Korean SMEs turning to offshore software engineers amid talent shortage

SEOUL, SOUTH KOREA — A new survey shows that over half of South Korea’s small and medium-sized enterprises (SMEs) are looking to hire software developers overseas. The move comes amid a local talent shortage, pushing businesses to explore offshore alternatives.

On Sunday, the Ministry of SMEs and Startups revealed that 75.4% of the 187 companies surveyed between June 13 and 23 found it hard to hire and retain software engineers domestically. 

A talent deficiency, accounting for 74.3% of the challenges, and a significant pay disparity with large firms were identified as the main causes of this shortage.

Interestingly, the survey noted that 27.3% of respondents have already integrated foreign engineers into their workforce. An even larger group, 54.5%, stated plans to recruit offshore.

Korean SMEs preferred engineers from India, Vietnam, China, and Indonesia when considering offshore hires. These engineers, representing 36.4%, 31%, 11.8%, and 10.2% of the preferences, are often compensated at lower rates than their Korean counterparts.

In response to the identified talent shortage, the Ministry has outlined plans to cultivate 100,000 software talent domestically by 2027. This initiative, combined with an active role in connecting SMEs with local and overseas resources, aims to counteract the recruitment challenges Korean SMEs face.