By Dr Peter Matanle
Gender and generational dynamics are key factors in the implementation of successful ESG strategies but are often overlooked in the debate about the impact companies have on the environment and their governance structures.
We have been studying South Korea as it has evolved into one of the world’s leading economies. While it is at the cutting edge of technology, there are growing social tensions behind the scenes as more highly educated women enter the workforce and are not prepared to accept the old norms of male domination in corporate hierarchies.
It is a clash between traditional values and modern aspiration that will ultimately be repeated across the whole of East Asia, the centre of global manufacturing. There are also echoes of what companies in the US and Europe have been wrestling with for the last four decades.
South Korean companies tell us in interviews about a wide gap in attitudes and values between different generations in their workforce. This hinders effective communication between management and employees and may underlie sub-optimal decision-making on hiring, promotion and leadership.
This is potentially important for business performance over the long term. So, me and my team at Sheffield University in the UK set about trying to understand the underlying causes and their possible outcomes for companies.
South Korea’s generation gap is particularly evident in – indeed caused by – significant rises in educational attainment levels. While only 27% of South Koreans aged 55-64 achieved tertiary education, the figure for those aged 25-34 is almost 70% for, a 42 percentage points increase in a generation.
The pace and scale of change in South Korea is particularly noteworthy and presents the biggest jump among all OECD countries. Even in Japan, often compared to South Korea due to similar socio-economic development trajectories, the generational achievement gap in tertiary education is less pronounced.
This disparity is sure to produce impacts within organisations as different generations of management and employees try to work together harmoniously and productively.
South Korea also exhibits a dramatic gender shift in educational attainment. Historically, men outperformed women in education, with 35% of males aged 55-64 today holding tertiary qualifications compared to 20% of females. However, this trend has reversed, with 76% of women aged 25-34 achieving tertiary education, significantly outpacing their male counterparts at 63%.
This increase in female educational attainment is the highest among OECD countries, signalling a profound shift towards gender parity in education overall.
GROWING GENDER WAGE GAP
East Asia has yet to adjust itself structurally and practically to these emerging gaps. Despite educational advances, highly educated South Korean women face significant wage gaps once they enter the workforce. Japan, once more, is similar though less pronounced.
The gender wage gap in South Korea stands at a staggering 31.2% – the widest among OECD countries. This gap suggests that although South Korean women are among the best-educated globally, their skills and talents remain under recognised and undervalued in the workplace.
Legal frameworks like the Equal Employment Opportunity and Labour Standards Acts are in place to ensure equal pay for equal work. However, the persistent wage gap is a symptom of deeper structural issues.
Women often bear the brunt of unpaid domestic responsibilities, such as childcare, which limits their ability to respond to companies’ demands for employees to work long hours, respond to overtime demands or participate in work-related social events. These requirements are culturally embedded within organisations and were developed at a time when employees and managers were predominantly male.
Consequently, it’s hard for women to maintain continuous, meaning unbroken, employment and companies are therefore more reluctant to invest in the development of their female workers.
This creates a circular and cumulative disadvantage for women, leading to fewer career advancement opportunities and lower wages over time. The outcome is a widening achievement and earnings gap between men and women as people get older, despite the fact that, on the whole, women are now better educated than men.
Like Japan, South Korea faces significant demographic challenges that compound these gender and generational issues. It has one of the lowest fertility rates in the world, at 0.72 children per woman in 2023, far b