People & Human Resources

Starbucks to pay its staff to go to uni

Kirsten Robb /

Coffee giant Starbucks has announced it will foot the bill for online university education for thousands of its employees in the US.

The coffee chain launched a new program yesterday which will pay for its employees to attend online classes at Arizona State University.

Although the company has struggled in Australia, the US arm of Starbucks has been acclaimed for its human resource tactics in the past.

The program is open to any of the company’s 135,000 staff based in the US and working in its company-operated stores, support centres and plants, provided they work at least 20 hours a week and have the test scores to gain admission to Arizona State.

It will allow employees to finish a bachelor’s degree from a choice of 40 undergraduate programs delivered online through the top-ranked University.

Juniors and seniors will earn full tuition reimbursement for each semester of full-time coursework they complete toward a bachelor’s degree, while freshmen and sophomores will be eligible for a partial tuition scholarship and need-based financial aid for two years of full-time study. 

Staff will have no commitment to remain at the company past graduation.

“I believe it will lower attrition, it’ll increase performance, it’ll attract and retain better people,” Starbucks CEO Howard D Schultz told The New York Times.

In the US, many employers offer tuition reimbursement, according to The New York Times. But those programs usually come with limitations such as the full cost not being paid, new employees being excluded, requiring that workers stay with the company for years afterward or limiting reimbursement to work-related courses.

Psychologist and chief executive of Seven Dimensions, Eve Ash, told SmartCompany offering employees tuition was a great investment.

“The opportunity to learn skills is highly valued,” says Ash.

“Starbucks is putting themselves in a better position to be an employer of choice,” she says. “Becoming an employer of choice is a highly regarded thing these days.”

Ash says employment is a two-way street, and employers need court the best people, in the same way employees make themselves attractive to the best companies.

She says the offer of training has traditionally been an attractive incentive to employees, but it is a huge step for a company to pay for the cost of tuition, especially in the US where tertiary education is notoriously expensive.

“The naysayers will say, ‘you’re making an investment and then employees will just leave’, but obviously it’s something you do in conjunction with creating great culture,” says Ash.

Ash says Starbucks is unlikely to make a move that’s financially unbeneficial to them, and the investment will allow the company to target younger, less experienced workers, while also giving it the opportunity to mould staff into a culture they want.

“It will be interesting to see if it attracts older people,” says Ash.

She says it is likely Starbucks will offer graduates managerial roles, rather than expect they stay on in blue-collar positions.

“They don’t have to make it an obligation to stay, because if a company is good enough, people will want to be there,” says Ash.  

“It’s a psychological offering and it’s nice to see they’re doing it without strings attached.”

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Kirsten Robb

Kirsten Robb is a former journalist at SmartCompany. Previously, she worked at News Corp as a property reporter for Leader Newspapers and the Herald Sun, and holds a Masters of Journalism at Melbourne University.

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