WHAT ARE KOREAN EMPLOYERS LOOKING FOR (AND WHAT CAN AUSTRALIAN INSTITUTIONS DO)?

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1 WHAT ARE KOREAN EMPLOYERS LOOKING FOR (AND WHAT CAN AUSTRALIAN INSTITUTIONS DO)? Ms Mary-Jane Liddicoat Counsellor (Education, Science and Training) Australian Education International, Australian Embassy, Seoul This paper represents an early pre-view of research Australian Education International is conducting this year. During , AEI will survey over a hundred Korean organisations to better understand their recruitment practices and will publish the findings in The views presented in this paper have been distilled from a selected, but influential few organisations and experts. - Samsung Electronics Korea s leading large business (employs 85,000 in Korea and 70,000 around the world). It is one of the most desired employers and barometers of change in Korea. It primarily employs engineering graduates and recruits 4,000 annually (double the number recruited in 1997); 25 per cent of these are mid-career recruits of which over half have been educated in United States and Japan. Only 15 have studied in Australia. Samsung conducts 95 per cent of its training in-house and annually sends 150 employees overseas to study to develop regional and other specialists. - Seoul Metropolitan Government is representative of most Korean Government agencies, employing 11,000 (including 9,800 permanent employees and 1,200 contract workers, most of whom are language and other specialists and have an overseas education). Its permanent employees usually have little overseas education owing to the time they need to spend preparing to sit the civil service exam. - Sample members of the Federation of Small and Medium Enterprises, whose needs are diverse; - Representatives of recruitment and executive search agencies, including those specializing in foreign-owned companies; and - Long-term resident Korea experts Tariq Hussein (author of Diamond Dilemma), Michael Breen (author of The Koreans). While this sample represents a fraction of the total Korean employment market, government agencies and large and foreign businesses are considered by many to be the highly desirable employers in Korea. As such, parents strive to given their children the best possible education to have the best chance to secure a job in one on these organisations. So this means that these employers lay the course for the race to the best education in Korea and their views and practices are important to understand because they lead the market and often cause change. Australian International Education Conference Page 1 of 7

2 MARKET OVERVIEW Koreans of all ages are keenly focused on improving their knowledge, skills and expertise particularly English language to increase their chances in a competitive job market, where 82 per cent of students continue on to higher education and unemployment among year olds at 6.7 per cent is more than double the total unemployment rate. Many consider they can gain a competitive edge by studying overseas. Enabling this off-shore flow, the Korean won has appreciated by 13.2 per cent against the US dollar (2.5 per cent against the Australian dollar) since mid-2005 and the number of affluent households has continues to increase. The Bank of Korea reported that in 2006, 430,000 Koreans spent over A$4.7 billion on overseas study and unofficial estimates the number of students and the value to increase substantially. Table 1: Snapshot of the Korean market Population 49 million Births per female 1.16 Percent continue to higher education 82% Unemployment (total)* 756,000 (3.1%) Unemployment (15-29 yrs)* 302,000 (6.7%) No. purchased o/s education in 2006** 430,000 Amount spent on o/s education in 2006** Estimated to reach by 2011** *Source: National Statistical Office (August 2007) ** Source: Bank of Korea data (2006) A$4.7 billion A$13 billion Korea continues to be Australia s third largest source country for international students, following China and India, and according to the Korean Government statistics, Australia is the fourth most popular destination for Koreans, after the United States, China, and United Kingdom. Here is a summary of enrolments to give you an idea of the size of the Korean international student market into Australia and its trends, which as you can see, has continued upward over the last six years. Table 2: Korean enrolments % increase ELICOS 6,796 9,348 9,850 10,744 13, Schools 2,838 3,805 4,417 4,558 5, VET 4,757 3,843 3,663 4,577 6, Higher Ed 3,679 4,473 4,967 5,336 5, Other ,105 1, Total 18,712 22,203 23,818 26,320 31, Source: AEI International Student Data (August 2007) In 2006, this represented 9 per cent of a A$10.7 billion industry and the market has again grown 13.1 per cent year-to-date August. English Australia estimated that in 2006 another Australian International Education Conference Page 2 of 7

3 1,250 Koreans studied English on non-student visas, and spent more total weeks and money on studying English than any other nationality. So Koreans are highly driven to study, including overseas. While some, of course, just want to have fun, the majority are seeking to secure the best, most prestigious career possible. While this research mainly focuses on Korean employers, it also touches on foreign-owned and operated companies in Korea. Many Koreans consider foreign companies, which are continuing to increase in number and size, a desirable place to work. They can also exert influence over Korean business practices, particularly in sectors (for example, financial services) where Korea is still maturing. Table 3: Korean employment market Company size No. of companies No. of employees Total all 3,204,809 15,147,471 Includes foreign 23,458 14,397 Total small 3,171,259 10,361, ,678,656 4,769, ,104 1,888, ,705 1,651, ,794 2,051,931 Total medium 31,178 2,990, ,737 1,481, ,441 1,508,918 Total large 2,372 1,795, , , , ,828 Source: Korean Statistical Information Service (2005) RECRUITMENT PRACTICES Traditionally, Korean organisations recruited young, fresh graduates straight out of university who then remained with the organization for their lifetime, while foreign companies recruited primarily through introductions and networking. Recruitment and executive placement service companies were almost non-existent. In 1997 ten years ago Korea suffered a financial crisis as did many countries in Asia. Korea repaid its IMF debt quickly and embarked on a rapid period of economic reform, deregulation and restructuring to ensure that Korea remained globally competitive. And with this recruitment practices started to shift. The first evident change is that the level of English of employees across the board particularly those under 40 has risen, including those who have never studied overseas. In the past, many Koreans may have had good scores on paper, but only those with a real front line need developed their skills to a functional level. The Korean Government is now leading a campaign to raise the English competency of all Koreans, starting at pre-school, and most Korean job applicants would list a TOEIC or TOEFL score on an application to demonstrate English ability and overall academic achievement. And that score has been rising. Australian International Education Conference Page 3 of 7

4 Furthermore, a high test score is no longer enough. Many leading businesses and government agencies have introduced their own English-language tests and interviews to independently assess English competency. These interviews are sometimes held in groups to not only assess linguistic ability, but also the applicant s ability to think, debate, persuade, communicate ideas and to adapt to group dynamics all in English. The second major shift is that today, both business and government have become more flexible and diverse in the types of employees they are seeking to recruit. For example, in addition to the traditional generalist fresh out of university, mid-career professionals, specialists, non-koreans and more women are increasingly being invited into the mix. This has happened because Korean employers cannot always find what they are looking for fresh out of university. For example, Samsung led other major corporations to start recruiting directly from overseas institutions (usually in the United States). This way they can recruit the top per cent of Korean graduates who usually continue onto post graduate study overseas after they graduate from one of Korea s top universities. However, many of these graduates are keen to pursue overseas work opportunities and it is sometimes difficult to attract them back to Korea within 10 years of graduation. This has resulted in a new flexible approach to recruiting mid-career specialists. The third evident shift is the changes to recruitment processes. Traditionally, Korean application forms include a detailed range of personal information such as place of birth and father s name, and these personal connections, and even a university name alone, could bear significant influence on the process. The phenomenon in Korea of a person s educational background and connections, rather than their actual ability and career performance, carrying more weight, has become known as credentialism. Now, prominent corporate and government employers have announced that they conduct blind recruitment, which means hiding such personal details, even university names, from the selection panels to enable them to more objectively assess the real and potential abilities of applicant without being influenced by the name value of personal connections. While it is still too early to gauge to what extent these new processes have actually influenced the recruitment process and outcomes, it is important to note that public debate about credentialism is growing and some are responding with new recruitment paradigms. Another shift worth noting is that among SMEs, unlike in the past, holding a degree is often no longer a pre-requisite (although many do have degrees). Instead, these enterprises are primarily interested in recruiting people with the actual field skills and expertise, particularly in the ICT, gaming and associated industries. This may be driven partially by the fact that SMEs are finding it increasing difficult to attract the staff they need, despite high youth unemployment. Rather than taking a job at an SME, many young Koreans choose to remain unemployed and spend their time training for interviews, and/or obtaining additional degrees, skills and qualifications to help them secure either a job with the government (the most desirable ) or with a prestigious large or foreign company. This trend was reflected recently in a survey conducted by Korean recruitment company Incruit, which showed that the number of respondents answering that they had secured their first job after the age of 30 had double since Australian International Education Conference Page 4 of 7

5 Among foreign-owned companies, networking is still favoured to recruit sales and marketing staff (ie people who know everyone), but for other staff, they now take a more balanced approach when seeking specialists, and usually use recruitment services (which as a profession is now recognised and growing). WHAT ARE KOREAN EMPLOYERS LOOKING FOR? Our initial sample research indicates that Korean employers are looking for much the same thing as Australian and other employers worldwide: - world s or at least Korea s best field-specific knowledge, expertise and skills; and - flexibility, adaptability and the ability to think and communicate as appropriate. This second point needs clarification. Globalization in Korea is focused on expanding Korea s international exports and does not necessarily mean that Korean companies operate identically to Western companies. An overriding consideration of Korean organisations is that their employees can fit into and operate smoothly in a Korean workplace. So in this context, flexibility and adaptability means that employees can seamlessly switch between Korean and international style depending on the demands of the situation. Getting the balance right is a challenge and seemly best mastered by Koreans who have done some study overseas either at school or undergraduate levels or both, but who also have had a substantial schooling and higher education experience in Korea. The introduction of blind applications and other more complex recruitment processes indicates that the Korean employment market is looking for ways to better assess the knowledge, skills, expertise, personal characteristics and potential of applicants. This is certainly an interesting development, but it is still too early to see in what way this may influence the choices students and their parents make about their education. Credentialism has a long tradition and according to the National Human Rights Commission there are no legally binding measures against discrimination based on credentialism or academic cliquism. The current intense competition to enter the best ranked universities is likely to continue for some time as the perception and reality that names will open doors persists. Finally, a word about creativity, which is often raised by government and business leaders as a skill needing to be developed more broadly to help Korea continue to lead its closing competitors. It is not yet clear what creativity really means or how education and/or business structures might best support this. STRENGTHS OF KOREAN AND OVERSEAS EDUCATIONS Before addressing the real question of what this all means for the Australian education industry, we must first clarify the strengths of a Korean and an overseas education for a Korean. Graduates of Korean institutions know exactly where they fit in and how to operate in a Korean organisation and have a Korean network or alumni. These are clearly still very important to success in Korea. Korean schooling also provides a very sound basic education; according to the latest OECD Programme for International Student Assessment (PISA) scores, one of the best in the world. Australian International Education Conference Page 5 of 7

6 In 2003, the PISA survey compared the knowledge and skills of 276, year old students from 41 OECD countries. In this survey, Korea came 1 st in problem solving, 2 nd in reading literacy, 3 rd in mathematical literacy and 4 th in scientific literacy; Australia ranked 7th, 4th, 11th, and 6th in these categories respectively. Korea produces solidly educated and often very bright students at certain levels and is now keenly focused on raising the quality of its higher education to produce more world-class research and innovation. Korea is now pouring resources into this sector to help some of its 370 higher education institutions secure high places in the international league tables. An overseas education can provide Korean students with a range of complementary benefits such as an international-standard curriculum, technical and other knowledge, professional qualifications, skills and expertise which is either not available in Korea or is of a lesser quality to that offered overseas, international networking opportunities, and a good level of functional English. In addition, Korean employers are increasingly recognising and valuing a range of personal strengths students gain through the extended interactive experience of living and working overseas, but outside classroom learning strengths such as learning to think independently, to function out of the comfort zone, and being able to see the big picture. This is the point of differentiation particularly valued by foreign employers in Korea, for whom English competency is no longer enough to guarantee a job. It is the ability to think, to contribute to the business and to take the initiative, to have common sense and a global mindset, good communication and interpersonal skills. Finally, the majority of the employment market (over 10.6 million people) work in enterprises of less than 50 employees and nearly 5 million people work companies with fewer than four employees. While the research has not yet drilled into this segment, the skills mentioned above would certainly support setting up, running or managing enterprises of this scale. WHAT CAN AUSTRALIAN INSTITUTIONS DO? Understanding a little about the changing dynamics of the Korean employment market is certainly interesting, but it is also an important step to understanding what practical measures Australian organisations can introduce to attract and support Korean students. Distil and articulate clearly exactly how your institution can help Korean students become what Korean employers are looking for and help them get the balance right between both their Korean and overseas education. Identify what your organisation does that is demonstrably world-class. Highlight your achievements in research and innovation, your global networks, your international influence and demonstrate real outcomes of your former Korea graduates. This will help to reassure and attract potential Korean students. Show how your organisation supports Korean students to gain an integrated and full experience, including homestay, jobs, work experience, internships, and interaction with students outside the Korean community comfort zone. Highlight your organisation s links to Korea (create them if you don t have any) and show students how they can use these linkages to establish Korean networks and alumni even while studying in Australia, for example, through dual/joint degrees, articulation programs, study abroad years (in particular, linkages with the top Korean universities). Australian International Education Conference Page 6 of 7

7 Harness the power of the Korean-language media, internet, your Korean alumni, their family and friends, your agents, and AEI Korea, to get these messages across to as many people as possible. Korea is not an easy market and success is not usual without strategically dedicating time, energy and resources. We are very happy to support you devise strategies, select partners, maintain and strengthen relationships, and enhance your knowledge of Korea s business culture. Australia is not alone in recognising that the Korean competitive desire to excel offers many opportunities for the international education industry. Korea is now a target market for many countries, including new competitors from Asia and Europe. Korea itself is seeking to become a competitor. Further raising Australia s profile as providing a quality, innovative and caring education environment at all levels is the key to staying in the top of a highly competitive pack. This paper and this year s research project is a small part of what AEI is doing to achieve this aim. Australian International Education Conference Page 7 of 7