Starbucks Introduces Health Benefits for Parents of Employees in China

Starbucks Introduces Health Benefits for Parents of Employees in China

In countries with aging populations, many working-age people are saddled with the burden of caring for elderly parents or other relatives, putting pressure on their employers to help ease that burden. While organizations are becoming more aware of how elder care responsibilities affect their employees and are looking at new ways to help employees cope, Starbucks is breaking new ground in this area with a generous new benefit for its employees in China: health insurance for their parents. Bloomberg reports:

The new policy is a response to traditional values in China, the company said, as children often care for their parents and grandparents in a society that doesn’t have a comprehensive safety net for the elderly. The plan, covering 30 critical illnesses and some surgeries, will be available starting in June, Executive Chairman Howard Schultz said.

“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,” Schultz said in an interview in Beijing. “I heard firsthand very emotionally driven, tragic stories about what’s taking place with the parents who got sick, and many passed away.”

The program addresses a critical need for an aging population that’s contending with increasing rates of major diseases from cancer to heart ailments. It’s also a strategic move to retain employees, many of them recent college graduates in low-skill jobs, and create goodwill toward the company at a time of increasing political tensions between the U.S and China.

The new policy covers Chinese seniors’ most common health conditions and supplements China’s state-run insurance programs, which provide near-universal basic health coverage but don’t cover many major medical expenses. Private insurers fill the gap. Starbucks’ new benefit will be available to parents who live in mainland China and are under the age of 75, and whose adult children have been employed at Starbucks for at least two years. The company, which employs around 40,000 people in China, designed the offering after finding in employee surveys that 70 percent of these employees were worried about their parents’ health, and expects 10,000 parents to take advantage of the offering.

The most obvious rationale behind the presumably expensive new benefit is to attract high-quality talent and encourage employees to stay with the company long-term, but there may be more to it than that, one China expert tells Bloomberg:

“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.”

While such a benefit might not be applicable in countries where senior citizens receive more robust public health benefits, China is by no means the only country where workers have to worry about elder care responsibilities. A recent Pew survey found that one in four Americans had already taken time off from work to care for a sick or elderly family member, while another quarter expect to do so in the future. In response to this reality, major employers including Deloitte and Facebook recently revamped their family leave policies to add paid leave for caregivers. Employers in the UK are also being urged to add this benefit to their rewards packages. While this may look like an unaffordable benefit for some employers, studies suggest that it could help mitigate the significant productivity losses that arise from employees attempting to balance full-time work and caregiving obligations.