● Small- and medium-sized enterprises (SMEs) are the backbone of Jeonbuk’s economy, accounting for 99.96% of the State’s number of businesses and 90.49% of its number of workers. Nevertheless, lagging far behind large companies and other regions in wages, welfare, and working conditions, they bear the brunt of serious labor shortages.● The central government has, therefore, been proactively supporting the Company Welfare Fund and Joint Employee Welfare Fund to reduce the welfare gap between workers at SMEs and large companies. Additionally, it is striving to improve working conditions at partner companies by encouraging large companies to join win-win collaborative projects between primary contractors and subcontractors.
● Faced with labor market polarization, the Chungnam region is operating a joint employee welfare fund to expand welfare support for workers at SMEs, while Wanju County is promoting the Workwear Laundry Support and Breakfast Support projects to improve the welfare and working conditions of workers in industrial complexes.
● Workplaces that motivate workers and enhance their quality of life promote stable employment and settlement, thus contributing to local economic development.
● This study aims to present policy recommendations on developing region-specific employee welfare programs to improve employees’ quality of working life and further create quality jobs.
aFirst, it is vital to gain insights into the current landscape of labor welfare as well as welfare demand at regional SMEs. Although relevant institutions, including the Ministry of Employment and Labor and the Construction Workers Mutual Aid Association conduct regular surveys on labor welfare, no such information on regional workers is available. Therefore, this study recommends examining existing labor welfare systems for regional SMEs and their workers, as well as their demand for non-statutory welfare schemes, before using the findings as basic data for formulating policies to promote the welfare of regional SME workers
a Second, the creation of a joint employee welfare fund must be linked to government policies to promote the welfare of regional SME workers and improve their quality of life. The rationale of this recommendation lies in existing SMEs’ inability not only to afford welfare expenses other than statutory ones but also to effectively manage labor welfare programs. Moreover, these SMEs are finding it challenging to provide non-statutory welfare in collaboration with large companies because they have no alternative but to rely on their goodwill.
a Third, effective incentive programs must be introduced to encourage more SMEs in Jeonbuk State to embrace non-statutory welfare programs, and since it is difficult to narrow the gap in non-statutory welfare between large companies and SMEs through public support alone, active participation by the SMEs is of the utmost importance. All things considered, Jeonbuk State should provide participating SMEs with comprehensive corporate services, such as tax breaks, financial assistance, and policy-linked support
