• Home
  • Are Silicon Valley Companies Going to Reintroduce Hardship Allowances in China?
  • Home
  • Are Silicon Valley Companies Going to Reintroduce Hardship Allowances in China?

Are Silicon Valley Companies Going to Reintroduce Hardship Allowances in China?

29 Jul 2014 11:16 AM | Anonymous member


AFR correspondents

American beverage giant Coca-Cola is offering a hefty “environmental hardship allowance” to its ­China-based expatriate employees, as foreign companies struggle to attract and retain staff with many people scared off by chronic pollution.

The allowance, which was introduced “recently”, is believed to be 15 per cent on top of an employee’s base ­salary. A company spokeswoman ­confirmed the introduction of a wage premium to The Australian Financial Review, but declined to comment on the amount.

“Our competitive mobility package includes an environmental allowance for postings to China,” she said in an emailed statement. Coca-Cola said it was introduced “recently” but would not disclose how many employees stood to benefit from the extra pay.

China’s hazardous air pollution, with just three out of 74 cities last year meeting minimum government standards, has become the key issue for foreign companies looking to post workers to cities such as Beijing or Shanghai. Many companies offer better medical insurance benefits, more paid trips home and subsidies for air filters to the roughly half a million foreigners working in China.

Australian architectural firm ­Hassell provides its staff in China with face masks to travel to and from work. It also changes its air filters every week during periods of heavy pollution.

“In Australia, you might do that every year,” said Peter Duncan, ­Hassell’s managing director for Asia, who is based in Shanghai.

Japanese electronics firm Panasonic started in April paying its expatriate staff in China “hazard pay” to compensate them for the dangerous air quality. At the time it was believed to be the first major global corporation to do so.

Three decades of double-digit growth and lax regulation has taken its toll on China’s environment. According to environment ministry statistics only three cities out of 74 met government standards for pollution last year.

In Beijing, more than half of the days in May failed to meet government standards for air quality, while Shanghai fared slightly better with 58 per cent of days in the commercial capital ­considered satisfactory.

The World Health Organisation said earlier this year that air pollution was responsible for the deaths of 3.7 million people under the age of 60 across the globe in 2012.

Ma Jun, director of the Institute of Public and Environmental Affairs said “companies need to do more than just pay special allowances. They are part of the problem so they need to be part of the solution and put pressure on their supply chain to improve.” Mr Ma added that Coca-Cola was one of the ­companies working with his ­organisation on their green supply chain program.

Peter Arkell, managing director Asia for recruitment firm Swann ­Global, said the Coca-Cola allowance showed the company was having ­trouble retaining and attracting staff to China. “I hear more and more stories about executives not extending their contracts because they don’t think China is a good place to bring up a ­family,” he said. “It [the environmental payment] is a way of addressing the air pollution issue but it does look like a pretty generous payment to me.”

Mr Arkell said the new allowance went against the broader trend of cutting back on expatriate packages by reducing the value of benefits like school fees and housing.

“It can be difficult to get people to come to China so that’s why this new benefit has arisen.”

The Australian Financial Review

BAMM 2017 Scholarship

BAMM is offering a scholarship program for Bay Area high school seniors that were relocated between 9th and 12th grade. The scholarship application period is from October 1 through February 24. Mark your calendar – Registration information will be here when it reopens. Winners will be announced in Spring 2017.

Join BAMM’s Mentorship 2.0 Program

BAMM supports our members. As a premier forum for mobility professionals, we invite you to invest in your personal career development while raising the collective knowledge of our peers, our organization, and our friends.

Join Our Program  

Copyright © 2018 Bay Area Mobility Management

Development by DotCreativity | Powered by Wild Apricot