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[17 comments]

Starbucks finds smart way to attract and retain workers

June 17, 2014

If you want another reason why people want to work for Starbucks, look no further than the company's recently announced College Achievement Plan. Billed as a "first-of-its-kind program," the idea is to help thousands of part- and full-time workers at Starbucks to get their degrees without the strings typically attached to most employers' tuition reimbursement plans.

In short, employees working at least 20 hours a week at company-operated Starbucks, Evolution Fresh, La Boulange, Seattle's Best Coffee and Teavana stores may choose from more than 40 undergraduate programs offered through Arizona State University's (ASU) online program.

Starbucks' employees admitted to ASU as a junior or senior will earn full tuition reimbursement for each semester of full-time coursework they complete toward any of the 40 bachelor's degrees offered by the school. Freshmen and sophomores will be eligible for a partial tuition scholarship and need-based financial aid for two years of full-time study (est. at $6,500). Workers will have no commitment to remain with the company past graduation.

"Supporting our partners' ambitions is the very best investment Starbucks can make," said Howard Schultz, chairman, president and CEO of Starbucks, in a statement. "Everyone who works as hard as our partners do should have the opportunity to complete college, while balancing work, school and their personal lives."

[Image: Starbucks College]

According to Starbucks, 70 percent of its employees are either current or aspiring students. Michael Crow, president of ASU, expects upwards of 15,000 employees of the company to enroll in the university's online degree program.

"Starbucks is going where no other major corporation has gone," Jamie Merisotis, president and CEO of the Lumina Foundation, a group focused on enrolling and graduating more students from college, told The Seattle Times. "For many of these Starbucks employees, an online university education is the only reasonable way they're going to get a bachelor's degree."

FINANCIALS:     [NASDAQ:SBUX] [ ]

Discussion Questions:

How will the Starbucks College Achievement Plan affect employee recruitment and retention at the company? Do you think Starbucks' program will serve as a model for other companies or do you see a different approach gaining more corporate converts?

While we value unfettered opinion, we urge you to show respect and courtesy for people or companies about whom you comment. Keep in mind that this is a public, professional business discussion. RetailWire reserves the right to edit or refuse the publication of remarks that we deem unsuitable. We may also correct for unintended spelling and grammatical errors.

Instant Poll:

What grade would you give the Starbucks College Achievement Plan?

Comments:

This is a refreshing idea given the general state of attitudes towards retail staff from big corporations and the war over higher minimum wages. Having never been a barista or employee of the company, I'm not sure why people choose to work there, but this will definitely give a boost to the talent pool the company has to recruit from.

It would be fabulous to see this inspire other large retailers to offer more benefits to lower-level staff and part timers, but it's doubtful that it will provide any real inspiration. Most retailers and quick serve restaurants are focused on cost cutting, often at the expense of hourly workers, so this would be an unlikely giant leap in a new direction for others.

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Ken Lonyai, Digital Innovation Strategist, co-founder, ScreenPlay InterActive

Brilliant step. Right message. right audience. Looks right to their customers. There is no down side.

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Bob Phibbs, President/CEO, The Retail Doctor

Bravo, Starbucks! This program reinforces that Starbucks has a commitment to its employees. It will be a magnet for attracting and retaining talent. Barista jobs don't pay a lot. This offering takes some financial burden off employees, while not costing the company a lot of money. This is a win for Starbucks' employees and the company.

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Max Goldberg, President, Max Goldberg & Associates

This is what I call "win-win-win" situation. Win for Starbucks, win for their employees and win for customers (Happy employees = happy customers). Way to go!

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AmolRatna Srivastav, Asst. General Manager, Analytics and Insights, Tata Consultancy Services

Excellent move by Starbucks. They are putting their money into not only their own future, but into the future of the youth of our nation. These people can become great leaders, but it possibly would not happen without the Starbucks jump-start.

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Ed Rosenbaum, CEO, The Customer Service Rainmaker, Rainmaker Solutions

Starbucks makes another great move. To sum it up; when you offer benefits like this, you don't have to be satisfied with just getting the employees you need—you get to build a team made up of the employees you want.

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Mel Kleiman, President, Humetrics

We all know there is no free lunch. Of course workers have no commitment to remain with the company after graduation. Starbucks will not be obligated to keep the students employed, either. I'm guessing continuing employment while attending school would be mandatory and only the "keepers" would benefit.

This could work out well for employees Starbucks wants to keep around and I'm sure they would have no problem forking out some extra cash to low-wage employees who put out an exceptional effort. This is a clever idea of how to attract quality employees for a low wage.

Starbucks is most likely getting a quantity discount on tuition as well. I don't see this as a charity give-a-way, but as a clever way to attract better-than-average workers. I can certainly see other companies who require a better class of employee trying something similar, and perhaps doing it one better.

David Livingston, Principal, DJL Research

What Starbucks has done is found an approach that will work for their associates. There will be a likelihood of success, or they wouldn't be doing it. However, keep in mind, this meets their associate base of 70 percent or greater being current or aspiring college students. This is their base. It may not be right or a good fit for an associate base for other companies. Taking a "me too" approach isn't always the best approach.

My guess is that they spent a considerable amount of time developing this approach and have done the research within their organization to project its outcome. Nevertheless, having a program doesn't mean it is a guaranteed success. The retailer will have to have all else that goes with it. That is; flexible scheduling, days off, moral support, promotion and encouragement. There is more to it than just a policy in a handbook.

Starbucks, to their credit, already has all the other elements. That is why they have the associate base makeup that they do.

'Scanner'

Who but Howard Schultz, who transferred the coffee commodity of yesterday into the most fashionable beverage of this age, would initiate the Starbucks College Achievement Plan in today's economy? NOBODY!

Now Howard has created a new and better model for recruitment and retention. Expect the corporate sheep to follow Starbucks. That will be quite beneficial, but expect some price increases from competitors' efforts.

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Gene Hoffman, President/CEO, Corporate Strategies International

Not only will this help Starbucks attract a higher-level employee, but it will continue to boost Starbucks' image in society as well. While I don't know the going pay for a barista, adding this type of perk, along with some kind of healthcare, is a great strategy for retaining loyal employees, upholding an image and creating loyal patrons. That's my two cents.

Lee Kent, Encourages retailers to meet share and learn, YourRetailAuthority

Kudos! Let's hope this starts a trend with other retailers. Some have questioned the value of such programs to companies because of the "risk" of losing their employees to bigger and better things once they have taken advantage of an education or self-improvement plan. I think what gets missed is that in addition to benefiting from "internally-grown" management candidates, there is the benefit of attracting job candidates who are wired with a passion for learning and improving. The time that Starbucks does have with these types of employees is probably a win in and of itself.

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Matt Schmitt, President, Chief Strategy & Innovation Officer, Reflect

Excellent idea. But you know, there's an expression in retail that goes like this; no margin, no mission. Kudos to Starbucks for making this happen—very admirable, but for many retailers without the luxury of monster margin, it's a pipe dream. Carry the torch!

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Lee Peterson, EVP Creative Services, WD Partners

Both of my kids have worked for Starbucks and loved it. This new program ensures that SBUX will continue to enjoy an educated and motivated workforce. Genius.

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Cathy Hotka, Principal, Cathy Hotka & Associates

This program will give prospective Starbucks employees another reason to join the company and it will definitely help the coffee chain to retain the best staff.

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Larry Negrich, Vice President, Marketing, nGage Labs

Investing in your employees sends a great message out to prospective employees and is a huge boost for the brand.

Alan Cooper, Contract Trainer/Training Consultant, Independent/Freelance

Is it serendipity or Karma that Starbucks is promoting free education the same week that 'non-competes' have become a hot topic?

I just wish Starbucks could train their cashiers to keep their fingers out of my cup and off the lid when they write down my order.

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Christopher P. Ramey, President, Affluent Insights

This is a brilliant idea at so many levels. First of all, it is an excellent perk for their employees, as so many of them are students. Second, it is fabulous as a retention and recruiting tool, as more people will want to work at Starbucks. Third, it obviously has incredible PR and social benefits with prospective customers and especially all of the extended families of the employees in question. The president of Arizona State expects around 15,000 Starbucks employees to take advantage of this opportunity, but this campaign will spread to every friend, family member, student and job seeker on a global scale. Mass-marketing heaven.

Unfortunately, I doubt that many other companies will follow suit because it really is a case of the strong getting stronger. Many other companies are simply focused on survival and cost cutting, and are simply not in a position to implement such a program.

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Alexander Rink, CEO, 360pi

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