Connect with us

Business News

Starbucks to bump up wages and benefits in 2018

(BUSINESS NEWS) Starbucks Coffee Company announces 2018 line-up of benefit and compensation offers, leading the industry with its strong retail employee benefit offerings.

Published

on

starbucks

Starbucks Coffee Company is adding an extra shot of espresso to its employee benefit and compensations offerings this year, according to a Jan. 24, 2018 announcement. Starbucks employees (also known as “partners”) can now eagerly expect another round of wage increases, stock grants, and sick time and parental leave program improvements in the coming months.

Overall, the newly-announced offerings total more than $250 million and will impact more than 150,000 employees. And, according to the company’s announcement, the introduction of these perks was accelerated by the recent U.S. tax law changes.

“While Starbucks already pays above the minimum wage in all states across the country, we have always felt strongly that a valuable benefits package must complement and contribute toward an industry-leading total compensation package,” Starbucks CEO Kevin Johnson said in a statement. “The value of Starbucks benefit package (fully accessed) is unmatched by other retailers and provides thousands of dollars of additional compensation value.”

Here’s what their employees will gain this year:

Additional wage increase
In April, U.S. hourly and salaried Starbucks employees will receive an additional wage increase which will be on top of the annual increases already doled out this year. Overall, this upcoming wage increase will cost the company $120 million. Wage increases will be allocated across the country based on cost of living and entry wage laws which vary state-to-state.

Stock grants
On April 16, Starbucks will offer an additional 2018 stock grant all full-time, part-time, hourly and salaried employees nationwide, so long as they have been active employees as of Jan. 1, 2018. Retail partners will receive at least a $500 grant each and store managers will each receive a $2,000 grant. Non-retail plant and support center partner grants will be awarded based on annualized salary or level. These stock awards, which will be 100 percent restricted units and will vest in one year, are valued at more than $100 million altogether.

Partner and family sick time
There’s going to be a new sick time benefit plan, too, which will allow Starbucks employees (Full-time, part-time, hourly and salaried) to accrue paid sick time based on how many hours are worked. This time off can then be used toward time off to care for themselves or a family member during illness. Starting July 1, employees will earn 1 hour sick time for every 30 hours worked. So, someone who works 23 hours a week will accrue about five sick days over the course of a year.

Parental leave
New moms aren’t the only ones covered by Starbucks parental leave policy anymore, either. All parents and non-birth parents can access up to six weeks paid parental leave when their family grows.

These changes aren’t the first of their kind for Starbucks, either. Since 2015, they have invested nearly $800 million in wage increases and benefits across its U.S. stores and expanded its Starbucks College Achievement Plan in early 2017. Starbucks is also set to invest nearly $7 billion of capital to build and renovate U.S. stores, manufacturing plants and technology platforms over the next five years.

To see how Starbucks employee compensation and benefits stack up against what other retailers offer, see their full release.

Sienna is a Staff Writer at The American Genius and has a bachelor's degree in journalism with an emphasis in writing and editing from the University of Wisconsin Oshkosh. She is currently a freelance writer with an affinity for topics that help others better themselves. Sienna loves French-pressed coffee and long walks at the dog park.

Continue Reading
Advertisement
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Business News

What small business owners can learn from Starbucks’ new D&I strategy

(BUSINESS) Diversity and inclusion have been at the forefront of Starbucks’ mission, but now they’re shifting strategy. What can we learn from it?

Published

on

Hands of all different skin colors on green background representing Starbucks' D&I.

Starbucks was one of many companies that promised to focus on diversity and inclusion efforts after the death of George Floyd by Minneapolis police in 2020. What sets Starbucks apart from other companies were its specific goals.

How It Started

They began with hiring targets and have now added goals in corporate and manufacturing roles. Starbucks’ plans and goals revolve around transparency for accountability. They released the annual numbers for 2021 as a way to help hold themselves accountable. The data they’ve released so far show that they’ve met nearly a third of their 2025 goals according to Retail Brew. Because of this information, we can see why they are choosing to move in the direction of manufacturing and corporate jobs. In 2021, POC’s fell to 12.5% of director-level employees from 14.3% in 2020 in manufacturing.

How It’s Going

Per Starbucks’ website stories and news, “[I]t will increase its annual spend with diverse suppliers to $1.5 billion by 2030.  As part of this commitment, Starbucks will partner with other organizations to develop and grow supplier diversity excellence globally.” To put that into perspective, they spent nearly $800 million with diverse suppliers in 2021. With these moves, by 2030, it will increase by almost double.

As part of their accountability and progress, they plan to partner up with Arizona State University to give out free toolkits to entrepreneurs on fundamentals for running successful diverse-owned businesses. Another goal they’ve listed is to boost paid media representation by allocating 15 percent of the advertising budget to minority-owned and targeted media companies to reach diverse audiences.

At the heart of all this information on their goals and future plans, data transparency and accountability are what’s forcing them to look at the numbers to make specific goals. They are doing more than just throwing money at the problem, they are analyzing how they can do better and where the money will make a difference. Something that, as entrepreneurs, we should all do.

Continue Reading

Business News

Peloton is back-pedaling: Reports of price increases, layoffs, and cost cuts

(BUSINESS) After a recording of layoffs leaks, ‘supply chain’ issues cause shipping increases, and they consult for cost-cutting, Peloton is doomed.

Published

on

Man riding Peloton bike with instructor pointing encouragingly during workout.

Is Peloton in Trouble?

According to many reports, Peloton had success early in the pandemic when gyms shut down. Offering consumers a way to connect with a community for fitness along with varying financing options allowed the company to see growth when many other industries were being shuttered.

After two years, CNBC reports that the company is “being impacted by …supply chain challenges” and rising inflation costs. According to the report, customers will be paying an additional $250 for its bike and $350 for its tread for delivery and setup.

As demand has decreased, Peloton is also considering layoffs in their sales and marketing departments, overheard in a leaked audio call. The recording details executives discussing “Project Fuel” where they plan to cut 41% of the sales and marketing teams, as well as letting go of eCommerce employees and frontline workers at 15 retail stores.

Nasdaq reported that the stock fell 75% last year, after a year where it soared over 400%.

Peloton reviewing its overall structure

According to another report from CNBC, Peloton is working with McKinsey & Company, a management consulting firm, to lower costs as revenue has dropped and the growth of new subscriptions has slowed since the pandemic. Last November, according to NPR, Peloton had “its worst day as a publicly-traded company.” It also anticipates greater losses in 2022 than originally predicted. It makes sense that the company would reexamine their strategy as the economy changes. They aren’t the only one that is raising prices amid supply chain issues.

It will be interesting to watch how Peloton fares

Peloton has a large community that pays a monthly fee for connected fitness. While growth has slowed, the company still has a strong share of consumers. Although it is facing more competition in the home fitness market and more gyms are reopening, as Peloton adjusts to the new normal, it should remain a viable company.

Continue Reading

Business News

CEO is offering folks thousands to *quit* their jobs, with one catch

(BUSINESS) A CEO out of Arizona is challenging employment norms by offering a sort of “sign-off” bonus upfront, but this method has one fatal flaw.

Published

on

Man counting cash in his hand representing the CEO offering money to employees who quit.

Chris Ronzio, the CEO of Trainual, a software company in Arizona that aims to systemize and scale your small business, is offering cold hard cash to quit your job in an unconventional ploy to bypass the effects of the Great Resignation.

Before you rush to turn in your notice and make some extra cash, you should know that this offer is dependent on being selected as a hirable candidate and making it through the hiring process for Trainual. This option is also offered to new hires after 2 weeks of employment.

This model of employment gives the employee the ability to fire the company and walk away with a little sum of money. The thought process of the CEO was outlined in an article by the Insider, saying it is a strategic move to retain top talent and maintain a strong company culture. While this is a unique approach…it has a glaring flaw. The offer is only good for the initial two-week period. However, it can take some time to recognize the shortcomings of any company when you begin employment. We can all recognize the long-term financial potential of reoccurring income and while $5,000 is not anything to shake your finger at, it will eventually be gone. I think we can all agree that constructive criticism can be difficult to swallow at times, however, if Trainual was truly invested in this model they would extend the offer at other key times during employment. What if this offer was again available at the 1-year mark? If the offer reappeared at a one-year review, the turnover may increase.

Per the Insider article, Ronzio was quoted as saying, “With today’s market, hiring teams have to move quickly to assess candidates and get them through the process to a competitive offer, so it’s impossible to be right 100% of the time,” Ronzio said. The CEO added, “The offer to quit allows the dust to settle from a speedy process and let the new team member throw a red flag if they’re feeling anything but excited.”

These statements detail another dimension to consider which is the employment hiring process and timeline. If top candidates are in such high demand that the process has to be sped up to secure a workforce, this monetary compensation can help to ensure the hiring decision. Although, when the offer was implemented in May of 2020, the offer was $2500, half of what it is now. Ronzio reasoned that they could stay while they looked for another job so they increased the amount to compensate for those with a higher salary range.

Let me preface this by saying that yes, accountability should exist, but I would be interested to know the turnover rate for the hiring team. The cost to the company from this unique approach adds extra weight for those making the decisions on who to hire. The stress the hiring team faces has to be factored into the candidate decisions. How many times can the hiring team get it wrong before they’re let go? While the pressure to hire the right candidate should always factor in, one has to wonder about the effects of this model.

Continue Reading
Advertisement

Our Great Partners

The
American Genius
news neatly in your inbox

Subscribe to our mailing list for news sent straight to your email inbox.

Emerging Stories

Get The American Genius
neatly in your inbox

Subscribe to get business and tech updates, breaking stories, and more!