Hyundai Motor Group did not promote as many employees in 2016 as they did in 2015 following the lagging sales at its flagship unit, Hyundai Motor. The lower number of promotions might be a signal that Hyundai Motor Group is reeling from the impact of the dropping profits at the carmaker.
In 2016, only 358 Hyundai Motor Group employees were promoted, down 5% from the number of employees promoted in 2015, as reported by Reuters. The news comes just as carmaker Hyundai Motor suffered from another profit decline in 2016. The carmaker's profit has been sliding since 2013.
Hyundai Motor Group is not the only family-owned conglomerate that held back on its promotion. Samsung Group, another Korea-based company, also promoted fewer employees in 2016, Business Times reported.
The trend is not surprising given that South Korea is still grappling with a political scandal involving South Korean President Park Geun-hye. The South Korean president is facing an impeachment trial for alleged corruption.
Several executives of South Korean companies have been investigated and questioned over the political scandal, although no one has been charged yet with any wrongdoing. Some of the largest South Korean companies have reportedly been coerced by the country's first female president into coughing out donations to her foundations.
In addition to the political unrest, Hyundai Motor Group also has to deal with "growing business uncertainty." The South Korean conglomerate has responded by reducing costs in certain parts of its operations. The cost reduction has also involved giving its executives lower compensation, which makes sense given that poor performance does not warrant high compensation for the people in charge of running the company.
Although Hyundai Motor Group is working on limiting its expenses, Jobs & Hire previously reported the Korean carmaker will increase its investments in the U.S. by more than 50% than it initially planned.