Starbucks boosts pay, OKs tattoos, offers ‘Starbucks for Life’ prize
Chief operating officer Troy Alstead said the company will increase starting-pay rates in all U.S. markets beginning in January and allow visible tattoos. Starbucks is also creating a contest that offers winners “Starbucks for Life.”
Seattle Times business reporter
Starbucks kicked off its holiday season with gifts for its employees and new strategies to draw in customers, including the promise, for a lucky few, of free java for life.
The Seattle coffee giant announced Thursday it will pay its U.S. employees more and relax its dress code to allow tattoos and other forms of self-expression to show.
Starbucks also will start letting customers in Portland order using their mobile phones before the end of the year, a service that will spread to the rest of the U.S. through 2015.
It also unveiled a most unusual promotion, designed to enroll customers in its loyalty programs: the chance for a few shoppers paying with a Starbucks Card or a mobile device to win “Starbucks for Life.” Ten winners in the U.S. will receive one free item — from drinks to salads to pastries, but with some restrictions — every day for 30 years.
The moves come as Starbucks seeks to navigate two important challenges: consumers’ migration from malls to online shopping, and growing concern about the quality of retail jobs, especially as these, once considered temporary, are filling the gap left by manufacturing in the American economy.
Starbucks has long offered benefits unusual in the retail sector, such as health insurance, even for part-timers, and stock. Recently it launched a program to subsidize online college education at Arizona State University for its baristas; the first 1,000 or so began classes Oct. 15.
But the company has been criticized over relatively low pay and over inconsistent and hectic work schedules.
Chief Operating Officer Troy Alstead said Thursday in an email to staffers the company will increase starting-pay rates in the U.S. in January. That month all baristas and shift supervisors will also receive a raise, and experienced partners will be eligible for a “lump sum increase” to reward tenure. Pay will be reassessed annually.
The company didn’t disclose pay rates, which vary according to market; a Starbucks employee recently told The Seattle Times he started at $9.50 an hour. Job-reviews website Glassdoor indicates the average barista wage is $9.32 an hour.
These improvements follow moves by the company to allow customers paying with mobile phones to tip baristas using the Starbucks smartphone app.
Retailers have long lagged behind manufacturers in pay because of their slim profits. But Starbucks, which has been growing like gangbusters in recent years, has plenty of money: It made $512 million in the quarter that ended June 29, on $4.1 billion in revenue.
As of the end of its fiscal year, September 2013, the company employed nearly 182,000 people around the world, including 137,000 in the U.S.
CEO Howard Schultz, a longtime proponent of providing good benefits to employees, says investments in staff help everybody: the staffers, the company’s bottom line as it improves retention of better employees, and a society afflicted with a growing pay gap.
“You can’t look at anything today as a zero-sum game,” he said in a recent interview.
Starbucks also loosened its strict sartorial policy to allow baristas more flair. They can show tattoos, except for those on the face and throat; the change addresses a popular complaint by baristas, who complained that having to wear long sleeves to cover tattoos was uncomfortable and outdated.
Barista Kristie Williams started a Coworker.org petition last August to change the tattoo policy. It collected more than 25,000 signatures. “I am jumping up and down and am so excited that we can now be more comfortable at work,” Williams wrote in a statement.
Baristas can also sport colored ties and neck scarves, as well as black denim. Shirts can be worn untucked if the shirt is no longer than the back pockets and “your midsection doesn’t show.” Multiple piercings — formerly a no-no — are now allowed, as long as it’s no more than two earrings per ear and a small nose stud.
The ban on “unnatural (hair) colors” — such as purple, green or pink — continues, however.
“We want to build a company where self-expression, empowerment and inclusion are nurtured,” Alstead said.
Starbucks will also offer employees more time with managers to talk about their personal goals and the work environment. In addition, the company will offer bonuses to 28,000 outstanding employees each quarter, while eliminating performance-review forms and ratings for baristas and shift supervisors.
Store employees will also get one free food item per shift.
The initiatives announced Thursday “will ensure we are paying a competitive wage that better positions us to attract and keep the best partners,” Alstead wrote in his email to staffers.