Even With Salaries Exceeding KRW 100 Million, Young Talent Continues to Depart... Rising Concerns Over Mass Resignations at KDB and Eximbank [Public Financial Institution Relocation] ①

Of 43 first-half resignations, 23 were junior employees
At Korea Development Bank, two out of three resignations were juniors
Lower pay than commercial banks, now facing regional relocation
Break in expertise and know-how undermines policy

Editor's NoteAs the announcement of the second phase of public institution relocation to the provinces is imminent, tension is rising in the financial sector. Concerns over talent outflow, especially among junior employees, have been reignited at state-run banks. While private financial companies are enhancing their competitiveness through bold compensation and investment in top talent, public institutions face a growing sense of crisis over potentially falling behind in the race for talent due to relatively low pay, various regulations, and the added variable of regional relocation. In this context, The Asia Business Daily examines the impact of relocating financial public institutions on the country's financial competitiveness and explores solutions for enhancing the expertise and competitiveness of policy financial institutions.

In the first half of this year, more than half of the employees who left Korea Development Bank and Export-Import Bank of Korea were junior staff with less than five years of service. Even those who passed the so-called “financial public company A-match” are packing up and leaving in less than five years. There are growing concerns that if the comparatively low compensation and rigid reward system found at public financial institutions are compounded by an additional wave of relocation, a “second exodus of talent” could accelerate.

According to the financial sector on August 18, there were 43 voluntary resignations at Korea Development Bank and Export-Import Bank of Korea in the first half of this year, excluding those who left due to retirement age. Of these, 23 employees (53.5%) had less than five years of service. The proportion of junior staff among voluntary resignations rose from 42.3% in 2021, to 43.6% in 2022, and 45.7% in 2023, before declining to 37.7% in 2024. However, it rose again to 40.7% last year, and in the first half of this year, it surpassed the halfway mark.

The outflow of talent at Korea Development Bank is particularly notable. Of the 28 employees who resigned in the first half of this year, 18 (64.3%) had less than five years of service—about two out of every three. At Export-Import Bank of Korea, five out of 15 resignations (33.3%) during the same period were from employees with less than five years of service. Even during the heated discussions surrounding Korea Development Bank’s potential relocation to Busan from 2022 to 2024, 203 out of 236 voluntary resignations involved junior or professional employees in Grades 4, 5, and G3-G5, most of whom were in their 30s or younger.

Experts point out that as the expertise and know-how accumulated over time at state-run banks are directly linked to the competitiveness of policy finance, repeated talent outflow could weaken their capabilities.

The outflow of young talent is not limited to policy banks. The Financial Supervisory Service also saw a surge in resignations by employees with less than five years of service, rising from just 1 in 2020 to 20 in 2024, with 16 last year alone.

The main issue is that incentives to retain top talent are weakening. In 2021, the average annual salary at Korea Development Bank, Export-Import Bank of Korea, and Industrial Bank of Korea was 108.88 million won, higher than the 105.5 million won at the four major commercial banks. However, in 2025, it is expected to fall behind, at 115.93 million won compared to 122.75 million won at commercial banks. Public institutions are restricted by regulations such as the total personnel cost system, making it difficult to operate a flexible salary and reward system like private financial companies, which is another obstacle to attracting and retaining talent.

Meanwhile, renewed discussions about the second phase of public institution relocation are heightening internal tensions at financial public institutions. Junior employees, in particular, are notably opposed to regional relocation. According to a survey conducted by the Korea Deposit Insurance Corporation’s labor union, only 12% of employees with less than five years of service and 13% with five to less than ten years of service responded that they intended to stay at the company if relocated to a provincial area.

A high-ranking official at a state-run bank said, “Finance relies on human capital, information, and accumulated know-how. If talented employees leave, it not only reduces headcount but can also shake the expertise and very foundation of the organization. If lower compensation than the private sector and regional relocation are both realized, it will be extremely difficult to hold on to top talent purely out of a sense of duty to policy finance.”

This content was produced with the assistance of AI translation services.