That can sometimes make working behind the espresso bar a challenge for baristas, who already cope with the daily deluge of often bizarre drink orders. But for many employees, the company’s benefits make up for the daily slog. Opportunities to attend college online and, of course, Starbucks’ generous health insurance plans are among the perks cited by many employees when asked why they stay on.
But now Starbucks is being challenged by employees who say the company’s much-heralded maternity leave benefits are unfairly applied.
The coffee chain scored props from many working moms and dads earlier this year when it announced an upgrade to what was already a competitive maternity leave package. The highlight: 18 weeks of paid leave at 100 percent of average salary for mothers, spouses and domestic partners, whether by birth, adoption or foster.
A more careful reading, however, told the whole story: That full benefit is only available to the store’s corporate employees, not for those who work within its retail operations.
Starbucks says it stands out within the retail and foodservice sectors for offering six paid weeks of maternity leave to baristas who work an average of 20 hours a week. But this benefit only applies to birth parents, not to foster or adoptive parents and not to spouses or domestic partners. The company justifies the discrepancy by saying its benefits packages cost the company a whopping $558 million on what Forbes has tallied as 238,000 employees worldwide during the 2016 fiscal year.
Nevertheless, some baristas -- or, in Starbucks’ corporate terminology, “store partners” -- say the policy is unfair. Their protest was joined by as many as 80,000 people who signed petitions that were delivered to the company’s Seattle headquarters earlier this week.
For some of Starbucks’ hourly workers, this is question of whether the company is truly treating its employees equally. And a company spokesperson did not help matters when it explained to a local Seattle television station that “all partners (store and corporate) get the same amount of time off – the only difference is the compensation.”
As the Huffington Post has reported, the more generous benefits only apply to about 8,000 out of the company’s 170,000 U.S. employees. The company’s rationale is that it has to work harder to recruit and retain those employees – as in the ones who negotiate leases, determine the company’s strategy, decide what coffee to buy and where, or make sure the company’s labyrinth of information technology systems are always up and running. Or to put it in less delicate language: It is more difficult to find and keep happy the human resources executive who will plan out succession plans, or the marketing vice president whose decisions could make a difference in whether or not the company meets Wall Street’s expectations; the $10-an-hour worker who may not like his or her hours or store’s management, however, is not as central to the company’s long-term performance.
For years, Starbucks said it spend more on health care for its workers than on coffee; recently the company modified its health plans to make them more cost-competitive but also less comprehensive. Extending companywide maternity leave would add even more to the company’s costs.
Baristas can just as easily reply that a move from Starbucks’ retail side to its corporate operations rarely occurs, so reaping those benefits down the road will most likely never happen. Some would go further and say that the baristas and the customer experience they provide are central to the company’s mission.
A decade ago, Starbucks had expanded so quickly that it lost its mojo. Many baristas and managers were disengaged to the point that many stores became an absolute mess – just when competitors such as Dunkin’ Donuts and McDonalds started to serve much better-tasting coffee. The company in turn brought back former CEO Howard Schultz to reverse its plunging fortunes – and one step he took was the much-publicized nationwide three-hour closure to “reeducate” and re-inspire the company’s employees.
Watch for employee benefits, especially paid leave, to emerge as the next battle for hourly employees as they seek fairness in the workplace.
Compared to other companies within its sector, Starbucks is far ahead in the benefits game. But in recent months, some retail companies, including Nordstrom and Levi’s, have redrawn their human resources policies to so all corporate and store employees can enjoy the same benefits. In a tight labor market, more companies may find that makes the most economic sense in the long run.
Image credit: Elvert Barnes/Flickr
Leon Kaye has written for TriplePundit since 2010, and became its Executive Editor in 2018. He's based in Fresno, CA, from where he happily explores California’s stellar Central Coast and the national parks in the Sierra Nevadas. He's lived in South Korea, the United Arab Emirates and Uruguay, and has traveled to over 70 countries. He's an alum of the University of Maryland, Baltimore County and the University of Southern California.