Special bonuses at small firms just 17.4% of large-company level; gap widens as company size shrinks

The Namdong National Industrial Complex in Incheon, a hub for small and medium-sized enterprises. [Yonhap]
The Namdong National Industrial Complex in Incheon, a hub for small and medium-sized enterprises. [Yonhap]

Women working at small and medium-sized enterprises earn roughly one-third of what men at large companies take home, according to a new report.

Noh Min-sun, a researcher at the Korea Institute for Small and Medium-sized Enterprises and Startups, released a report Monday analyzing the wage gap between large corporations and small and medium-sized enterprises.

According to the report, women at small and medium-sized enterprises earned a monthly average of 2.645 million won (about $1,710) last year — just 37.2 percent of the 7.11 million won earned by men at large companies. On an hourly basis, women at smaller firms earned 19,251 won, or 43.4 percent of the 44,315 won earned by their male counterparts at large companies.

The wage gap between large and small firms was particularly pronounced among women and non-regular workers, the report found. Analysts say a "double gap" is taking hold in the labor market, as disparities tied to company size compound those driven by gender and employment type.

Men at small and medium-sized enterprises earned a monthly average of 3.939 million won — just over half of what large-company men earned and 1.031 million won less than women at large companies, who averaged 4.97 million won.

Female non-regular workers at small and medium-sized enterprises earned 15,497 won per hour last year, just 33.2 percent of the 46,609 won earned by male regular workers at large companies. Female regular workers at smaller firms earned 21,373 won per hour — 45.9 percent of the large-company male regular worker rate and below the 23,082 won earned by female non-regular workers at large companies.

Male non-regular workers at small and medium-sized enterprises earned 20,600 won per hour, or 44.2 percent of the large-company male regular worker rate. Male regular workers at smaller firms earned 28,041 won per hour — 60.2 percent of the large-company benchmark and below the 29,232 won earned by male non-regular workers at large companies.

Overall, small and medium-sized enterprises paid a monthly average of 3.362 million won, or 53.2 percent of the 6.323 million won paid at large companies. The gap widened as firm size shrank: medium-sized companies with 30 to 299 employees averaged 4.032 million won, small businesses with five to 29 employees averaged 3.401 million won, and micro-enterprises with four or fewer employees averaged just 2.391 million won.

The gap was particularly stark in performance bonuses and incentive pay rather than in base salaries. Small and medium-sized enterprises paid an average monthly special bonus of 208,000 won last year — just 17.4 percent of the 1.195 million won paid by large companies. Even workers with similar annual salaries on paper may experience a much larger real wage gap depending on whether bonuses and incentive pay are included, the report noted.

The disparity widened across all pay categories compared with 2022. Fixed wages — covering base pay and allowances — fell from 65.7 percent to 64.5 percent of the large-company level, a drop of 1.2 percentage points, while overtime pay slipped from 36.6 percent to 32.6 percent, a decline of 4.0 percentage points.

"The wage gap between large and small companies stems primarily from an excessive disparity in special bonuses and incentive pay," Noh said. "Small and medium-sized enterprises need to build a stronger institutional foundation for performance-based compensation and expand their capacity to pay workers through innovation in how work is done."


boo@heraldcorp.com