Starbucks redux on free tuition
Starbucks (SBUX) is giving it the old college try…again.
The largest coffee retailer is expanding its agreement with Arizona State University to offer free college tuition to employees for four years instead of the previous two years.
The revised Starbucks College Achievement Plan-- which was launched last June-- will be available to all 140,000 company employees who work at least 20 hours a week as well as 10,000 young people who are not working or in school that the company plans to hire over the next three years.
Starbucks says nearly 2,000 employees are currently enrolled in the plan, which provides 49 online degree programs.
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CEO Howard Schultz calls it a good step not just for his workers…but for America.
“Everyone deserves a chance at the American dream. The unfortunate reality is that too many Americans can no longer afford a college degree…We’re stronger as a nation when everyone is afforded a pathway to success.”
But Yahoo Finance’s Aaron Task thinks along with being altruistic, the company has two good business reasons to do this.
“It’s definitely a PR move to let their customers think this is a company with good social values and I want to spend my money there,” he argues. “It’s also in part about retaining employees, which is a huge issue for any corporation.”
Task adds it makes sense for companies to spend a little to keep their workers happy.
“Recruiting and training a new employee costs a lot more than giving them a raise or giving them a perk like paying for additional education, like Starbucks is offering,” he points out. “It’s good for the company’s bottom line to do this.”
Task notes Starbucks CEO Howard Schultz is well known for using the company to promote social issues. And he likes this idea a lot better than Schultz's move last month to create the “Race Together” program, where baristas were encouraged to engage customers in discussions of race in America. The company has since eased that back after a public backlash.
“As a consumer, it makes more sense for me to know they treat their employees well as opposed to a store where they want to talk about race relations in this country,” Task says. “So I prefer this socially-conscious path to some of the others they’ve talked about doing.”
