Starbucks tuition deal raises the question: Who is employee development for?
  • leadership
  • Blog post

Starbucks tuition deal raises the question: Who is employee development for?

The workplace buzz this past week or so, around the water cooler and online, has been all about Starbucks’ just-a-few-strings-attached offer to pay for a college degree for U.S. employees who want to earn one.

Despite some fine print that wasn’t publicized in the initial announcement — mainly having to do with the timing and terms of the company’s tuition reimbursements — the offer has been praised by educational commentators as both generous and useful for employees. The company requires only that applicants work 20 hours a week and have the grades and test scores to get into Arizona State University, whose online degree program will provide the instruction. For their freshman and sophomore years, employees will pay reduced tuition; for their junior and senior years, all of their costs will be covered.

But while there are many interesting aspects to the Starbucks college-for-all program, I want to focus in on two that particularly fascinate me: Employees don’t have to earn their diploma in a subject that will help them in their Starbucks jobs, and they don’t have to stay with the company for any specific length of time once they’ve gotten their sheepskin.

Wow. This isn’t a vocational training program by any means. Many employees will leave after getting their degree on Starbucks’ dime, and whatever relevant skills they managed to pick up — if any — won’t accrue to the company that paid for them to acquire them. And even if they stay, it’s hard to see how that degree in English Lit will make them any better at mixing mochas, or managing mocha mixers.

So how does this altruism make business sense? And is there anything here that other employers can replicate, or at least learn from?

To the first question. Starbucks CEO Howard Schultz says he’s doing it for four reasons:

  • It’ll help attract a better class of employee
  • It’ll keep good employees around, at least some employees, and at least for a while
  • It’ll improve performance (although Schultz didn’t spell out how this would work, presumably employees will feel some obligation toward an employer that is saving them somewhere in the high six figures in tuition costs.)
  • It’ll burnish the brand, even if employees leave after completing the degree, as they fan out into other workplaces with the love of Starbucks engraved upon their hearts and its praises on their lips.


A great place to work
Schultz didn’t use these words, but he’s clearly trying to make his company a Great Place to Work. (It’s not the first thing Starbucks has done along these lines; already it provides health insurance even for part-time employees.)

There’s an official Great Place to Work list, produced for Fortune magazine by the eponymous Great Place to Work Institute. (Starbucks was on it in 2013, but isn’t in 2014.)

Which brings us to the second question: What can other employers take away from the Starbucks move?

It’s pretty simple, really. Do you want to be seen as a great place to work? You don’t have to be on any official list to reap the benefits of that image. There are a lot of ways to get the reputation, but one has to do with employee development: Are you developing employees just so they can be of greater use to you, or are you responding to employee aspirations and helping them, as the Army puts it, “be all they can be”?

Your reputation
If you can build a rep as a place both where employees learn and flourish, and whose alumni go on to do great things because of your investment in them, you’ll never have trouble recruiting great people again. Your brightest young folks will have more reasons to stay, too.

To be sure, your path to that reputation may be a different one from that of Starbucks, which as a very big company was able to leverage a significant tuition discount from ASU. Still, the coffee maker’s initiative provides a good jumping-off place for you to start reflecting on what your organization’s path might look like.

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