The majority, or 78%, of companies in South Korea have decided to raise wages in 2023, with an average wage increase rate of 6.4%, according to research from Saramin HR.

The Saramin HR Research Institute surveyed 332 companies on their wage increase status for 2023. Most, or approximately 67.5%, 67.5% answered that their wages have already been decided for this year. While 78% have decided to raise wages, 22% said they had frozen or cut wages.

The most important factor in determining the rate of increase was management's decision (24.6%). Individual performance (19.4%), inflation rate (18.3%), and company-wide performance (17.7%) followed suit.

As for the reason for the wage increases, 69.1% said it was because of the minimum wage and inflation while 44% said it was to increase employee morale and prevent employee turnover.

For the companies that said they had frozen or cut annual salaries, 42.9% cited poor performance last year as their reason for doing so while 26.5% said it was to cut costs and another 26.5% added that it was because sales are expected to deteriorate this year.

Looking ahead, 40.4% of businesses predicted that future salary increases will be maintained at the current level for the time being.