The Seattle coffee giant says it will help subsidize housing for many of its staffers in China, adding a new twist to the Chinese practice of providing dorms for migrating workers.
Starbucks says it will spend millions to subsidize housing for thousands of its workers in China.
The move is the latest in a series of benefits that Starbucks has been extending to big swaths of its workforce in different markets — from subsidized college tuition and pay raises in the United States, to loans for rent deposits in the United Kingdom.
Chinese industrial companies often build huge dormitory complexes for employees moving from the countryside to work in their factories.
That practice “has been expected in China, especially for non-married workers,” though not in high-paying gigs such as tech and consulting, says Kristi Heim, president of the Washington State China Relations Council.
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Starbucks’ plan adapts that custom to the retail sector, which is gaining in importance as China transitions from being the world’s factory to a major consumer economy.
The housing program is limited to full-time staffers. About 7,000 of Starbucks’ total workforce of 30,000 in China will qualify immediately, with an additional 3,000 eligible in the near future. They don’t have to be migrants to have access to the benefit, which is geared to baristas and shift supervisors.
The company wouldn’t disclose how much it may spend per employee, saying that will vary from city to city and from “situation to situation.” For some employees it could provide “well more” than half of the cost of housing, the company says.
Unlike the manufacturers that provide centralized dorms, Starbucks will give employees an allowance to help them pay for the housing of their choice.
The company also declined to provide an estimate of the program’s total cost, only saying it will be a “multimillion-dollar” investment.
“We listened very carefully to what the needs of the partners are, and one of the things they talked about was housing,” said John Culver, who leads Starbucks operations in China and the Asia Pacific region.
“You have a lot of people migrating into bigger cities, and the cost of living and rent in those cities is higher,” Culver said. “We want to make sure we’re giving them the opportunity so that they can afford to live there.”
The housing subsidy is being announced in Chendgu, a massive city about 1,200 miles west of Shanghai, where on Tuesday top Starbucks brass, including CEO Howard Schultz, were scheduled to meet with 1,300 people, including employees and their families.
It’s the fourth so-called Partner Family Forum, in which Starbucks executives pitch the benefits of working for the company not only to employees, but also their families, which play a big role in career choices in China.
Starbucks is also announcing other new perks, such as a sabbatical program for employees with a tenure of at least 10 years, dubbed “coffee break.” A similar perk exists in the United States.
China represents big bucks for Starbucks. The company has 2,000 stores there, and it plans to have 3,400 by 2019. It’s already Starbucks’ second-largest market after the United States. The company has stores in 100 cities, including 75 stores in Chengdu.
China’s economy has seen a lot of volatility in recent months as its momentum has slowed, but Culver says the uncertainty hasn’t changed the company’s ambitious plans for China.
“We feel we’re in a very strong position to weather any fluctuations in the market,” he said.