SEATTLE – Last week, it was free charging stations. The news from Starbucks this week is even bigger: free college tuition for their employees.
The company announced yesterday that it will provide a free online college education to thousands of its workers, without requiring that they remain with the company, through an unusual arrangement with Arizona State University.
The program is open to any of the company’s 135,000 employees in the United States, provided they work at least 20 hours a week and have the grades and test scores to gain admission to Arizona State. For a barista with at least two years of college credit, the company will pay full tuition; for those with fewer credits it will pay part of the cost, but even for many of them, courses will be free, with government and university aid.
Starbucks is, in effect, inviting its workers, from the day they join the company, to study whatever they like, and then leave whenever they like — knowing that many of them, degrees in hand, will leave for better-paying jobs. At the same time, Starbucks is banking on the program to instill strong employee loyalty, while adding to the coffee giant’s employee-friendly reputation.
Even if they did leave, their experience “would be accreted to our brand, our reputation and our business,” Howard D. Schultz, the company’s chairman and chief executive, said in an interview with the New York Times. “I believe it will lower attrition, it’ll increase performance, it’ll attract and retain better people.”
According to the New York Times piece, Starbucks has for decades been unusual in the low-wage service industry, doing things such as providing health insurance, even for part-timers, and giving its employees stock options. (Like other food and drink chains, it has also been accused of using improper tactics in fighting unionization drives.) Whether in spite of those perks or because of them, the company has been highly successful; its stock, which closed Friday at $74.69, has grown in value more than a hundredfold since it went public in 1992.
The question is whether the company’s well-publicized and consumer-friendly move will be a game changer for the industry as other employers feel the need to compete by providing similar benefits.