MJ Song, a South Korean working mother with a four-year-old son, considers herself lucky because she has been able to work for one company for more than 15 years without her career being hindered by starting a family.
Her employer, a unit of Shinhan Financial Group, offers generous pay and benefits such as baby bonuses, childcare allowances and flexible working, allowing her to balance work and family life in a country notorious for long working hours and rigid corporate cultures.
Song took two years of maternity leave after her son was born then worked for four hours a day for a year, receiving half her normal salary. Shinhan also allows women to work two hours fewer a day during pregnancy and employees with children in their first two years of primary school to start work an hour later.
“I am satisfied with my job as the salary is high with a lot of benefits for working moms,” says Song. “The workload is heavy, but my PC gets automatically turned off after 6pm. It has been relatively easy to balance work and family life, while most of my friends have quit their jobs after childbirth.”
Korean financial groups have been one of the most coveted workplaces among female graduates, thanks to their competitive pay and childcare-related perks, despite technology causing wider cuts to the industry’s workforce.
Financial groups are also notable for their relatively high number of female workers in the male-dominated, manufacturing-driven economy. Female workers account for more than half of the financial sector workforce, about double the average in South Korea’s 500 biggest companies by sales, according to research group Leaders Index.
Labour expert Bae Kyu-shik says: “Financial companies have become good employers for women, thanks to their high pay and strong internal welfare benefits.”
Women boast an average 14.5 years of service at Korean banks versus men’s 15.4 years, while women’s annual salaries average Won96.9mn ($66,100), compared with Won128.4mn for men, Leaders Index data shows. Similar to the manufacturing sector, most Korean bank staff retire in their mid-fifties, but they usually receive generous severance pay and packages that amount to several years’ salary if they retire early.
Foreign lenders in Korea, such as Citibank and Standard Chartered, also offer flexible work for parents with young children, reduced hours for pregnant women and longer paternity leave. They also offer baby bonuses, although these are less generous than those from local counterparts.
As the country addresses the world’s lowest fertility rate of 0.75 per cent, Korean banks have been at the forefront of the government-led initiative to solve it by offering various childcare benefits. The demographic crisis poses a huge challenge for sustaining economic growth and providing pensions and healthcare for an ageing population.
But economic and cultural discrimination means many Korean women remain reluctant to marry and have children. South Korea has the highest gender pay gap among rich countries, with women paid almost a third less than men, despite their above-average level of tertiary education, reports the OECD.
South Korea’s male-oriented corporate culture and working hours — some of the longest in the OECD — remain a barrier to women’s labour participation, with more than 15 per cent of married women quitting jobs after having children, according to government data, while those who keep working struggle to progress in their careers.
The government has been spending heavily to counter the low birth rate, with financial groups going beyond national requirements by offering baby bonuses worth tens of thousands of dollars and up to three years of maternity leave, as well as flexible working for parents with children aged below 10 at school. Statutory leave is up to a year and a half.
Banks such as KB Kookmin and Woori last year started offering up to three years of “parental resignation” programmes for employees with children aged below seven, on top of a two-year childcare leave, with the guarantee of returning to the same position.
There are limits, however. Despite the government policy to support paternity leave — a father with a child under eight can take up to a year and a half off — men taking the leave remains at a single-digit rate at most banks because of social norms that still regard childcare and household duties as a woman’s job.
Despite the high proportion of female workers, few are at executive level in the financial sector, as most women work in retail banking, rather than higher-margin businesses such as corporate and investment banking, which are seen as better for promotions.
“There are equal opportunities for hiring, but they are not equal positions,” says Park Ju-geun, head of Leaders Index, noting there is still a 30 per cent pay gap in banking. “Women still don’t have many opportunities for promotions as they are barred from key operations like strategic planning, sales, marketing and treasury departments.”
The number of female executives is increasing after legislation in 2022 banned single-gender boards at companies with assets of more than Won2tn. But women still hold only 12.7 per cent of executive positions at South Korean banks, although this is higher than the 8.1 per cent average across the country’s 500 biggest companies, according to Leaders Index.
There are signs of improvement, however. Internet-only lender Toss Bank and the South Korean unit of Citibank both have female chief executives, while some banks offer leadership and mentoring programmes for women.
“Women are often hired for supplementary positions, so most fail to move up the ladder,” says Oh Hee-jung, deputy head of the Korean Finance & Service Workers’ Union. “Like in other sectors, the glass ceiling still exists in the financial sector, with most women struggling to shatter it.”