Fierce Competition to Recruit AI Talent in Korea: Why 76% Switch Jobs Within Three Years

Analysis of Employment Trends for Foreign Digital Talent in Korean Companies and Universities

Initial Salary at U.S. Tech Giants Reaches $400,000—Korea Faces Brain Drain

According to the report titled “Employment Status of Foreign Digital Talent in Korean Companies and Universities” by the Software Policy & Research Institute (SPRi), Korea’s growing reliance on foreign talent is paradoxically due to the increasing exodus of domestic AI professionals to overseas opportunities. As of 2023, while approximately 72% of OECD countries are net recipients of AI talent, Korea ranks among the lowest alongside Israel, Turkey, Greece, and Hungary in terms of talent inflow-outflow index.

Salary Disparity Drives AI Talent Exodus

A major driver of this brain drain is the significant wage gap. Entry-level salaries for graduates with master’s and Ph.D. degrees at top U.S. tech firms often exceed $400,000, starkly contrasting with compensation offered by Korean firms. Additionally, limited R&D support and outdated research infrastructure worsen the issue. A lack of access to high-performance computing resources such as GPUs and difficulties securing large-scale datasets are pushing researchers abroad.

SMEs Rely More Heavily on Foreign Talent

The survey found that mid-sized companies employ the highest proportion of foreign digital talent at 7.1%, compared to 3.1% in large enterprises and 6.2% in small businesses. Notably, 55.8% of foreign hires are at the intermediate level and 27.3% at the advanced level, indicating strong demand for skilled professionals.

Excluding overseas business expansion, the primary reasons for hiring foreign talent are the domestic talent shortage and relatively lower wages. In fact, 43.4% of respondents noted that foreign digital talent earns less than their Korean counterparts, highlighting cost-efficiency as another factor.

Remote Work Gains Ground; India and Vietnam Lead Supply

While 49.0% of foreign digital talent work on-site, a significant 39% are employed remotely, reflecting the location-independent nature of digital work. However, SMEs face challenges in remote work management, administrative tasks, and overseas payroll, underscoring the need for systemic support.

By nationality, the majority of foreign talent comes from India, followed by Vietnam, North America, China, and Japan. Most are employed under the E-7-1 (specialized talent) visa, but 76.2% remain in Korea for less than three years, indicating high turnover.

Mismatch Between Hiring Channels: Referrals vs. LinkedIn

Korean companies cite difficulties in obtaining information and verifying the capabilities of foreign candidates. Post-hire, communication issues are the most commonly reported challenge. Most companies rely on personal or employee referrals, underscoring the lack of a systematic information-sharing platform.

Interestingly, foreign professionals prefer using LinkedIn for job searches, while Korean firms depend on informal networks, leading to a serious mismatch in recruitment channels.

Triple Burden: Housing, Finance, and Cultural Adjustment

Foreign professionals face challenges beyond work. Interviews revealed difficulties in finding rental housing, especially due to unfamiliarity with Korea’s unique “jeonse” (lump-sum deposit) system, which is further complicated by limitations in financial services. Cross-border fund transfers are also hindered by restrictive regulations.

Daily financial transactions pose difficulties due to barriers like the requirement for Korean mobile numbers to access banking services, mandatory use of digital certificates, and complex wire transfer processes. Some platforms even fail to recognize foreigner registration numbers, making service access impossible.

Cultural adaptation presents another layer of difficulty. Foreign workers often struggle with Korea’s company-centric culture, long working hours, limited vacation use, and frequent after-hours gatherings. These elements contribute significantly to talent attrition.

Key Policy Priorities: Information, Incentives, and Visa Reform

Surveyed companies highlighted three key policy demands:

1. Enhanced access to information on foreign professionals
2. Financial incentives and tax support for hiring foreign talent
3. Simplified and relaxed visa issuance procedures

Universities ranked visa-related reforms as the most pressing issue. In terms of urgency, companies emphasized the need for better information, while universities prioritized financial subsidies.

Foreign talent also reported difficulties in the visa application process, citing unclear documentation requirements and inconsistent information across websites. These issues result in excessive time and cost burdens.


FAQ

Q: Why is hiring foreign digital talent important for Korean companies?
A: With a deepening shortage of domestic AI professionals, attracting top global talent is essential to remain competitive. This is especially true for mid-sized and small enterprises, where reliance on foreign talent is already as high as 7.1%.

Q: What are the main challenges faced by foreign professionals in Korea?
A: Communication barriers due to language differences top the list. Additionally, adapting to corporate culture, handling visa renewals, and securing housing are significant concerns.

Q: How do companies prefer to recruit foreign talent?
A: Companies tend to rely on referrals from foreign colleagues or current employees. However, foreign professionals favor online platforms like LinkedIn, resulting in a mismatch between talent supply and demand.

The report cited in this article can be accessed at the following link.

Image Source: Ideogram

This article was prepared using Claude and ChatGPT.