(C) Seeking Alpha

SEOUL — South Korea is facing an intensifying "AI talent drought," as domestic corporations, despite a strong intention to hire more AI professionals, fail to offer compensation packages competitive with leading industrialized nations. A stark disparity in salary premiums for AI specialists is driving a significant portion of Korea's top talent overseas, raising concerns about the nation’s future competitiveness in the global artificial intelligence race.

According to a recent report from the Bank of Korea (BOK) titled The Status and Supply-Demand Imbalance of AI Specialized Manpower, a large majority of Korean firms are actively seeking to bolster their AI capabilities. Specifically, 69.0% of large corporations, 68.7% of mid-sized companies, and 56.2% of small and medium-sized enterprises (SMEs) indicated plans to increase their AI workforce in the future. This consensus underscores the perceived urgency across the entire corporate sector to integrate AI technology.

However, the report highlights that this hiring push is being undermined by conservative compensation strategies. Large Korean corporations, which represent the country's most prominent employers, pay their AI talent an average annual salary of 90.06 million won. Crucially, this figure offers only a 6.2% wage premium over the average salary for all employees within the same companies (84.79 million won).

This modest premium pales in comparison to the international standard, particularly in the United States, where AI professionals command an estimated 25% salary premium. The substantial gap in compensation means that South Korean firms are largely unable to utilize salary as a powerful incentive to attract or retain top-tier domestic and international AI experts.

The BOK report attributes the root cause of this insufficient compensation to the pervasive seniority-based performance evaluation system dominant in Korean corporate culture. Unlike performance-driven systems that allow for high, market-based salaries to recruit skilled AI experts, the Korean model often pegs compensation primarily to years of service. Furthermore, the analysis points to the relatively lower level of domestic investment and demand for AI compared to other major countries as a contributing factor limiting the overall wage ceiling for this critical talent pool.

The consequences of this inadequate reward structure are already evident in the accelerating brain drain. Currently, 16% of all Korean AI professionals (approximately 11,000 individuals) are employed outside of Korea. The United States, with its highly competitive and lucrative tech market, is the primary beneficiary, hosting 6,300 Korean AI personnel as of last year.

The Bank of Korea sternly advises that both government and corporate talent strategies must be refocused to prioritize the prevention of further brain drain. The stakes were underscored by SK Group Chairman and Korea Chamber of Commerce and Industry (KCCI) President Chey Tae-won at a joint KCCI-BOK seminar, who emphasized that Korea has "very little time left" in the global AI competition and stressed that securing growth engines through the AI industry is the most paramount national task.