Starbucks chairman and ceo Howard Schultz sent the following message to all U.S. partners (employees) the morning of July 11, 2016, sharing new developments regarding compensation, Bean Stock, enhanced health care benefits, scheduling commitments, and dress code changes.
On Friday, I wrote you that I was at a loss for words in the aftermath of a tragic week of violence in our country. This past weekend, as I prepared to share important news with you, a word found me. That word is 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. Trust, after all, must be earned one human connection at a time.
Perhaps I am sensitive to this because earning your trust as partners has always been a foundational principle for me. Every day, I strive to build the kind of company that my father never had a chance to work for, one that not only cares for its people but gives them opportunities to be their best selves. Since our earliest days, the ways in which the company has tried to earn your trust has evolved. From being among the first to offer comprehensive health benefits and equity for partners who work 20 hours or more a week, to the Starbucks College Achievement Plan that more than 6,000 partners are enrolled in, we have always tried to innovate around the partner experience while being sensitive to your diverse needs, as well as the needs of our customers, marketplace realities and the complexity of the world beyond our own.
Striking the delicate balance between profit and a social conscience is a responsibility I take personally. Over the years, we have viewed our total compensation approach as the best way to create long-term opportunity for partners. We believe strongly in this philosophy but also recognize we must do more to help partners take advantage of all the company has to offer. Today I want to stress our ongoing commitment to make investments in our partners and share some new developments that reflect that commitment.
First, effective October 3, all partners and store managers in U.S. company-operated stores will receive an increase in base pay of 5% or greater. The range of increase will be determined by geographic and market factors and is intended to ensure Starbucks remains a retail employer of choice in all the markets where we operate.
Second, to recognize the contributions of our tenured partners in our ongoing success, we will be adding a future annual enhancement to our Bean Stock program. Specifically, we will be doubling the annual bean stock award for partners that reach two years of continuous service with the company.
The combination of these changes will result in compensation increases between 5% and 15%. Our field leadership will be following up with market by market details in the coming weeks. These changes will begin to go into effect as early as October, and we remain committed to doing more each year to invest in our partners as part of our long-range, strategic plan.
Third,we are evolving our benefits program and online benefits platform so partners may shop, compare and choose health coverage with the similar convenience and personalization people experience when they shop, compare and choose airlines and airfare. Starting July 18, interactive tools on our site (mysbuxben.com) will allow partners to personalize their health coverage, select an insurance carrier and choose a coverage level that fits their needs, as well as a competitive price that fits their budget. In simple terms, the new health care options allow partners to only pay for the coverage they want and will actually use. We estimate that eligible partners could save as much as $800 annually by moving to a plan that better meets their needs. For partners selecting family coverage, savings are potentially more, perhaps as much as $2,600 annually. Whatever plan you choose, any savings go right back into your paychecks.
I also want to address scheduling, since I know this is an important and ongoing issue for many partners. Just as some of our customers’ routines change during the summer, so too do some of yours. While we have made progress over the years in providing more stability and consistency in scheduling, our field leaders are committed to make every effort to help you meet your specific scheduling needs especially when it comes to ensuring your benefits eligibility going forward. To that end, please know that you have my personal commitment that we will work with every partner to ensure you have the hours you need.
Finally, dress code. We have long prided ourselves on welcoming and respecting diversity, and we’ve heard your requests for more freedom when it comes to bringing your “whole self” to work. We believe that more variety, flexibility and personalization will further elevate the Starbucks Experience – for partners and customers alike. Our latest dress code changes are designed to work well with the green apron while expanding your options, providing more room for self-expression, and allowing you to choose from items that may already be part of your everyday wardrobe. We look forward to sharing additional details about our dress code updates at the Partner Open Forum scheduled for the end of July.
Starbucks has long been a third place for our customers, but it must also be the right place for you, our partners. I truly hope that the coming changes—significant pay and Bean Stock enhancements; the added choice and potential savings in our healthcare plans; our ongoing commitment to scheduling that works for you; and our evolving dress code—will deepen the reservoir of trust between us.
Again, the world around us is increasingly fragile. But our commitment to you is not. We are in this together, and honoring your needs is essential to Starbucks success. I know this, and I thank you for sharing with your leadership, and with me, your dreams as well as your challenges. I also know how hard you work, and I remain grateful for your continued trust in Starbucks to help you realize your individual aspirations as we work together to realize our shared goals.
With humility and respect,