"It is becoming more of a factor as time progresses. Polluted air is a major issue for foreign professionals, especially those looking to move to China with families," he said.

The pollution issue used to be offset by significantly higher salaries, but with the cost of living rising in expat areas, the salary benefit is not as attractive, Price noted.

Della Peng, human resources director for ManpowerGroup China, a workforce solution provider, said she is aware of the issues surrounding smog.

"Some enterprises could find it hard to recruit foreign employees if the air situation is not improved," said Peng.

Several managers have been transferred out from China due to the problem, she said.

But she said that, overall, the allure of working in China - one of the most crucial markets for international companies - still outweighs environmental issues, which are likely to be improved in the future.

In addition, she said, employers are making efforts to balance the costs and opportunities. For example, despite the concerns over smog, the number of inbound visitors last year has increased, she said.

Measures taken by foreign-invested companies to lure more expatriates include subsidies to those assigned to smog-affected regions or implementation of flexible working hours, she said. Many companies have moved expatriate professionals to less-polluted cities.

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