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Pay raise

Pandemic polarizes pay between tech and non-tech firms

By Mar 21, 2021 (Gmt+09:00)

Pandemic polarizes pay between tech and non-tech firms
Last year's expansion of contactless technologies and services has created a new salary gap among key industries and companies in South Korea.   

According to The Korea Economic Daily’s analysis of the regulatory filings of 20 major Korean firms, those in the bio, batteries, internet and gaming (BBIG) sectors carried out annual salary increases of 6-35% on average versus 2019 figures, whereas more traditional segments such as auto, oil and steel experienced significant pay cuts.

The country’s tech and gaming giants Kakao, NCSoft Corp. and Naver Corp. all posted average annual salaries higher than 100 million won ($88,500) for the first time, with Kakao making a 35% rise to 108 million won ($95,600), NCSoft a 22% rise to $106 million won ($93,900) and Naver a 21% increase to 102 million won ($90,300).

Kakao, NCSoft and Naver were respectively ranked as the fifth, sixth and seventh highest-paid companies in terms of average salary last year, whereas all failed to make it onto the list of the top 10 in 2019.

The three digital-oriented companies are quickly catching up to longtime leaders such as Samsung Electronics Co. and SK Telecom Co. Samsung’s average salary last year was 127 million ($112,400) and SK Telecom’s was 121 million ($107,100).

Average salary and yearly % change of 20 major companies in 2020
Company Average Annual Salary
(unit: million won)
% Change vs. 2019 
Kakao 108 +35%
NCSoft 105 +22%
Naver 102 +21%
Samsung Electronics 127 +18%
Mirae Asset 123 +18%
Celltrion 77 +12%
Samsung Biologics 83 +11%
LG Chem 93 +6%
Samsung SDI 83 +6%
SK Telecom 121 +4%
POSCO 98 +1%
LG Electronics 86 0%
Shinsegae 59 0%
Samsung C&T 100 -1%
Amorepacific 66 -7%
Lotte Chemical 88 -7%
Hyundai Motor 88 -8%
SK Energy 121 -8%
Hotel Shilla 50 -15%
Korean Air 68 -16%


NYSE-listed Coupang Corp. also set a new benchmark for entry-level software developers in Korea by offering an annual salary of 60 million won ($53,100). Coupang is also offering a signing bonus of 50 million won ($44,300) to mid-career software developers with more than five years' experience.

“With the recent blurring of industry boundaries, platform-based firms have expanded to other business sectors and are rapidly attracting top talent with huge salary hikes,” noted an industry official.

Other major game companies have joined in the race to attract and retain talent.  

Nexon and Netmarble increased the annual salaries of all employees by 8 million won ($7,100), while Krafton gave 20 million won ($17,700) and 15 million won ($13,300) raises, respectively, to software developers and employees in non-software functions.

NCSoft announced a more comprehensive pay change at all levels. It will provide at least a 13 million won ($11,500) raise for software developers and at least a 10 million won ($8,800) raise for other functions, abolish salary ceilings for entry-level employees and set a salary floor of 55 million won ($48,700) for software developers.

Its CEO Kim Taek-jin also gave out a special bonus of 8 million won ($7,100) to every single employee of the company.

NCSoft’s series of actions are interpreted as a measure to prevent its talent from moving to rival companies, such as Naver, Kakao, Line, Coupang and Woowa Brothers, that are known to provide better incentives and working conditions for software developers.


On the other side of the economy, COVID-19 has fueled pay cuts in multiple industries that previously drove salary growth. SK Energy, the oil refining unit under SK Innovation, which boasted the country’s top average annual salary in 2019, saw an 8% cut to 121 million won ($107,100).

Other traditional big names such as Hyundai Motor Co. and Amorepacific Corp. also saw an 8% cut and a 7% cut, respectively.

More serious cuts were conducted in the pandemic-hit hotel and airline industries, with Korean Air Lines posting a 16% decrease to 68 million won ($60,200) and Hotel Shilla a 15% decrease to 50 million won ($44,300).

Korean Air Lines had put its staff on leaves of absence last year while Hotel Shilla recorded the first annual loss since the company’s incorporation.  

“COVID-driven shutdowns and working-hour reductions must have had a direct impact on pay cuts”, said Sung Tae-yoon, a professor of economics at Yonsei University.

The country’s top companies like Samsung Electronics and LG Electronics are also reported to face difficulties in handling the recent wind of change brought by the tech and gaming firms.

Samsung is currently having a stalemate in this year’s wage negotiations, with the company offering a 3% increase whereas the employees are asking for around 6%. Samsung’s pay rise last year was at 2.5%.

“Many of us at Samsung were shocked at the news that a director-level executive in the AI business moved to Coupang with stock options and a 50% pay rise,” said a Samsung source working at the company’s mobile division.

Facing the same talent grab competition, LG Electronics has made a swift move to raise salaries by 9% this year, the biggest rise since 2000. LG Electronics marked the highest earnings last year in the company’s history.

Experts argue that the recent reshuffling of the country’s major companies in terms of salary, as well as a shift in the industry structure as a whole, are rendering US-style incentive-based pay schemes more common than seniority-based pay schemes.

“Compared to the smaller tech firms, traditional manufacturing giants are having difficulties in reforming pay structures, as they rely more on systems for value creation than tech firms that rely on individual talent. This means that they must take other factors such as seniority into account,” noted Yang Joon-mo, another professor of economics at Yonsei University.

Write to Jae-Yeon Ko and Kyeong-Je Han at

Daniel Cho edited this article.

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