Coke adds more fizz in China with smog incentives

The Coca-Cola Co is providing its employees in China with a smog-related bonus, revealing the challenges it is having in recruiting staff because of air pollution in major cities.

According to The Times of India, Coca-Cola is offering its workers in China a hefty “environmental hardship allowance” as part of its efforts to attract and retain talent.

The wage premium that was recently introduced is believed to be as high as 15 percent of an employee’s base salary. It is being described as a “mobility package” to attract quality personnel from other countries, according to the paper.

In a reply to China Daily, the beverage giant’s China office didn’t deny the report nor give any further explanation. It was not made clear whether the bonus would be offered only to the company’s foreign employees in China.

“Operating in more than 200 countries, we offer competitive benefits to all of our associates around the world, and for proprietary reasons we cannot share further details,” Coca-Cola said.

It is the second major foreign company to offer environmental allowance after Panasonic Corp announced one in March.

Although Panasonic is not the first to subsidize expats living in smog-affected cities, it is the first to acknowledge that the allowance is specifically related to pollution, according to Max Price, partner of Antal AG (Beijing) Human Resources Services Co Ltd, a recruitment specialist based in the United Kingdom.

More foreign companies are expected to offer compensation for pollution because it is regarded as the biggest human resources challenge in China.

A newly appointed country director of a foreign film studio, which recently set up an office in Beijing, said hiring talent to work in Beijing is a big problem because executive professionals are not willing to bring their families to smog-affected cities to live.

Jonathan Edwards, managing partner of Antal, said that 15 years ago, companies had to “bribe” foreigners to work in China with double pay and big perks.

In recent years, as China became an attractive destination for expats, and the economies of Europe and the United States suffered in the global recession, such incentives became less necessary. But as the global economy improves and the pollution problem continues to worsen in China, they may be needed again, Edwards said.