Companies creating youth and regional jobs to receive preferential subsidies and policy loans; new 'AI Youth Coach' program to link trained talent with small businesses

A job listings board at the Seoul Western Employment and Welfare Plus Center in Mapo-gu, Seoul, as the number of employed workers posted gains for two consecutive months. [Yonhap]
A job listings board at the Seoul Western Employment and Welfare Plus Center in Mapo-gu, Seoul, as the number of employed workers posted gains for two consecutive months. [Yonhap]

Companies that expand youth hiring alongside investment will soon qualify for larger subsidies and preferential policy loans. The government is moving to tie fiscal support to job creation, aiming to drive growth and employment simultaneously amid growing concerns that the spread of AI could fuel "jobless growth."

The Ministry of Planning and Budget unveiled the plan — jointly developed with related ministries — at the third ministerial meeting on youth policy, chaired by Prime Minister Kim Min-seok on Monday. The measures were drawn up in response to concerns that accelerating AI and digital transformation is reducing youth employment and hollowing out regional job markets.

The government's first step is to introduce "employment incentives" into corporate support programs. Companies that expand hiring of young workers or local talent while investing in facilities and equipment, relocating to the regions, or expanding their operations will receive additional subsidies, preferential interest rates on policy loans, and expanded interest-rate differential support. A post-management framework will also be put in place to withhold incentives or restrict follow-on support from companies that fail to meet their hiring commitments.

Specific programs have been identified for the new conditions. Hiring-linked requirements will be built into large-scale investment support programs — including the Five-Pole Three-Special Growth Engine special subsidy, the reshoring investment subsidy for companies returning to South Korea, the cash support program for foreign investors, and the regional investment promotion subsidy. Growth-support programs such as Global TIPS, the AI big-tech development project, and the SW High-Growth Club support program will be restructured to award bonus points to companies with strong hiring records.

The government will also strengthen support for maintaining employment during industrial transitions. A new "employment crisis recovery package" will bundle short-hour work arrangements, job-function retraining, and redeployment training into a single support scheme. Labor-management joint training for industrial transitions and AI-specific education will also be expanded.

A new program will connect AI talent with small and medium-sized enterprises and small business owners. The government plans to launch an "AI Youth Coach" initiative that will dispatch young AI professionals who have completed government-funded vocational training to small businesses and sole proprietors, or link them directly to job openings. AI transformation and digital transformation consultants will also be trained to serve small business owners. The government is additionally reviewing wage subsidies for small and mid-sized companies that hire graduates of AI training programs.

The government also plans to establish new national qualifications in the AI field. It will introduce "AI Plus" national certifications that combine on-site technical skills with AI application competencies, and will expand the job-skills bank database so companies can more easily verify the capabilities of AI talent.

The specific scale and structure of the programs will be finalized during the 2027 budget drafting process. The government plans to evaluate the employment impact after a pilot phase and gradually expand the scope of eligible programs.

"This plan is both an immediate response to improve employment conditions for young people and a strategy to reshape the future job landscape," Minister of Planning and Budget Park Hong-keun said. "We will continue to identify tasks in the employment sector so that good jobs are created and everyone can find an opportunity to work when they want to."


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