To keep up with minimum wage and inflation, the majority of Korean companies gave their employees a bump in their pay, according to the Saramin HR Research Institute.

Saramin surveyed 332 companies on the wage increase status for 2023, of which 67.5% said they had already decided on wages this year. Among those businesses, 78% said they have raised the salaries of their employees, while the remaining 22% have either frozen or cut employee salaries.

The average rate of pay increase for companies that raised wages was 6.4%, according to Saramin. Respondents indicated that management’s decision (24.6%), individual performance (19.4%), inflation (18.3%), and company-wide performance (17.7%) were factors for the increase in salaries.

South Korean businesses signaled that in addition to inflation, there may be a movement toward providing employee satisfaction and securing talent. While the most common answer to why wages were hiked was ‘because of the minimum wage and inflation’ at 69.1%, increasing employee morale and preventing turnover came in at 44%.

The companies that did not raise salaries cited poor performance last year and a grim outlook this year as they prepare for the aftermath of the recent complex economic crisis.

Meanwhile, around 40% of the companies that doled out raises predict the wages will remain stagnant for at least two to three years.