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"War for Talent" was the name of a study conducted by McKinsey in the late 1990s. The study itself may not have been the spark, but the period marked the point at which companies around the world began to recognize the importance of attracting, developing, and managing talent as a defining management theme going forward. In Korea, many companies used this period as a starting point to strengthen their HR function and to intensively benchmark talent-management leaders such as GE.
For Korean companies at that time, the "war for talent" was a hint about how to bring in high-capability people from a local education environment that offered little diversity, how to grow them quickly inside a deeply rooted seniority-based culture, and what systems and management techniques would make that possible.
From that point onward, HR organizations inside Korean conglomerates grew larger, and "developing talent" was added as a KPI for professional executives. Companies began to discuss how to develop their core talent, tagged them with "Fast Track" labels, and created pathways for faster promotion and more important assignments. It was a small effort to overcome the culture of seniority.
These changes were both necessary and possible in part because "lifelong employment" was still common sense in Korean corporate employment.
In exchange for promising lifelong employment, companies could defer the labor cost of paying today's young, capable talent into the future. And employees, on their side, had the institutional backing of permanent employment that gave them peace of mind — continued employment and steadily rising pay steps were guaranteed. Of course, these institutional guarantees sometimes became shackles on the company. And when the economy entered a low-growth phase, the system was a factor in producing too many non-regular workers and concentrating unfavorable treatment on them — to the point where it has been cited as the cause of a "modern caste system." But, at a high level, it is true that both companies and individuals had implicitly "enjoyed" the promise of lifelong employment and adjusted around it.
Recently, however, this traditional lifelong-employment system has been facing dismantling. The notion that a single employee will build their entire career at a single employer is no longer common sense.
Behind the shift away from lifelong employment as common sense is the development of the "talent market." Rather than sharing a lifelong career with a single company, the talent market operates on the principle of continuously developing a single area of job expertise and being paid for performing that job at multiple companies over time.
The talent market has generally been seen as a shape typical of the U.S. labor market, and has been thought of as something that did not really apply in Korea — where it is more common to belong to a single conglomerate, rotate through multiple jobs, and climb up titles by seniority. But now, a talent market is gradually forming in many fields in Korea as well. The clear leader among these is software development, which powers the IT industry. The range of change that IT jobs — at the front line of the talent market in Korea — have brought is larger than anyone expected.
With the Fourth Industrial Revolution, many companies have shifted their business portfolios into software, and the demand for software talent has exploded.
And with the unexpected arrival of the COVID-19 pandemic — which put every aspect of work and daily life on top of IT infrastructure — demand for people to perform those jobs grew even further, and the profits of the platform companies building that infrastructure grew with it, driving compensation for top job experts up even more.
As the most promising and actively growing field in Korea, the competition among companies in this space has been intense, and the pace at which they have been securing compensation competitiveness to win the talent war has accelerated rapidly. This is why the jump in compensation levels in this industry in early 2021 was unprecedented.
The strengthening of compensation competitiveness originating in IT did not stay confined to IT jobs. Korea's business environment is dominated by conglomerates with affiliates across multiple sectors, every one of which has an affiliate or business unit tied to IT. As a result, these companies had to raise their compensation levels to avoid losing talent to their platform rivals. And because the main customers of those platform services were the flagship affiliates within the same group, those flagship affiliates had to raise their compensation in step, in order to maintain the long-standing principle of "internal alignment" across the group.
Beyond that, these conglomerates — the most common destination for top Korean college graduates — had been the largest and highest-priority buyers in the talent market. Companies that used to secure the best people on the strength of name value alone are now in a situation where they have to share top talent with IT giants.
As a result, the formation of a talent market around IT, combined with the COVID-19 pandemic, has produced in Korea — twenty years after the global conversation about the war for talent —
the most intense talent war the country has ever seen.
At the same time, we can no longer avoid talking about the part of the war for talent we had previously overlooked under the umbrella of lifelong employment: the retention of talent. The more the talent market matures, the less we can think of our people as "fish already in the basket."
In a moment when every company is competitively raising its compensation game, doing so may be the most basic tool of competition — but it is also because, beyond using compensation to hold on to people, we have not yet found any other sharp lever.
So when someone leaves even though we are paying them adequately, we need to understand what actually caused that departure. What matters for retaining people, besides compensation?
Through structured onboarding, you can quickly integrate new hires into the organization, present a concrete and compelling growth vision, and build their confidence that they will share in that growth. Surprisingly, the period in which employees most often leave is right after they join. That first stretch in a new job is, yes, a new start — but it is also a period of exploration, where the person is looking at whether this company and their own career can go together. If a company cannot offer a proper vision during this period, the new hire will either leave, or — even if they stay — will show up in body only, thinking, "When can I move without being labeled a 'journeyman' for switching jobs too often?"
For effective onboarding, Google uses a "Just-in-Time" onboarding approach grounded in five simple principles.
① Have a clear discussion about role and responsibility
② Assign a Peer Buddy for the new hire to work with
③ Help new hires build a social network — introduce them to group chats, groups, and clubs
④ Run at least one Check-in Meeting a month for the first six months to monitor onboarding progress
⑤ Encourage open conversation
<Google's Five Onboarding Principles>
When a strong, positive organizational culture embraces every employee and moves them to action, they are more likely to grow into loyal contributors.
Whether the culture expressed through colleagues inside the organization is aligned with an individual's values carries a level of importance that goes beyond the usual things people weigh when choosing a workplace — job, compensation, treatment, location, attendance, and work-life balance.
According to a 2018 survey by global staffing firm Robert Half, 35% of jobseekers said they would be willing to turn down a role even at a company that was a "Perfect Fit" in terms of job, compensation, treatment, and environment, if the company's culture did not suit them.
And 72% of current employees said organizational culture was the single most important factor in continuing to work at their company — showing that culture is a stronger retention factor than compensation levels alone.
A Jobvite survey found that among employees who left within 90 days of joining, 32% cited organizational culture as the reason. In other words, during the exploration period, new hires keep doing the math on the shape of the culture, their own future, and their growth vision. If they conclude "this culture is not a fit for me," they will leave without looking back. If you are seeing an unusually high rate of early departures? The problem may not be compensation — it may be culture.
Job satisfaction is related not only to the intrinsic qualities of the work itself but also to recognition for the achievements produced by doing it, the opportunity for growth into higher-value work, and clear role, authority, and responsibility so the work can be done smoothly.
The fact that job satisfaction is more effective than other factors at lowering employee flight risk has been a well-established finding since research in the 1970s.
A 1973 Harvard Business Review study observed many cases of attrition and compared them along two axes — job satisfaction and environmental pressure. It found that if job satisfaction was high, employees could overcome environmental pressures (long hours, treatment, difficulty) and stay with the company. Conversely, if job satisfaction was low, even favorable environmental conditions could not prevent a departure. This supports the interpretation that job satisfaction, like organizational culture, is an intangible and internal factor — but one that acts much more powerfully on employees.
Another lever is to create "things that keep employees from leaving unless they have a specific reason to" — in other words, to build more inertia.
Examples of inertia levers include long-term compensation (like stock options) and support tied to life stages, such as benefits for employees' children (e.g., tuition support).
As mentioned at the start, as competition for talent has intensified especially in Korea's IT industry, long-term compensation tools like stock options have been used as important levers for holding on to people at all costs. But when using long-term compensation like this, what should be examined is not just the size or level of the reward, but whether the reward actually creates inertia — whether it provides motivation to produce even higher performance.
In that regard, a 2017 paper1 observed that the effect of equity compensation like stock options actually split into two opposing results.
One was that large stock option grants to high-performing executives did nothing to prevent those executives from leaving.
The reason: they were already prime targets for competitor recruitment, and since they could move with sufficient compensating offers — such as sign-on bonuses that guaranteed the value of stock options whose vesting period had not yet been reached — the program showed no retention effect at all for star-level executives. On the other hand, longer tenure and higher option exercise rates were observed among ordinary executives who could not be expected to produce the performance of externally recruited stars. They chose to stay with the company and enjoy long-term compensation rather than move.
In short, long-term compensation such as stock options — offered to attract star executives and hold onto them at all costs — may fail to deliver the intended effect. When offering this kind of compensation, it is worth asking whether the form actually fits the company's long-term performance objectives. For example, combining broadly offered time-based equity compensation (such as RSUs) with performance-linked payouts, and layering in stock ownership programs to minimize flight risk, can act as a two- or three-layer safety net.
As the recent changes in Korea show, the emergence of a talent market set off by the Fourth Industrial Revolution is expected to accelerate across every job in the country going forward. The transition to job-based pay in public institutions is slower than originally announced, but the direction has not changed or been invalidated — and a job-centered talent market will continue to displace seniority- and pay-step-based "lifelong employment" workplaces, starting with the public sector.
Reflecting this, the so-called "group-wide new graduate recruiting" of Korean conglomerates came to an end in 2021. The old HR pattern — group promotions by recruiting cohort, with people "assigned" by company decision regardless of their field — is becoming a thing of the past.
Companies are now in an era where they must pay the talent market's going rate to hire job experts who can contribute as full contributors from day one. We are moving into a time when the top expert we hire today could be lost tomorrow to a company willing to pay just ten thousand won more.
In the end, differentiation has to come from the environment of the job, the growth vision, and the culture we offer people to work within — not from compensation. Many Korean companies are already thinking hard about how to renew their organizational culture so that it appeals especially to younger talent.
Twenty years after "war for talent," in today's era of "infinite talent competition," companies need strategies for raising organizational culture and job satisfaction in more valuable ways — securing a horizontal organizational culture, bringing in job expertise and fast performance feedback through agile ways of working, and actively leveraging flexible work environments and smart work.
1) T. Jochem et al., "The Retention Effects of Unvested Equity: Evidence from Accelerated Option Vesting," The Review of Financial Studies, 2017.