Korean firms appoint more young executives for agility

Korea's top companies are appointing young members in their 30s and 40s to key positions amid the increasing competition to develop new businesses. / gettyimagesbank

Companies also seek better communication with Gen MZ workers

By Kim Bo-eun

Korea's major companies are shattering their formerly rigid, rank-based and hierarchical cultures by promoting talented young workers in their 30s and 40s to executive positions, in a bid to make their organizations younger and more agile, and able to respond to changes.

What is noticeable is that this is not an isolated development at a few companies, but in fact has become an industry-wide trend, which has led to a major generational shift at many Korean companies.

Most firms are increasingly becoming aware of the importance of a flexible organizational culture and leadership, as they scramble to develop new businesses in emerging sectors, such as artificial intelligence and the virtual world.

The growing voices of the MZ generation ― Millennials and Generation Z workers in their 20s and 30s ― constitute a key driver behind the latest transition. Younger workers refuse to accept Korea's rigid, decades-old corporate culture, which includes promotions based on seniority, a vertical decision-making structure, having to stay late at the office and the obligation to have lunch or drinks with superiors. This generational difference had been causing conflict within companies in recent years.

Corporate management has been keeping up with the latest generation's needs by moving younger members into key positions.

Portal giant Naver recently tapped Choi Soo-yeon, 40, to be the CEO of the company. Naver rival Kakao also appointed former KakaoPay CEO Ryu Young-joon, 44, as a co-CEO.

Chipmaker SK hynix appointed its first executive in their 30s, under the title of, "MZ Generation Leader."

LG Group said that members in their 40s account for 62 percent of the group's 132 newly appointed executive positions. Members born in the 1970s now account for 52 percent of all executive positions, up from 41 percent last year.

These companies have experienced clashes with younger workers, as they claimed they were not sufficiently compensated despite the firms' handsome performances.

At LG Electronics, a new union, comprised of office workers, was launched in March, propelled by MZ generation employees who demanded better pay.

"Companies need to respond swiftly to changes in the industry, and this is why they need younger members in leadership positions," an industry official said.

Samsung is set to announce its executive-level promotions this week. The No. 1 conglomerate is also expected to promote a large number of young employees, based on its HR system's new innovation plan, unveiled last month.

"Companies need members who are familiar with coding and other related skills in key positions, in the era of the Fourth Industrial Revolution," Sejong University professor of Business Kim Dae-jong said.

"They also need younger members in executive positions to be able to understand the MZ Generation. Finally, firms need young, competent employees to know that their company is fair and promotes staff based on performance; otherwise, skilled members will leave to go to a more satisfying workplace and the company will end up losing talent," Kim underscored.

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