Operations

Starbucks plans to give its workers another raise

The coffee giant is giving all its workers at least 3% pay raises next year and will let hourly workers accrue vacation time sooner. Also: barista championships.
Starbucks employees
Starbucks is giving workers at least 3% pay raises in January. | Photo courtesy of Starbucks

Starbucks is raising pay for baristas again in January and will let them accrue vacation time earlier as part of a pay and benefits package the Seattle-based coffee giant highlighted on Monday, which also includes the company’s first-ever barista championships.

The company said it plans to increase the wage rates for its U.S. hourly workers by at least 3% on Jan. 1. Employees with two to five years of service will get a raise of at least 4% and those with five or more years of service will get at least 5%.

This follows increases the company has been giving its workers over the past year, including a raise to at least $15 an hour in 2022 that brought the average wage for baristas at the chain to $17.50 per hour. Baristas at the company’s coffee shops make wages between $15 and $24 an hour, and Starbucks said that total compensation including benefits is about $27 per hour.

Starbucks also said that workers will accrue vacation earlier starting in February. Hourly workers will start accruing vacation time 90 days after they’ve been hired.

The company also said that it plans to kick off a North America Barista Championship in February, giving baristas “the opportunity to showcase the unique role they plan in bringing the Starbucks experience to life for customers each day.” Baristas and shift supervisors in the U.S. and Canada will be eligible.

The announcement comes as Starbucks continues to push its pay and benefits, along with the working environment, amid an ongoing battle with unions at some 300 of its U.S. locations.

Starbucks has invested heavily in what it calls a “Reinvention” over the past year, with new equipment such as single-cup brewers for hot coffee and portable cold foamers designed to ease workload, and scheduling designed to give employees more hours. Hours per partner increased 5% last quarter, executives said last week, and turnover is down 10%, bringing hourly turnover at its 9,600 corporate U.S. locations below pre-pandemic levels.

The company said that it has invested more than 20% of its profits from its most recent fiscal year into wage increases, training and new equipment. Starbucks also said that total cash compensation for workers has increased by nearly 50% since 2020 in the form of higher wages and expansion of hours.

The company said that it collects a range of preferred, minimum and maximum hours from its employees to help managers with scheduling and managing workforce. Starbucks said that it expects its improved scheduling protocol will improve the stability, flexibility and consistency of employees’ work schedules.

Labor has been a major issue with restaurant chains in the past two years as post-pandemic labor shortages made it virtually impossible for many operators to fill open positions. The issue was particularly acute at Starbucks, which dealt with an unprecedented unionization effort, one that ultimately led to the temporary return to the chain of former CEO Howard Schultz and ultimately the Reinvention plan and the hiring of Narasimhan.

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