Monday, July 7, 2014

Order a Tall, Non-Fat Latte: Support an Employee’s Education

If you read our previous post, then you know that non-cash incentives are a proven way to increase your company’s bottom-line and motivate your employees to be the best they can. Starbuck’s must have gotten the memo. Starbucks announced in June that their new incentive program will cover the cost of college for their employees in a new partnership with Arizona State University. Starbucks employees who want to finish college will get some help with their tuition, but it won't be a free ride. A student who completes all four years at Arizona State University's online program could pay in the ballpark of $30,000, according to calculations based on tuition costs. Also, a significant slice of the cost won't be paid by Starbucks at all, but by its partner, ASU. Workers who are admitted will receive a scholarship from the college that will cover 22% of their freshman and sophomore year's tuition. The remaining balance will have to be paid out of pocket by the student or through traditional financial aid. Workers completing their junior and senior years will get a 44% scholarship from ASU. The rest of the cost will be taken out in student loans which Starbucks says it will pay off after students complete each semester.

Starbucks says research, provided by ASU, shows that funding the semester up-front increases the drop-out rate. Tuition for ASU's online program is about $15,000 per year. "It's going to cost millions of dollars, but I don't view it as a cost," Starbucks CEO Howard Schultz told CNNMoney's Poppy Harlow in an interview. "I view it as an investment. And I'm so confident that this investment is going to drive performance and value for our shareholders." Most of Starbucks’ 135,000 U.S. employees are eligible to apply. The main question asked about this program is, why? When employees who graduate take off their caps and gowns, it's entirely possible they'll also hang up those green aprons. There's going to be more than enough options for those employees at the Starbucks of the future. They're consistently evolving in terms of what the stores are. The trick is to look at Starbucks as a consumer products company, not necessarily a coffee retailer. The approximately $30,000 cost of two years of tuition is worth it to keep quality employees with the company.(1) Starbucks did a great job at listening to their employees and coming up with an incentive system that not only motivates their employees to work but also helps better their lives. What is your company doing to motivate your employees and reward their accomplishments?

For more information about incentive programs and how to motivate your employees check out our website

1. Wallace, Gregory, and Amanda Hobor. "Starbucks Workers Could Pay $23,000 for 4-year Tuition." CNNMoney. Cable News Network, 20 June 2014. Web. 29 June 2014.

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