Starbucks to give free college education to thousands of workers

Coffee company believes perk will lead to lower attrition rates and improved performance

Starbucks chief executive Howard Schultz said he believes the free education will lower attrition rates and increase performance.

Starbucks chief executive Howard Schultz said he believes the free education will lower attrition rates and increase performance.

Mon, Jun 16, 2014, 16:51

Starbucks will provide a free, online college education to thousands of its workers, without requiring that they remain with the company, through an unusual arrangement with Arizona State University.

The programme is open to any of the company’s 135,000 US employees, provided they work at least 20 hours a week and have the grades and test scores to gain admission to Arizona State. For a barista with at least two years of college credit, the company will pay full tuition; for those with fewer credits it will pay part of the cost, but even for many of them, courses will be free, with government and university aid.

“Starbucks is going where no other major corporation has gone,” said Jamie Merisotis, president and chief executive of the Lumina Foundation, a group focused on education. “For many of these Starbucks employees, an online university education is the only reasonable way they’re going to get a bachelor’s degree.”

Many employers offer tuition reimbursement. But those programmes usually come with limitations like the full cost not being paid, new employees being excluded, requiring that workers stay for years afterward, or limiting reimbursement to work-related courses.

Starbucks is, in effect, inviting its workers, from the day they join the company, to study whatever they like, and then leave whenever they like - knowing that many of them, degrees in hand, will leave for better-paying jobs. Even if they did, their experience “would be accreted to our brand, our reputation and our business,” Howard Schultz, the company’s chairman and chief executive, said in an interview. “I believe it will lower attrition, it’ll increase performance, it’ll attract and retain better people.”

In a low-wage service industry, Starbucks has for decades been unusual, doing things such as providing health insurance, even for part-timers, and giving its employees stock options.

Whether in spite of those perks or because of them, the company has been highly successful; its stock, which closed Friday at $74.69, has grown in value more than 100-fold since it went public in 1992.

The university and the company say they do not know how many Starbucks employees will take advantage of the programme, which includes help with paperwork and academic advising, but they expect thousands to enroll, and Crow said Arizona State has prepared for a major surge in enrollment. Tuition for Arizona State’s online undergraduate courses is usually about $500 per credit, and it takes 120 credits to earn a bachelor’s degree.

NYT