More local banks are implementing so-called optional "parental resignation" programs as internal welfare measures, as one attempt to address the nation's notoriously low birth rate problem.
According to industry sources, Woori Bank recently received applications for parental resignations with the guarantee of re-employment. A total of 35 employees applied, and they are scheduled to resign at the end of this month to begin a maximum two and a half years of unpaid child care leave.
Woori Bank is the second local commercial bank to adopt this system, following KB Kookmin Bank, which initiated the measure earlier this year and saw 45 employees resign for child care reasons through the system.
For both banks, full-time regular employees who have worked for more than three years and have children aged seven or younger (13 or younger in the case of children with disabilities) are eligible to apply. KB Kookmin Bank offers up to three years of unpaid child care leave following parental resignation, while Woori Bank currently offers up to two and a half years of unpaid leave, with plans to eventually extend the period to three years.
The parental resignation system can be used in addition to an existing two years of child care leave, extending the total period of parental hiatus to a maximum of five years.
Notably, employees will be re-employed without any disadvantages as long as they express their desire to return. They will be reinstated without a separate hiring process, with their rank, salary and career history prior to resignation recognized.
Led by the financial sector, this optional parental resignation system is garnering attention as one attempt to alleviate the country's low birth rate issue by enabling a better balance between work and family life that avoids a permanent career interruption.
During a parliamentary discussion on tackling Korea's continually falling birth rate in December, KB Financial Group Vice President Kim Jae-kwan explained that the parental resignations are designed to "enable employees to dedicate three years to child care before their children enter elementary school."
"By offering re-employment at the same rank as before resignation, we aim to mitigate concerns regarding career interruptions and provide employees with continuous opportunities for professional development," he added.
An official from KB Kookmin Bank highlighted the positive reception of the new policy among employees. Men in particular face continued challenges in utilizing parental leave without risking career setbacks, according to him.
"More male employees are showing interest in increasing their role in child care. Maintaining career stability even after a five-year break for child care is a significant advantage," the official remarked.
Despite these positive expectations, some experts question the policy's effectiveness in actually ameliorating the low birth rate.
"The success of this system depends on creating a supportive work environment for employees upon their return to the office," said Jung Jae-hoon, a social welfare professor at Seoul Women's University.
"It's not just about granting the job back. It's important to address the evolving needs of employees seeking recognition both as parents and professionals. For this, companies need to ensure not only the same rank and salary but also the employees' productivity and integration into the organization," Jung, who has advocated for a balanced work-family life to combat the low birth rate, added.
Jung further called for a more flexible working environment where parents can continue working while caring for children. "Ideally, parental leave should be as short as possible, with extended flexible working arrangements," he said.
South Korea has been battling the world's lowest fertility rate for years. Last year, the country recorded its lowest-ever total fertility rate of 0.72, down from 0.78 in 2022. The government anticipates this rate to drop further to 0.68 this year and to 0.59 by 2026.
