Starbucks is one of the U.S. companies benefiting from China's new economy, with sales in the country reaching 6 percent last year. (Photo : Getty Images)
Starbucks Corp. has extended its employee health coverage in China to include workers' parents in the benefits program, making such move the first of its kind for the coffeehouse giant.
Starbucks's expanded insurance plan is set to benefit more than 10,000 people, Bloomberg reported. It will cover 30 critical illnesses and surgeries and will take effect in June.
"This is the first time we've done anything like this, and the reason for that is that it was clear there was an emotionally driven concern among partners about their ability to take care of their parents," executive chairman Howard Schultz told Bloomberg. "I heard firsthand very emotionally driven, tragic stories about what's taking place with the parents who got sick, and many passed away. "
Despite about 95 percent of China's population being covered by public insurance, many still face hefty hospital bills for treatments that are not included in the existing Chinese employee insurance plans. This is especially highlighted as China confronts its aging population where critical illnesses are prevalent.
This is not the first time that Starbucks is tailor-making its workers' benefits program to suit China's labor market. Among Starbucks's employee perks are a full tuition for an online degree from the Arizona State University and one pound of free coffee per week, Bloomberg reported.
With its upgraded benefits, the American coffeehouse giant is not only attracting local employees but also warming its image in China. Displaying a "pro-Chinese" image is a boon for Starbucks amid a growing tension between China and the U.S.
"This insurance move is about recruiting and retaining talent but also about creating an image of Starbucks that is pro-China, pro-Chinese," said Shaun Rein, managing director of the China Market Research Group in Shanghai. "If there are bilateral tensions and Starbucks doesn't have good public relations and a good image in China, they become a target for protests."
To qualify for the program, workers' parents must be below 75 and be a resident of mainland China.