Korean Job Discussion Forums

[Glorf]

Anybody know how bad the situation is? I just left one that was on the verge of closing, and an English guy in that town said his ( and most in that town ) is on the verge of closing because of the economy. I know that hagwons have always opened and closed on a pretty regular basis, but I've been hearing that lately it's gotten much worse.

It seems strange to me that noone's mentioned it around here yet, but it seems like the places I'm interviewing at aren't doing too well. The other day my K girlfriend said that for the past month or two Gangnam is seeing two hagwons close on an average day. I know they always open and close on a pretty regular basis ( and I'm not surprised with the way they're run), but it seems unusual that even Gangnam would see that kinda trouble. Anybody know if things are getting this much worse this fast ( we all knew it was only a matter of time until things fell through anyway ), or are Koreans once again just whining too much?

[bellum99]

There is a limit on the number of students, but no limit on the number of schools. Eventually, the system falls apart. I have been seeing a lot of schools surviving on fewer and fewer students. Koreans are stupid business people...they will flood a market that makes even a little money until eventually no one makes money.

[Demophobe]

I think it's a kind of saturation thing. The good ones survive (well-funded, chains, branches, etc...) and the smaller, recent upstarts are finding it tough. It's funny that it seems to come in waves.

The IMF period put a cap on it for a long while, but slowly they began popping up everywhere. I think the economy along with the programs the Korean board of education has been slowly working in (ie; EPIK/GEPIK) will be cause of another cull.

One thing I must throw in here is that in the Korean economy, there never seems to be a limit on how much demand there is. At least, this is true for the Korean venture-minded types. They see 6 hakwons doing reasonably, so they add another 4 to the mix, causing a meltdown. It's pretty much cyclical.

[ontheway]

Koreans are followers. They are taught culturally not to stick their necks out or take risks. This was a good way to survive in a land of kings where those who were different were apt to be persecuted. So, in business, and consumption as well, they are followers. One 24-hour convenience shop is followed by 50, one handphone shop is followed by 100, and so when hogwans seem to be doing well, everyone thinks they can do it.

It's not the biggest that will survive, however. It's those that can keep their costs in line with their revenues. In the city where I live, several big schools and chain schools have closed. It's the smaller, better schools that are thriving. It still takes good management.

The Korean economy is doing fine. There is always a lot of whining here. They expect double digit economic growth, and when things are growing slowly, like now, the Koreans complain. Also, if anything, the number of students is still growing. Adding foreign teachers to the public schools has not helped the kids learn English. The classes are too big and the hours too few. It just shows the parents, once again, that the kids need a good private hogwan if they're ever going to learn English.

[mindmetoo]

Look at any street in Korea. Every corner there's a bakery franchise, a pc bang, a norae bang, a wang mandoo place, a sushi place. A month later, there are no wang mandoo places within 10 miles. There's only one bakery left. All the store fronts that were mandoo and bakeries are now bool dak places or pet clothing stores...

The truly amazing thing is how few empty storefronts I see on my travels. There always seems to be someone ready to gamble his family's life savings...

The hagwon industry is similar. Someone sees a school ostensibly making money hand over fist... pile on! I saw one school called "Me too English". That's an excellent name that describes both the hagwon industry and the Korean approach to small business. "Yeah, me too!"

[Yu_Bum_suk]

I think the increasing number of foreigners in the public school system, especially after-hours programmes at elementary schools, will make a noticeable but not fatal dent. Hopefully parents who want more than just babysitting will also clue in that years of sending their kids to Wonderlands and Ding Ding Dangs and the like is mostly wasted money. It's also much more difficult for hogwans to hire foreigners from in-country, and this trend will only grow. This leaves them taking a bigger risk with new employees, one which they sometimes lose, and this ends up hurting them. Hopefully more of the day-care centres masquarading as academies will disappear.

[joe_doufu]

Mine is failing because of inexperienced management and no business plan, not because of economic reasons. They're the only hagwon in their area to have a "license" to employ a foreigner, however that works, so economically they have a barrier to competition and should be thriving.

[BigBlackEquus]

It's all about working within your means. The schools that grow from a few students, have little overhead, and don't overextend themselves are the ones that make money. If they grow too fast, then lose students, they may be forced to close in a heartbeat.

[bellum99]

I love it when they open a gigantic, beautiful new school only to close or sell it within a year. Koreans...if you have more money then you open a bigger business. They know nothing about a growing business.
--I love to hear "We are the biggest school in ....". That often means the most expensive and has the least amount of operating capital. I saw one school change owners like 5 times in a year because the costs where just too high.

[Homer]