How small IT firms are keeping talent: lessons in fair pay and flexible work

As competition for talent in the IT sector intensifies amid the spread of AI and digital transformation, small and medium-sized enterprises have shared how they cut employee turnover by revamping performance evaluation and compensation systems and introducing flexible work arrangements.

The Korea Labor Foundation held its third workplace innovation case-sharing forum of 2026 on Wednesday at the Seongnam Chamber of Commerce in Gyeonggi Province. The forum focused on workplace innovation at growing small and medium-sized IT companies.

C&P Consulting, a firm that carries out workplace innovation partnership consulting, participated in the event. It presented cases on talent acquisition, organizational stabilization and the building of fair performance and compensation systems at small IT companies, followed by expert discussion.

The first case featured TNH, a healthcare IT company that faced the challenge of securing and retaining key personnel, including developers, as its business expanded. TNH established annual salary negotiation standards and a pay structure by job grade, and systematized criteria for salary increases based on performance reviews. It also introduced a performance evaluation framework reflecting the competencies of different job categories — development, sales and customer support — along with leadership assessments, improving the system to account for both job expertise and growth potential.

As a result, employee trust in the evaluation system rose, and the company's sales grew 13.2 percent last year, from 8.127 billion won ($5.28 million) to 9.2 billion won. The turnover rate in the first quarter of this year also declined.

Dexist, a manufacturer of industrial IoT measuring instruments, built a performance management framework and working-hours system tailored to the characteristics of each job function. The company established job profiles and a key performance indicator framework to restructure its management-by-objectives-based evaluation system. It also introduced flexible working hours and staggered commute schedules for research and development and production staff.

Following the consulting, Dexist's employee satisfaction with performance evaluations rose 13.6 percent from the previous year, and the resignation rate among junior-level staff fell by roughly half.

"In an environment where AI and digital transformation are accelerating and competition for talent is intensifying, fair evaluation and a flexible work environment are key factors that determine a company's competitiveness," Korea Labor Foundation Secretary-General Park Jong-pil said. "We will continue to support the spread of workplace innovation cases proven on the ground to more companies."