in Korea, as the notorious overtime hours coupled with years of low growth have been a widely-discussed issue over the past few years. 

So why are Korean workers, and therefore companies, apparently so unproductive? One big reason is a lack of time management skills in the general workforce. I was employed for over a year as the Global Human Resources officer of Donghwa Holdings, and was completely immersed in the office culture, speaking only Korean as one of only two foreign employees in the Seoul office. This immersion afforded me an inside view of the time management issues plaguing Korean offices. Based on my experiences, I have developed a list of 7 reasons why Korea has the worst productivity in the OECD.

1. Rigid Structures and Hierarchy

Korean corporate structures are notorious for their top-down approach and rigidity. Some experts even compare corporate Korea to an army division, such is the influence of military service and authoritarian leadership on the corporate landscape. 

A byproduct of such rigid corporate structures is constant and unnecessary reporting to senior directors, as soldiers to a superior officer. Teams will brief department heads weekly, and sometimes even the board of executives on a regular basis. Also, if a director wants to know about something, regardless of whether it is of concern to their project goals, a team leader will be forced to present a report to the directors, usually within a very short timeframe. The team leader will then drop whatever team-related work they were doing and have their team spend the next few days researching and preparing an over-the-top presentation for the director. 

This constant cycle of ad hoc reporting ensures that there is little strategic work and movement within a company. Instead, the corporate environment feels like a fire department, where teams are always on-call for spot fires, and need to be ready to respond to unexpected problems immediately. From experience, my previous company was a never-ending merry-go-round of audits and presentations, which resulted in my team leader spending the majority of his time making PowerPoint presentations for the CEO, a situation he himself would lament as a waste of his time.

2. Communication Issues

Despite an enforced culture of regular drinking and socializing, Korean companies suffer from a lack of direct, honest, and effective communication. Teams themselves and departments will often function fairly well together. But the atmosphere of constant socializing by eating lunch together and after-hours drinking sessions has created the side effect of factions within a company. As a result, teams across departments become almost enemies. Inter-departmental links are non-existent, and business units within one company become suspicious and competitive. Poor communication always results in poor performance, and when there are poor interdepartmental relationships, performance suffers even more.

English communication is also a major issue at Korean corporations. Many Koreans, frustrated with the emphasis on English in their country, will question the necessity of English when they never use it in the workplace. Most Koreans think that learning English is only useful as a means to communicate with foreign business partners, or for use in business emails. But they overlook the fact that a world of resources and knowledge (case studies, annual reports, professional tips) is available to them via the Internet predominantly in English, and only a fraction of what is out there has been translated thus far into Korean. Foreign workers will always have the advantage of a simple Google search, which can provide hundreds to thousands of alternative information sources to what is available to a Korean limited to searching in Korean on a portal such as Naver. 

3. Mobile Phones and Online Communication

Korea is a truly connected society with a fantastic broadband network providing some of the fastest Internet and LTE coverage in the world to its businesses. However, the ease and preference for communicating online or through a messaging app on a phone is becoming a real issue in the workplace. Levels upon levels of an office building are so silent that they sound like a library. Everyone is tapping away furiously at their workstations, and you can easily presume it’s because everyone is working very hard. But check a screen and you’ll see that most workers are engaging in some form of online messaging, whether it be Kakaotalk’s desktop version, Microsoft, LYNC, or Nateon. Workers will normally be chatting away to office buddies - occasionally about work, but more often than not just wasting time. A silent rule of Korean society is that talking in the office gives off the appearance of not working, and so workers are forced to send messages via the Internet, even if the person they want to talk to happens to be sitting right next to them. If it’s not the online messengers, then it’s the mobile phones. Workers seem to check them every ten minutes or simply get up to go out to receive a personal phone call. 

In a recent survey of 706 office workers by job search portal Career.co.kr, it found that over 61 percent of respondents said they have a resting place at work. Of these 61 percent, a quarter said that they would escape to the toilets, with just under 45 percent responding that they use their phone during this time for games, Internet, SMS, and phone calls. Go into any office building toilet in Seoul and you will hear mobile message tones or game sounds going off like firecrackers.

4. Hungover Workers Taking Excessive Breaks

Korean companies encourage and pay for workers to enjoy after-hour dinners and drinks together on a regular basis, believing that it improves loyalty and interpersonal communication between workers. The only requirement is that they are at work the next day (preferably on time). It’s amazing after all these years that bonding is still considered the most important aspect to a well-functioning team, and regular hangovers are just a small inconvenience. 

Staff may as well not be at work the next day because a heaving, red-eyed, headache-ridden shell of what used to be a fully-functional worker is going to be useless for the entire next day without proper rest and recovery from the night before.

Smoking too is also a major issue affecting productivity. I do support the notion that workers benefit from regular rest breaks to get out of their seat to stretch and refresh, but the time taken to smoke is so great that non-smokers often feel that they are losing out, because they will effectively be spending, on average, 1 hour a day longer at their desks. Eventually the non-smokers catch on and begin to take 3 to 4 coffee breaks a day to also enjoy their extra hour of rest a day. In the same study by website Career.co.kr, it also found that nearly half of the 708 respondents would leave their desks to go to a rest spot three or four times a day. They would stay there for an average of 13 minutes. 

5. Form Rules Over Substance

During my time at a Korean company, one of the observations that I made was that co-workers would spend two to three days adding in an array of fancy-looking shapes, images, flow charts, and graphs to a PowerPoint presentation that contained roughly half a day of research. That is the power of perception in the Korean office, and it forces workers to spend ridiculous amounts of time “beautifying” simple reports that would take 10 minutes to present in an informal meeting or chat. 

This penchant for giving off a favorable impression exists in most company teams and departments in the form of “Yes” men and women. These employees whose prerogative is to give off a favorable impression to their superiors will sacrifice personal opinions and honest feedback for the sake of appearing loyal and subordinate. Even if this gesture of loyalty is shallow and fake, it is still appreciated over genuine communication. Often did I witness co-workers blindly repeat “yes, yes, yes” to a senior employee’s orders without the slightest query as to “why” or “how,” leaving them with little understanding of the work they were agreeing to do, and eventually a resentment towards the ones giving the orders.

6. Poorly-equipped, Older Graduates

Korean graduate employees, despite extreme competition for jobs, are under-prepared for the workplace, and come with poor research and reporting skills. This is a side effect of an education system based around testing and lack of practical applications. Many young graduates come into the workforce with next-to-zero work experience, bar a few obligatory volunteer activities. 

This is astounding, especially considering a recent survey conducted by the Dong-A Ilbo and recruitment website Incruit.com, which found that the average age of new workers in Korea was a staggering 33.2 years of age for men (up from 27.3 in 2008) and 28.6 years of age for females. The advanced age of new Korean workers compared to the West is a result of 2 years of mandatory military service for men, international gap years during university, and extra years spent studying for various certificates and qualifications viewed as essential for employment.

What that process creates is a workforce of 30-somethings with no job experience and unrealistic expectations of work and money.  A 30-year-old Western applicant of similar age has almost 10 years of real work experience over a Korean, and there is no amount of education that can substitute for that kind of difference. Such is the disillusionment with company life that recruitment website Saramin last year found that a staggering 3 in 10 new employees quit within the first year of employment, with the majority citing that their jobs roles didn’t match their aptitudes - another sign that graduate employees are not prepared for the realities of the workforce.

7. The Art of Looking Busy

In business or social situations both, Koreans have a penchant for giving off the impression of being busy. Rarely will you meet a Korean that will say they have relaxed recently. Being busy is the desired state and worn as a badge of honor. 

This leads to Korean workers staying late, much later than any of their OECD counterparts, to give the impression of being busy. Unfortunately, staying late at the office does not equate into greater productivity, and although Korean work colleagues will claim to be very busy at work, the reality is that most are over-exaggerating their workload, which brings Parkinson’s law of time into effect.

Parkinson’s law is the adage which states that “work expands so as to fill the time available for its completion.” The Korean workforce all know that they will be expected to work overtime hours whether they have work or not - it’s again another test of perception, loyalty, and social pressure. So what naturally occurs is the application of Parkinson’s law. Why finish your work by 5 o’clock when you know you will be at the office until 10 or 11 anyways? 

I believe that this style of thinking is one of the biggest hurdles in overcoming the unproductive work culture in Korea. Korean workers must be honest with themselves in the fact that they are sometimes not really that busy, but that does not make them lazy. Focusing on your work, finishing it on time, and going home on time is in fact the reverse of a lazy worker. This idea needs to be recognized and enforced in the Korean workplace.

I hope I was able to provide a little bit more insight into what issues some Korean companies are dealing with, and some reasons as to why Korea has low productivity. Of course, this is a subjective view based on my experience in a Korean work environment, but it can perhaps provide some insights to others who wonder about the floor-level view of the OECD evaluation.

A lot of the issues I have outlined are not unique to Korea, and quite rightly exist in Western companies too. However, they can be magnified in South Korea due to the deep historical and cultural aspects that are ingrained into the national psyche. Hope lies in the next generation, who are undoubtedly tired of unsustainable work practices and will struggle to remove themselves from the dogma of corporate life to affect real change in the future.

Michael Kocken is a Korean Market Consultant for Kocken Consulting. Also, check out his blog, The Sawon.