Linda Barrington, executive director of the Cornell ILR School’s Institute for Compensation Studies, says Starbucks’ new barista college plan aligns with the Starbucks corporate culture, which has been known for offering relatively generous employee benefits.
“Pay for service sector employees has been in the headlines a lot recently with regard to hourly pay. Starbucks’ action highlights that total compensation, however, comes in varying shapes and forms, and employees can be recruited, retained and motivated using many different kinds of rewards and benefits. The question is how much to spend and on which benefits?
“If you think about the culture and reputation that Starbucks wants to create, this kind of employee benefit aligns nicely with that strategy. It lets Starbucks claim a leadership role in providing opportunity for employees that is also community-minded. Just as Walmart would have carefully calculated the cost and benefits of raising the minimum hourly pay of its employees, Starbucks would have forecast that trade-off too. You don’t go into this kind of expense without thoroughly calculating the bottom line impact.”