The South Korean government plans to introduce a job sharing scheme in the public sector in a bid to ease the tightening labor market amid the sharply slowing economy, the Finance Ministry said on Friday.

The ministry said the government is also considering to cut salaries for newly-recruited workers in the public firms and to use the reduced expenses along with tax incentives to encourage the private sector to join the efforts.

The move comes after President Lee Myung-bak's suggestion last week that the government should encourage salary cuts and create more jobs.

The South Korean economy lost 12,000 jobs last month from a year ago, marking the first contraction since October 2003, raising the nation's jobless rate to 3.3 percent, according to the National Statistical Office.