Starbucks Is Giving Its U.S. Employees a Raise
Starbucks this fall will give U.S. store employees and managers a raise that the coffee giant says will boost compensation by as much as 5% to 15%.
In a broad letter written by Chairman and CEO Howard Schultz, Starbucks (SBUX) says effective Oct. 3, all retail employees (which it calls “partners”) and store managers at U.S. company-operated stores will receive an increase in base pay of at least 5%, a range that will be determined by the geographic location of the store and other market factors. The retailer is also doubling the company’s stock option awards, which it calls the Bean Stock program, for partners that have worked at the chain for two years of continuous service. The combination of those changes are why Starbucks says compensation can increase by as much as 15%.
“Striking the delicate balance between profit and a social conscience is a responsibility I take personally,” said Schultz in a statement.
Starbucks’ decision to raise salaries comes after the chain made headlines for an increase to starting salaries that it began to enact in early 2015. That put Starbucks ahead of the curve, as many other restaurants and big-box retailers have since also increased pay to better compete on talent. While Starbucks doesn’t disclose wages, a spokesman told Fortune the chain pays above minimum wage in every market it serves.
The company employs about 157,000 people in the U.S, with 150,000 of those in company-operated stores with the rest in supporting roles in roasting, manufacturing and other functions.
Schultz has carved out a reputation for making broad statements when it comes to a variety of social causes. He took the opportunity to do so again on Monday, when he addressed recent police shootings of African Americans that have garnered international attention. Schultz said as he began to prepare to share the news of the wage hike over the weekend, he settled on a single word: trust.
“For me, trust is a force that brings people together regardless of differences because they share common values. While trust in America may seem to be fraying, I do believe the majority of Americans recognize our shared humanity and strive to ensure that respect, civility and compassion rise above the alternatives,” he said.
Schultz went on to further explain that earning the trust of his employees has been an important principle for the CEO. Among the other notable employee issues he addressed on Monday were changes to the company’s health program (Starbucks wants to give employees the ability to select an insurance carrier and coverage level that works for them), scheduling, and hinting at possible updates to the company’s dress code.