Starbucks is making moves to expand employee benefits for new parents in a bid to win back its workforce after a tumultuous few years.
Starting this spring, the coffee giant is increasing its parental leave policy for employees who work an average of 20 hours or more per week; parents who give birth are now eligible for 18 weeks of paid time off, and other parents are eligible for 12 paid weeks off. The policy includes workers who choose to adopt or foster children long-term. Currently, hourly workers at the company receive six weeks of paid leave and up to 12 weeks of unpaid leave after the birth of a child. Until now, only corporate employees were offered 12 or more weeks of paid parental leave.
“Our benefit was already the best in retail, but after hearing from some partners who wanted more time, we are making this change,” the company’s new CEO Brian Niccol wrote in a letter to employees announcing the benefit change.
Starbucks says that its new parental leave benefit is an effort to attract and retain top talent. “We need to provide our partners the support they need to be with their families when it matters most, and one of those times is the birth of a child or welcoming a child through adoption or long-term fostering,” Sara Kelly, executive vice president and chief partner officer for Starbucks, tells Fortune. “This investment is about enabling our partners to be there for their families, and that will then support their future within the organization.”
But as Starbucks expands its parental leave, it’s also cutting back on employee pay increases and bonuses. Last week, the company told hourly workers to expect smaller pay raises this year than in years past. And in November, the coffee chain announced that corporate workers will receive 60% of their year-end bonuses.
The company says its compensation plus benefits packages for hourly retail employees are competitive. “We pay hourly partners an average of over $18 per hour, and when you add the comprehensive benefits, it gets to an average of $30 an hour in competitive pay, plus benefits at Starbucks,” Kelly said in response to the recent news regarding the lower raises for hourly workers. “We make investments that support our partners and wage is one component of that.”
The latest parental leave expansion comes as Niccol makes moves to turn around the struggling coffee chain. A big part of that mandate involves making a break with several years of discord between in-store employees and top management that has led to tense exchanges and a major labor union drive. This year in particular has been fraught for the company and its workforce, which faced short-handed stores, overburdened baristas, and complaints from customers about long wait times.
Niccol has taken a more conciliatory tone with the union than some of his predecessors, and spent a significant portion of his first earnings call at the company outlining changes to improve the day-to-day experience of baristas.
