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Is Howard Schultz trying to help Starbucks?

· anything else

Bloomberg news report Starbucks is paying its U.S. Workers to get university degrees. At first thought, I was thinking whether Starbucks is using this approach as a tool to reduce staff turnover. This is most likely the case given that as the US economy is picking up, the job opportunities in the fast food businesses and retail businesses will increase over time. In addition, the minimum wage is increasing across the nation. Furthermore, few in this industry will view having a job even in the most famous global food and beverage franchises , such as Macdonald and Domino, equivalent to as having a career. In simple, one will rarely say I want to build a career with these franchise by starting out as a crew. By offering free university education, it seems that Starbucks employees especially those with the intelligence and social capabilities will stay for a slightly longer period of time on their jobs instead of drastically reducing their working hours to take up full time education in a campus. This has a visible marginal effects on the cost of manpower and available of manpower supply to Starbucks operations in the short run but this cannot be sustainable in the long run. Here are 3 good reasons for this is not a long term strategy.

Reason 1: Starbucks is too big to keep all the smart workers all the time.

Like any big organizations, the size of an organization limits available opportunities for talents to move up. Because Starbucks is a great brand and has great human capital development programs such as training and nice working environment, Starbucks is generally the number 1 choice for part time work for the undergraduates from good universities in general. Here I am excluding the outliers like Mark Zuckerberg, Bill Gates or the likes who spot opportunities and hit home runs at them.The supply of upward management opportunities for the existing supply of Starbucks talents is constrained by the size of Starbucks growth and the general global economic conditions.

Reason 2:

Different strokes for different folks: many ways to obtain quality education.

A good university education distinguishes itself not by merely providing content knowledge but by bring bright minds together to collaborate on something inspiring or to nurture an expanding knowledge horizon. Gone are the days that people say that they learn a lot by soaking up the content delivered by the lecturers in a good university. This is because university notes and education content can be accessed even for free on the internet via googling it. There are many MOOCs (Mobile Open Online Courses) from the top ranking universities based wide discipline genre , EdX (top universities like Harvard, Tokyo University) to the specialised practical based genre like CodecademySkillshare etc. Hence the Arizona State university online education offer only works for people with no or less clue about what the current internet has to offer. Unless the Arizona State university online education offers an university education that is specifically tailor to Starbucks operations and that enables more opportunities for existing Starbucks talents to move into these corporate roles, there is nothing special about the Starbucks university grant program.

Reason 3: It is difficult to assess the economic impact of this program.

Because Starbucks did not take measures to assess the before and after effect of its staff who is receiving this education offer, we will not know whether the staff benefited from investing time to receive this education. Learning a content and not applying it over time render that knowledge obsolete in a world where change is the only constant.

Although the gesture to offer this program to its existing staff seems good, a careful analysis renders a perplex situation into assessing the impact of its original intention. There will be doubts as to whether this is useful for Starbucks staff and Starbucks profitability but I have no doubt that this is a good corporate social responsible act from Starbucks and Howard Schultz.