Companies That Have Delayed Entry-Level Hiring and Training Are Now Pouring Money into Semiconductor Plants
The controversy over large corporations’ retained earnings is often summarized as follows: “Companies are hoarding money instead of investing it.” But this issue should not be understood simply as cash locked away inside corporate vaults. More precisely, we need to examine the fact that companies have long postponed the use of internal capital that should have gone toward hiring, training, and expanding productive capacity, and that this accumulated capital is now belatedly flowing into large-scale facility investment. Retained earnings refer to the portion of corporate profits that remains within the company instead of being distributed as dividends or paid out externally. In accounting terms, they are connected to shareholders’ equity items such as earned surplus and capital surplus. But this does not mean the money exists as cash sitting in a company safe. It may already have been converted into factories, facilities, research and development, inventory, stakes in subsidiaries, or financial products. Nevertheless, it is difficult to deny that large corporations hold substantial cash-like assets. When cash and cash equivalents, short-term financial instruments, short-term deposits, and current financial assets are combined, the liquid funds held by major corporate groups are estimated to amount to hundreds of trillions of won. Narrow estimates place the figure in the 300 trillion to 500 trillion won range, while broader estimates that include cash and short-term financial products suggest a possible range of 500 trillion to 800 trillion won. If total retained earnings are viewed from an accounting perspective, the amount is estimated to far exceed 1,000 trillion won. The real issue is the order in which this money has been used. Corporate internal capital should also be used to cultivate future workers. Hiring new employees, training them, placing them in the field, and developing them into skilled workers may appear as a cost from a company’s point of view, but from the perspective of the broader industrial system, it is the seed of productive capacity. A company is not merely an organization that buys machines. It is an organization that trains people and turns that training into productivity. However, from the late 2010s onward, large corporations became increasingly conservative about entry-level hiring and internal training. As economic uncertainty, automation, outsourcing, preference for experienced workers, and global supply chain restructuring overlapped, the old model of “hire and train” weakened, while the model of “select only workers who can be used immediately when needed” became stronger. Hiring declined, training was reduced, and the corporate culture of investing time in new employees so they could build skills gradually became weaker. COVID-19 accelerated this trend. After 2020, companies further delayed hiring and training, citing pandemic risks and economic shock. In-person training was suspended or reduced, and organizations chose to endure with existing employees rather than absorb new workers. From the company’s perspective, this may have been crisis management. But from the perspective of society as a whole, it delayed an entire generation’s entry into the workplace and the formation of skills. Even after COVID-19 isolation measures were lifted, the situation did not immediately recover. Companies prioritized facilities, supply chains, inventory, automation, and overseas base restructuring under the banner of restoring production capacity. Entry-level hiring and training continued to be pushed aside. In other words, even during the post-pandemic recovery phase, money flowed toward facilities before people. In this context, the so-called “three mega projects” discussed around June 29, 2026, especially the proposed semiconductor plant investment in the Honam region, should not be viewed merely as a regional development issue. It can be seen as a scene in which capital that had been accumulated and retained inside corporations is being released in the form of large-scale facility investment. Retained earnings were not simply sitting as cash in a vault before suddenly emerging, but it is clear that corporate investment capacity and liquidity are being converted into physical assets in the form of semiconductor plants. Semiconductor manufacturing is a representative example of an ultra-large-scale, capital-intensive industry. A single plant, a set of equipment, or one cleanroom line can require trillions or even tens of trillions of won. This is why one explanation for large corporations holding significant cash is that they are keeping “loaded ammunition” ready for the next investment cycle. But this explanation alone is not sufficient. If companies kept their ammunition loaded while reducing entry-level hiring and training for nearly a decade, we must also ask where the money that should have gone into people went. Companies now say they will “build factories.” But factories do not work by themselves. They require engineers to operate semiconductor lines, technicians to manage equipment, researchers to interpret processes, managers to control quality, and working-level professionals to lead the materials, parts, and equipment ecosystem. If companies have not sufficiently hired and trained new employees over the past several years, the new factories may be built, but human expertise will arrive late. Facility investment can be announced quickly, but talent development cannot be compressed into a press release. Therefore, the proposed semiconductor plant investment in Honam can be understood as a form of “releasing” retained earnings. However, it is not being released first through employment and education, but belatedly through facilities and regional projects. This distinction matters. More important than the fact that money is being released is where it flows, in what order, and to whom it flows first. Large corporations have long treated hiring and training as costs and postponed them. But entry-level hiring is not merely welfare or corporate social responsibility. It is a core investment in a company’s future productive capacity. If companies do not hire new employees, short-term costs fall. But five years later, the middle-skilled workforce becomes thin, and ten years later, the generation that should take over field operations and research and development becomes weak. Companies may then say, “There is no talent,” but the talent shortage is not a disaster that fell from the sky. It is the result of past delays in hiring and training. The government and local governments should not promote large-scale projects merely as “trillions of won in investment,” “several new factories,” or “balanced regional development.” The real questions lie elsewhere. Will this investment actually lead to entry-level hiring? Is there a structure for educating local young people and developing them into semiconductor workers? Are universities, vocational education institutions, and corporate training centers moving together? Is the skills ecosystem expanding to partner companies and small and medium-sized enterprises? The core of the retained earnings controversy is not whether companies possess money. It is whether they are directing that money toward a productive future. Factory construction is an important investment. But if companies build only factories and fail to train people, those facilities may become nothing more than massive steel structures planted in a region. By contrast, if facility investment is combined with entry-level hiring, training, partnerships with local universities, and the development of partner companies, retained earnings can finally become reproductive capital for Korean industry. The major semiconductor investment plans of 2026 are therefore two-sided. On one side, they may be seen as a signal that retained capital held by large corporations is finally being released. On the other side, they can also be criticized as too late and too heavily centered on facilities. Considering the gap in entry-level hiring and training that has persisted since the late 2010s, the interruption of workforce development during the COVID-19 period, and the continued sidelining of youth employment even after isolation measures were lifted, factory investment alone is no longer enough. Companies must use retained earnings not only for facilities, but also for people. More difficult than building a single semiconductor plant is training the people who will keep that plant running for the next twenty years. If the Korean economy is to truly restore its productive capacity, the flow of retained earnings must not end with concrete and equipment. It must continue into entry-level hiring, education, skill formation, local talent, and the partner-company ecosystem. Ultimately, retained earnings are neither money to be simply piled up nor money to be thoughtlessly released. They are a directional compass showing where a company is placing its future. If the major semiconductor projects of 2026 are to carry real meaning, they must expand beyond “factory investment” into “talent investment.” If the money that has been postponed is finally moving, its destination should not be machinery, but people. |
