HR Career Paths in Korea: Can a Multinational Compete with the Chaebol?

Across all countries there is always a certain amount of patriotism around home-grown companies, but perhaps there is nowhere where this is stronger than in Korea. The Korean multinational conglomerate, or ‘Chaebol’ is a force unto itself. Often compared to the big ‘keiretsu’ conglomerates of Japan, the Chaebol are different because they are still largely controlled by their original founding families. And unlike the big Japanese multinationals like Sony, Panasonic and Sharp, who have seen huge declines in profitability in recent times, the Korean Chaebol such as Hyundai, LG and especially Samsung are often outperforming their international competitors on the global arena. So what does this mean for the multinational HR profession in Korea?

In short, it means trouble. The Chaebol can offer HR roles and a sense of job pride that most multinationals can’t compete with. So it’s important that Multinational companies keep this in mind when recruiting and retaining HR talent in Korea, especially in industries where one of the Chaebol is a large domestic competitor. There are three particularly important factors in this equation: Scale, International Coverage, and Corporate Culture.

1) Scale

a) The Multinational

In terms of scale, the vast majority of non-Korean multinationals can only sustain small employee populations in Korea. The mode average size is somewhere around the 100 employee mark. This has a hugely inhibiting effect on the development of multinational HR talent in Korea, because many HR managers need to work as sole contributors in these kinds of environments, where there is no time to devote resources into the more strategic elements of HR leadership. And because there is only one HR person in the Korea office, there is also often a distinct lack of mentorship, which the remotely based Regional HR Leader overseas can only do so much to address. Moreover, there is simply no way for the HR manager to grow and to map out a long-term career path: there are many cases where the HR Manager hits their career ceiling in a multinational company very quickly.

b) The Chaebol

In comparison, Korean Chaebol can offer very large domestic roles to their HR teams, and can often include team leadership roles managing large numbers of HR staff. This offers the HR professional a very different kind of career experiences, where there are multiple career paths, team leadership experiences, and a lack of complication in matrix reporting lines.

c) The Comparison

In most cases, there is very little that a company can do about its size in Korea. So if your multinational is one of the many that has just 100 employees, then you may need to accept that your marketability will be limited when competing against a heavy-hitter Chaebol. Conversely, if you are lucky enough to be in a multinational with a local employee size in the multiples of hundreds, then you can really start to use this as a potential draw for prospective employees — even though you can’t compete with the Chaebol in scale, you can at least distinguish yourself from the other multinationals in the Korea market.

2) International Coverage

a) The Multinational

While there is very little that can be done about the scale of your HR operations in Korea, there is something that can be done about the international coverage given to HR leaders in Korea. The great news is that more and more multinational companies are starting to create sub-regional and even regional roles based out of Korea. In most cases this is a structural decision because a regional/sub-regional HR role needs to be created to mirror a regional/sub-regional business leadership role that exists in Korea. However in other cases the role has been created as an HR talent retention plan to ensure that a gifted Korean HR leader does not become a flight risk once they inevitably outgrow the confines of their smaller Korea-only role. More multinationals need to develop the flexibility to create roles like this in Korea, so that even if a regional/sub-regional role doesn’t currently exist in Korea, the Korean HR talent can always feel that there is the potential to have something bigger to strive towards without switching companies.

b) The Chaebol

The Korean Chaebol can offer the HR executive quite an international career path. Many of these companies have been extremely successful in expanding overseas beyond the borders of Korea, and there is significant scale in their international operations to allow a Korea-based HR executive a long term international career path without even needing to leave Korea. There can be local, multi-country, regional, international and global roles all to aspire towards in most Chaebol environments, covering not only the HR Generalist career path, but also in all the specialist HR roles such as Recruitment, Talent, C&B and ER.

c) The Comparison

The distinguishing fact that Multinationals need to accentuate is in the quality of the regional or sub-regional responsibility that is either available or potentially availably in the company. In multinational environments, the role of the Regional HR leader is much more consultative and nuanced than in a Chaebol operation, since there is normally a little more latitude in dealing with team members and stakeholders in other countries. In a Chaebol environment, there is still very much an emphasis on the ‘Korean way’ of doing business, and the regional HR leadership role can be a much more about dishing out instructions and commandments rather than truly emphasising an ‘international’ decision making process. In Chaebol, the role itself can often be the factor that commands respect, so there is less of an emphasis on the quality of the HR leader themselves. In multinationals, it can be perhaps argued that the regional HR leader can be more proud to have truly earned their success.

3) Corporate Culture

a) The Multinational

This is the area where the non-Korean multinational company truly has a chance to shine in comparison to the Chaebol. A multinational has the wonderful luxury to ‘pick and choose’ from which areas of traditional Korean culture to adopt, and which to subordinate. So they can have a highly respectful culture, without necessarily adopting an overly deferential and seniority-based approach. They can adopt a ‘fun’ culture, without putting pressure on company employees to bond through late night drinking sessions. And they can develop a performance-led culture where one person’s achievements can be applauded and where strong employees can truly see the results of their efforts and successes.

b) The Chaebol

By contrast, the Korean Chaebol can often (but certainly not always!) be a less liberal, less transparent, and less ‘fair’ environment. Decisions can often be made from ‘up on high’ and it can be hard to influence change; employees can often be discriminated against due to factors such as seniority or gender; and the homogeneous nature of the workplace environment in itself can sometimes be a lot more ‘boring’ than an environment where there is a greater diversity of people.

c) The Comparison

Perhaps the greatest learning for many non-Korean multinationals is to not be scared to be different in Korea, and not be scared to sometimes do things that might be seen as ‘disruptive’ in a more conservative Korean environment. This is, after all, the selling point for many Koreans who want to work in a non-Korean multinational in the first place. And this is particularly important to HR people, who when compared to other business and functional employees are much more affected by ‘soft’ factors such cultural affinity, chemistry with co-workers and workplace environment than other employee types in the workplace.

The simple conclusion to this article is as follows: If you have a small Korea employee size, with no career path beyon
d the Korea HR Leadership role, and a very traditionally ‘Korean’ corporate culture, then there’s absolutely nothing that will distinguish your multinational company in the workplace, and you cannot expect to attract the right HR talent. So if any of that sounds familiar to you, then it may be time to think again!