Starbucks plans to boost worker compensation by as much as 15%

A worker at a Starbucks Green Apron Delivery Service at the Empire State Building in the Manhattan borough of New York, on June 1, 2016.
A worker at a Starbucks Green Apron Delivery Service at the Empire State Building in the Manhattan borough of New York, on June 1, 2016. PHOTO: REUTERS

WASHINGTON (BLOOMBERG) - Starbucks, facing growing competition for workers, plans to raise employee compensation by as much as 15 per cent later this year.

Staff in its United States company-operated stores will get a bump in base pay of at least 5 per cent on Oct 3, Starbucks said in a statement Monday (July 11). The coffee chain also is doubling the size of its annual stock award to employees who have been with the company for two years. Combined, the changes will bring the compensation increase to as much as 15 per cent.

"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," Chief Executive Officer Howard Schultz said in the statement.

Starbucks faces a tightening labour market in much of the US, as well as minimum wage increases in some states and cities. That's pushed restaurants and retailers, including Wal-Mart Stores, McDonald's and Target, to boost pay in a bid to retain hourly workers.

Starbucks said last year that employees who work at least 20 hours a week were also eligible to have full tuition covered for online classes at Arizona State University.

In addition to the compensation changes, Seattle-based Starbucks also is loosening its dress code, Mr Schultz said.

"We've heard your requests for more freedom when it comes to bringing your 'whole self' to work," he said. "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."

Details on that policy change will be released by the end of this month.