South Korea’s three largest shipbuilding giants, HD Hyundai Heavy Industries, Hanwha Ocean and Samsung Heavy Industries, have each hired more than 1,000 new foreign workers this year. Due to the recent active orders from shipyards, shipbuilding orders have piled up, and foreign workers are needed to make up for the shortage of domestic labor. With the active cooperation between local governments and ship companies in recruiting workers, it is expected that the proportion of foreign workers in shipyards will continue to increase.
The number of foreign workers at HD Hyundai Heavy Industries’ Ulsan shipyard increased to 4,500 this year (as of December) from about 3,500 at the end of last year, according to industry sources. The number of foreign workers at Samsung Heavy Industries Geoje Shipyard also increased from 3,500 to 4,600, and Hanwha Ocean Geoje Shipyard employs more than 1,000 foreign workers. Given the recent boom in shipbuilding, shipyards are expected to continue hiring foreign workers next year.
The diversity of nationalities is also gradually expanding, with hiring expanding from Southeast Asia, where it was previously concentrated, to Central Asia. Samsung Heavy Industries reached an agreement earlier this month to hire a large number of Uzbekistani workers by 2025. These workers will travel to South Korea on multiple-entry E-7 visas, which are usually issued to skilled workers and are valid for three years.HD Hyundai Heavy Industries also plans to hire 350 professionals from Uzbekistan.
Industry stakeholders said, “Not only shipyards but also local governments are carrying out various cooperation and programs to recruit foreign workers. Currently, about 20% of workers in the domestic shipbuilding industry are foreign workers, while the proportion of newly recruited foreign workers is close to 80%, so the proportion of foreign workers in shipyards is bound to increase rapidly.”
Shipbuilders are aggressively importing overseas labor because they are facing a “manpower shortage” despite the super-boom period in the domestic shipbuilding industry. Currently, the order books of the three major shipbuilders are saturated. HD Hyundai Heavy Industries’ order book increased from 13 trillion won at the end of 2020 to 34 trillion won in 2022, and surged to 46 trillion won this year. Samsung Heavy Industries currently holds an order book of about 31 trillion won, more than double that of four years ago (12 trillion won). In contrast, the more conservative Hanwha Ocean has tripled its order book from 9 trillion won at the end of 2020 to 27 trillion won.
Major shipbuilders believe that the most realistic solution to meet the delivery deadlines of mass contracted merchant ships is to hire foreign workers. It is expected that the Korean shipbuilding industry will need about 130,000 workers by 2027, compared to about 100,000 at present, leaving a shortfall of nearly 30,000 workers.
Another industry insider said, “Since 2020, the number of orders from shipyards has increased dramatically over the past four years, but domestic workers in the field have shifted to other industries such as automobile and semiconductor factories. At first, domestic shipyards started recruiting overseas laborers for emergencies, but over time, overseas laborers have gradually become more popular due to their relative cost savings.”
As the number of foreign workers increases, shipyards are providing customized training and benefits, and workers are gaining experience, the lack of skills on construction sites has largely been resolved. In July this year, HD Hyundai Heavy Industries appointed its first foreign field team leader.
At the same time, the number of domestic employees focusing on research and design is increasing. Samsung Heavy Industries now has 10,089 employees at its headquarters, surpassing 10,000 for the first time in five years. The number of employees was reduced to 8,775 due to the COVID-19 pandemic, but is now fully staffed. Recently, the number of employees at HD Hyundai Heavy Industries’ headquarters has also increased to 14,393, recovering from a decrease to about 12,000 two or three years ago.