South Korea should build up professional employment service agencies that support young jobseekers across the full cycle — from identifying job demand through follow-up care — to address youth unemployment in the age of artificial intelligence, experts said. Some argued the government must commit tens of trillions of won to take responsibility for youth hiring if it hopes to break through the employment barrier.
Lee Sang-bok, head of the human resources development division at the Korea Chamber of Commerce and Industry (KCCI), made the case for developing such agencies as a speaker at the "Youth Jobs in the AI Era" forum held at COEX in Seoul on the 22nd. "When you compare Korea's youth employment support system with those abroad, it is questionable whether ours is of high enough quality to give young people work experience, training and job opportunities — and whether companies therefore have any incentive to use it," Lee said.
A professional employment service agency refers to an organization that provides full-cycle support for young jobseekers, covering demand assessment, training, work experience, job placement and follow-up care. Lee argued that the shift must be accompanied by a move from the current public-led employment support system to a private-led one. "In Europe, funding is pooled in the private sector and companies sometimes lead hiring themselves, but in Korea every jobs program is public-led, which brings rigid operations and a disconnect from private-sector demand," Lee said. "Only by developing trustworthy full-cycle professional employment service agencies and expanding private participation from the current roughly 4,000 companies to 40,000 or 80,000 can we provide the work experience young people want."
Such changes are needed because the AI era is hitting youth employment harder. According to the KCCI, of the 280,000 youth jobs lost between 2022 and 2026, 268,000 — or 94% — were in occupations highly exposed to AI. The shift reflects AI taking over tasks such as research and document drafting, reducing entry points for young people into the labor market. Chang Ji-yeon, a senior research fellow at the Korea Labor Institute, said: "Even if the decline in youth jobs in the AI era proves temporary, the reduced hiring we see now amounts to a market failure in which our society under-develops the next generation of specialists." Chang added that employer organizations such as the KCCI should actively step in to link work experience with hiring.
SK Group's (034730.KS) hiring-linked AI practical training program, SKALA, was presented as a leading example of tying work experience to employment. SKALA runs as a hands-on curriculum covering generative AI service development, data analysis and AI-based business execution — skills usable on industrial sites. By carrying out team projects based on SK Group's real business problems, young jobseekers can demonstrate practical competence and win hiring opportunities at SK Group affiliates or partner firms. After the first cohort of 90 launched last year drew favorable reviews, SK Group is expanding the program to sites in Ulsan and Gwangju and plans to train 1,500 people a year.
The problem is that such opportunities are rarely offered at the conglomerate level. Chung Hyung-woo, chief executive of Ingeus Korea, said: "Large and mid-sized companies need to give young people the chance to build work experience, even if it takes a grand social compromise based on government support or corporate social responsibility." Chung added: "People say collaboration matters in the AI era, but you can only build collaborative skills by actually working — and right now young people are not being given the chance to be hired as entry-level employees."
Kim Bom-i, head of the youth and adult vocational competency research center at the Korea Research Institute for Vocational Education and Training, said: "Whether youth employment programs succeed depends on how many of the companies young people prefer take part. Because preferred employers have little incentive to join government programs, it is important to design new incentives that can draw them in."
Others called for a dramatic increase in government spending. Chung Heung-joon, a professor of business administration at Seoul National University of Science and Technology, said: "With next year's excess tax revenue projected at 160 trillion won, the government — startled by a record number of young people reporting they are simply 'resting' — has spent only 900 billion won. There are many youth employment programs now, but the budgets are so small that few young people benefit. At least 20 trillion to 30 trillion won should be committed, and the government needs support dramatic enough to take 100% responsibility for youth employment until they find work."
