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Starbucks, a Great Place to Work - SHRM

As seen in Society for Human Resource Management online magazine on August 25, 2015

Starbucks is known for its generous employee benefits. In fact, treating employees well is part of Starbucks’ brand image. But have the company’s efforts actually led to greater employee satisfaction? To find out, analytics company Monitor 360 reviewed 5,000 reviews of Starbucks by the coffee giant’s store and corporate employees. The company chose to take a closer look at Starbucks in part because it beats the average industry employee turnover rate by 140 percent.

In the reviews, Starbucks employees gave their company an average rating of 3.8 stars out of 5—based on culture and values, work/life balance, senior management, compensation and benefits, and career opportunities. In comparison, the average rating for Dunkin’ Donuts was 2.8 stars and the average for Peet’s Coffee was 3.2 stars. Yet, Starbucks still has turnover. And when it must replace a barista, for instance, it costs the company $3,000, according to the Monitor 350 review. When listing positive aspects of their jobs, employees were more focused on Starbucks’ vision and values than on more unusual benefits such as health insurance for part-time workers. The study said the results suggest that “consistently delivering an inspiring narrative about the value of employees to the company can motivate as much as offering free lattes” to Starbucks employees.

The focus on a company’s values doesn’t surprise workplace author and consultant Alexandra Levit. “Seventy percent of the workforce is now Millennials,” she said. “They want to work for a company that has a vision that benefits society.” Notably, 12 percent of store and corporate employees said in the reviews that they felt ill-treated by middle management.

Alex Cole a principal of Monitor 360 and an author of the study, said that seems to be partly a result of poor communication. “If you have leadership that’s articulating a positive narrative, you have to make sure that everybody up and down the organization articulates that,” Cole said. “Middle management doesn’t seem good about articulating the importance of employees.

They need to be trained.” Starbucks declined to comment for this story.

Bruce Tulgan, CEO of Rainmaker Thinking, a management research, training and consulting firm, has seen this disconnect between middle managers and their staff in his own research on retail organizations. “One of the factors people care about is, how much support and guidance do they get from their immediate supervisor?” said Tulgan. “There’s a fundamental tension between the company’s efforts to do things for their employees, and to maintain productivity and quality and deliver for customers at as low a cost as possible,” Tulgan added. “It doesn’t shock me that employees say they sometimes experience that pressure.”

One finding that surprised the study’s authors: The employees considered smaller benefits such as free parking and free coffee just as important as more expensive ones like health insurance and paid tuition for Arizona State University’s online courses. “In a service business where you’re interacting with customers, what’s important to you is knowing that management cares, that you’re not just another number,” said Beverly Kaye, founder of Career Systems International, an HR consulting firm specializing in employee engagement and retention. “The smaller perks might say it louder than the health benefits.” Added Julie Alexander, CEO of Great Teams – Great Results, an HR consultant that specializes in employee engagement: “Little [benefits] make a difference because they’re obvious and you see them every day.”

The clear message, said Cole: Companies should not give in to the temptation to cut their small, inexpensive benefits as a cost-saving measure. However, some of Starbucks’ efforts just haven’t worked, and may have hurt employee engagement. Last spring’s “Race Together” campaign, in which baristas were encouraged to start a conversation with customers about race relations, was quickly withdrawn after widespread criticism. Some observers said at the time that one reason the campaign flopped was the lack of employee training.

Joan Mooney is a freelance writer based in Washington, D.C. - See more at: