Starbucks employees working an average of 20 hours per week now have faster access to paid vacation, raises, financial well-being and skills-building benefits, thanks to the company’s decision over the past year to invest over $1 billion in the employee and store experience.
“Investing in our partners is what drives our success,” Sara Trilling, executive vice president and president of Starbucks North America, said in a company press release. “It’s what makes us all partners. And an important way we do this is by investing in our partners’ journey, to bridge to a better future at Starbucks and beyond. This entails engaging with and listening to their ideas and feedback while continuing to raise the bar by offering competitive pay and the best benefits package in the industry.”
The investments are driving a positive shift in hourly turnover rates, which are now below pre-pandemic levels, Trilling said. In addition, the chain has invested over 20% of profits from the fiscal year 2023 into the employee experience through wage increases, training and equipment. Each has led to a more consistent partner experience in company-operated stores across the U.S. Coupled with higher wages and the expansion of hours, the investments have not only resulted in lower turnover and more meaningful improvement in customer connection scores year-over-year but have also increased hourly total cash compensation by nearly 50% since Fiscal Year 2020.
Highlights of partner investments include:
- Vacation accrual: Starting this February, hourly partners will accrue paid vacation time sooner, beginning just 90 days after hire.
- Competitive pay: Starbucks moved the wage floor for all U.S. retail hourly partners to $15 per hour in 2022 and has continued to add incremental increases while recognizing and rewarding tenure. Starting with competitive pay — Starbucks provides U.S. hourly retail partners an average wage of nearly $17.50 per hour, a barista wage range between $15 and $24 per hour and a total compensation, with benefits, of nearly $27 per hour. Effective Jan. 1, eligible U.S. retail hourly partners will see an incremental pay increase come to life, with at least a 3% increase and differentiated pay for eligible tenured partners. Eligible partners with two to five years of service will get at least 4% and those with five or more years of service will get at least 5%.
- Career mobility: The company is exploring credential and certification programs to build on the industry-leading Starbucks College Achievement Plan. Over 23,000 employees are earning bachelor’s degree through Starbucks College Achievement Plan, a partnership with Arizona State University’s top-ranked online degree program. Tuition and fees are covered upfront for partners, and over 10,000 employees have graduated and 20% of partners enrolled in SCAP are first-generation college students. Starbucks is committed to helping at least 25,000 partners graduate by 2025, with an expected investment of approximately $250 million or more by 2025.
- Financial wellness: Financial wellness benefits at Starbucks are grounded with equity ownership in the company through annual Bean Stock grants, which have awarded more than $2 billion in additional earnings to partners. Starting this January, employees may sign up to receive the Siren Card, a premium card offering a high-tech banking experience designed exclusively for Starbucks Partners. Built with cred.ai and Visa USA, the Siren Card comes packed with exclusive tech features the world’s first “automatic credit score optimizer,” 24/7 and the guarantee to never pay account fees or interest, all supporting financial wellness with zero effort.
- Partner-centric scheduling: The company creates work schedules that balance employee availability with staffing needs of individual stores. To achieve this, Starbucks collects a range of preferred, minimum, and maximum hours to build a complete picture of partner preferences and assist store managers in scheduling and managing their workforce. This improved scheduling protocol will enable partners to contribute to the personalization of their ideal schedules.
“I look at the whole process and I’m just blown away,” Vic Ruiz, store manager from Ladera Ranch, California, said in the release about his adoption experience. “Starbucks made it a lot easier and has those benefits to support anybody to live the dream of becoming a parent. It didn’t cover the entire adoption and we didn’t expect that. But it does give you peace of mind. It does ease it a little bit that some of those costs are covered. It took a little bit of weight off our shoulders and made that financial impact a little more manageable.”
Corinne Kinder, store manager from Wentzville, Missouri, said she was able to secure a down payment on a home by using her Bean Stock.
“In conversations with my partners, I go through the benefits and how it has positively impacted my life and how it can positively impact them. I tell them, next year you’re going to accrue Bean Stock,” she said in the release. “This is why we’re partners because we own stock, because you can use it to empower what you want to do in your life. You can buy the house, you can buy the car, you can choose to keep it going or you can sell it to do the things you want or need to do. It’s an amazing benefit. Let that money work for you and what you want to do in life.”
