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Sarah Peyok headshot

Starbucks and Mental Health: Reaching and Retaining Talent in a Meaningful Way

Starbucks' approach to mental health could spark a wider trend for other companies, large and small, to beef up these important employee benefits.
By Sarah Peyok
Mental Health

In today’s competitive labor market, companies that lead with innovation, transparency and commitment have a better chance of onboarding and retaining talented employees. But among many challenges employees face, benefits designed to take on mental illness are either lacking, or are not accessed as often as they should be. As Starbucks moves forward with a novel mental health initiative to support all U.S. and Canada employees, the company may be leading the way to “break the stigma.”

That’s according to John Kelly, Starbucks senior vice president of global public affairs and social impact who also recently told CNN that the company’s initiative has the goal to “really normalize that your mental health is just as important as your physical health.”

Mental health has a huge impact on companies' performance

The CDC references that one in five Americans will experience a mental illness in a given year. The impact can be devastating, as struggles with our mental health can affect our ability to relate to others, handle stress and perform daily functions.

Starbucks innovative approach could spark a wider trend for other companies, large and small, to beef up mental health benefits. Not only is the company’s new plan gaining favorable attention, it is also working to support a healthy bottom line.

Mental health issues account for 30 percent of all disability costs. Studies show that taking effective steps toward managing mental health can produce a 15 to 33 percent reduction in health care costs.

How Starbucks’ mental health benefits go beyond what’s required

In the U.S., the Mental Health Parity and Addiction Equity Act (MHPAEA) requires that group health plans and health insurance issuers to ensure that financial requirements (such as co-pays, deductibles) and treatment limitations (such as caps on total allowed visits) applicable to mental health or substance use disorder benefits are no more restrictive than the requirements or limitations applied to most other medical benefits.

While the MHPAEA law supports inclusion of mental health benefits, the law is the baseline. In North America, many mental health benefits go unused because of stigma or because mental health benefits only kick in after the overall health plan deductible has been met. This can equate to paying between $60 to $120 out-of-pocket for the average 45 to 60-minute session. If you have higher-quality coverage, costs average between $20 to $50 per session, or of that equal to a typical health plan’s copay.

Starbucks’ new initiative is different in that it also includes an enhanced employee assistance program (EAP) and mental health training for store managers. Starbucks is training managers to respond to signs of mental illness and substance abuse on the frontline by partnering with Mental Health First Aid, a national program that gives people the skills to help someone experiencing an issue with mental health. Managers can act as on-site emotional support for their teams and encourage team members to access available benefits and resources.

By January, the company will also provide U.S. and Canada employees access to subscriptions for the app Headspace, which offers hundreds of guided meditations for a broad range of issues relating to stress, sleep and more.

Moreover, this isn’t the first instance the company has taken steps toward improving mental health benefits. In 2016, Starbucks Canada increased the amount employees can use annually to cover the cost of therapy from $400 to $5,000.

Going beyond more generous employee benefits

Last year, subsequent to the federal tax overhaul, the company pledged to spend $250 million on new employee benefits, including an increase in pay for U.S. employees. Another added benefit included the addition of six weeks of paid parental leave for hourly employees who become new dads. This benefit previously had been only offered to new mothers and adoptive or foster parents. The company also added subsidized childcare for all U.S. employees.

This time around, in addition to the EAP, Starbucks will partner with organizations that support ending the stigma around mental health. Born This Way Foundation, a mental wellness nonprofit founded by singer Lady Gaga, and Team Red White & Blue, a nonprofit that supports veterans’ well-being, will have reciprocal relationships with Starbucks and its employees.

“If we take a positive step forward, you know, sometimes that can be a catalyst for others to take a positive step forward and create a movement,” Kevin Johnson, Starbucks CEO, said in a recent interview.

As comprehensive, inclusive benefits become stronger motivators for workers to stay loyal to companies, employers like Starbucks that take steps to support a healthier workforce can gain the edge needed to succeed.

Image credit: Nik Shuliahin/Unsplash

Sarah Peyok headshot

Based in Michigan, Sarah is passionate about sustainability, storytelling and bringing to light sustainability principles that can be threaded into business strategies and communications. Formerly an editor for CSRwire and freelance writer for many organizations forwarding the principles of corporate social responsibility and circularity, she is excited to be a contributor to TriplePundit. Connect with Sarah on LinkedIn and Twitter.

Read more stories by Sarah Peyok