Starbucks declared on Monday its intention to implement a minimum 3% wage increase in hourly wages for its US retail employees, effective as of 2024. Additionally, the coffee powerhouse disclosed plans to double the hourly earnings of its baristas over the next two years, commencing from 2020 levels. This ambitious endeavor will be achieved through a combination of extended work hours and augmented pay rates.
As of the present, Starbucks boasts an extensive network of approximately 17,000 stores across North America. The company’s American workforce currently commands an average hourly wage ranging from $15 to $24, inclusive of a comprehensive compensation package that encompasses benefits, culminating in an approximate total of $27 per hour.
Starbucks clarified that employees with a tenure of two to five years will be eligible for a wage increase of no less than 4%, while those with five years or more of service may expect a minimum 5% uptick in their pay. Notably, the implementation of these enhanced compensation packages, coupled with an extension of working hours, has yielded a marked reduction in turnover rates. This, in turn, has mitigated the need for frequent hiring and training of new personnel at elevated labor costs.
The corporation underscored the impact of these investments, asserting, “These investments have not only resulted in lower turnover, which in turn reduces our need to hire and train new employees at higher labor costs but have also increased hourly total cash compensation by nearly 50% since fiscal year 2020.”
Starbucks had previously unveiled its ambitious global expansion plan, aiming to surge from its existing 38,000 stores to an impressive 55,000 worldwide by the year 2030. To realize this objective, the company will channel resources into the establishment of cloud kitchens, which function as virtual eateries capable of swiftly serving food items in densely populated urban locales.
By fortifying its hourly pay structure, Starbucks is strategically positioning itself to vie more aggressively in the dynamic realm of specialty coffee, reaffirming its status as a pioneering force within the industry for years to come. This decisive move reflects the company’s unwavering commitment to the welfare and satisfaction of its valued workforce, and its dedication to maintaining its preeminent stature in the competitive landscape of the coffee market.
Source: Reuters
