In China, Starbucks already invites workers' parents to an annual employee meeting. Now it's planning to offer those parents health insurance.
The new perk comes at a time when success in China, which Starbucks has called its “second home market” and has more than 2,600 stores, has become increasingly important to the Seattle-based company. U.S. sales have missed analyst expectations the past five quarters, but at its recent shareholder meeting, the company promoted its growth in China, where it is opening more than one store a day and has seen more than 1 million transactions in less than two months on its "social gifting platform," a way for customers to instantly give Starbucks gift cards to friends and family.
The parental health perk is also a strategic move that could help retain employees and foster goodwill at a time when U.S.-Chinese political tensions are high, Bloomberg reported. A Starbucks spokeswoman said retention is a "key outcome" of offering "locally relevant" benefits like this one. "Starbucks success in China is directly attributed to the passion and dedication of our partners as well as the unwavering support from their family," said Belinda Wong, who leads the company's China business.
The idea for the Starbucks China Parent Care Program, as the new benefit is called, grew out of a fund Starbucks operates in four major markets, including China, that provides financial assistance to employees and their families in times of need. By examining requests from the fund and via employee discussions, the company found that more than 70 percent of workers in the country are concerned about their elder parents' health and their ability to assist them financially.
Employees who've worked full time at company-operated Starbucks stores (there are also franchise locations) for at least two years — and whose parents are under age 75 and reside on the Chinese mainland — will be eligible for the benefit. It is intended to complement the country's government-run health insurance, which provides basic coverage.
In China, Starbucks has a history of integrating employees' parents into its business more than is typical in U.S. workplaces. In 2011, the company began inviting workers' parents to its annual employee meetings to help share the company's values and ethos in a country where service-sector jobs have little prestige. Executive chairman Howard Schultz has attended every meeting so far.
Schultz has called hosting those events a “turning point” in its success in China that helped demonstrate why even college graduates in the country might consider a career at the coffee giant. As he told The Post's Lillian Cunningham in 2014, “these meetings produce an unbelievable level of emotion around the relationship the parents and children now have with Starbucks.”
“There isn't one rule for how to build a company or how to lead an organization,” he said. “Many times you have to customize your leadership style for what it is you’re trying to do and make it as relevant as possible to the people you’re trying to lead and manage.”
Read also:
Like On Leadership? Follow us on Facebook and Twitter, and subscribe to our podcast on iTunes.