Starbucks To Shell Out $250 Million On Free 4-Year College For Every Employee: Here's Why

Starbucks Coffee just announced a commitment of up to $250 million to ensure that each of its U.S. employees–whether full or part-time–can go to four years of college and graduate without any tuition debt. (Let me start with the specifics–the "what"–of Starbucks' new initiative and then get to why Starbucks is doing it and why, as a corporate culture and customer service consultant, I see business positives in this Starbucks initiative)

Starbucks' announcement today represents an expansion of the coffee giant's previously-announced educational commitment; the Seattle-based company has already (since June) been offering tuition coverage but until now has limited it to juniors and seniors. Starbucks is now expanding the program so that all eligible part-time or full-time can apply for and complete all four years of a bachelor’s degree through Arizona State University's generally well-regarded online degree program.

Starbucks spokesperson Laurel Harper says that some 2,000 Starbucks partners are already enrolled in the program, and that the expansion announced today means the company is going to invest up to $250 million or possibly more to help at least 25,000 partners graduate by 2025. As I covered here recently, has also committed to hiring 10,000 “Opportunity Youth" over the next three years (defined as a U.S. population of nearly six million disconnected youth between the ages of 16 and 24 who are not working or in school.)

Now, if you're a business leader yourself, the questions that have you furrowing your brow might sound like these: "Why is Starbucks doing this, how is it good for their business, and would a similar expansion in what I offer my own employees be a good idea for my own company?" So here's my take on the business sense of Starbucks' decision, a decision that I see as potentially  positive for both corporate culture and customer service.

1. Part of this grows organically from Starbucks' long-visible corporate culture and ethos.  Starbucks as we know it today was created by Howard Schultz, a leader who comes from a working-class background, son of a factory work who was ill-treated in his career.  Schultz has written that he promised himself early in his career that if he ever was in a position to make a difference in the lives of the people who worked for him, he would do so.  Once he was in such a position, rather than backtracking on his personal commitment, he immediately made it visible, by providing health insurance to both part-time and full-time workers, a rare move by such a large and geographically diverse employer.
2. Part of this works the way it worked for Henry Ford when he doubled his employees' wages: creating and maintaining economic wellbeing among one's employees can ultimately lead to a larger and more enthusiastic customer base.  Starbucks' customers are generally well-to-do, generally well educated; what could be better for the company than to increase this base?
3. What could possibly be better for employee retention and engagement?  You're not going to leave your job during the years you are planning to (but can't yet get around to) going to college; you're not going to leave your job while you're in college, and the company will bless you and wish you well if you get a new job upon your graduation, as you'll be leaving the ranks of employee and joining the ranks of "brand ambassador."
4. Employees these days care greatly about the corporate social responsibility and ethics of a company that they consider as a potential employer. It's just about the first question out of their mouths, according to every head of HR I've worked with lately.  So it makes Starbucks an employer of choice even for prospective employees who themselves have no interest in pursuing a first or second degree.
5. It's about genuine care for customers.  I know that sounds odd, so let's look at it.  A customer-facing organization like Starbucks has to be on its feet and nice to customers all day long.  Not just kind of nice, really nice.  And that kind of nice comes off as a lot more genuine if the employees providing it aren't just "on stage." If the company is being nice to them, if they're being nice to each other, and if being nice to customers is simply an extension of what's going on, not just an act.
6. The "opportunity youth" part of the project represents a way to not only do some good for a particularly desperate set of our society, but broadens Starbucks' pool of potentially great employees.  One of--probably the most important– challenge of building and sustaining a great customer service-focused organization is selecting fantastic employees: the employees with the innate qualities required to provide superior service. (Here's my WETCO list of the innate traits required in a great customer-facing employee).  Such employees don't come from any particular socioeconomic background; they can be found literally anywhere.  In actively working to broaden its recruiting scope, Starbucks is increasing the chance it will find such employees in place where they would previously have been overlooked.

Or, to give Starbucks the last word (it's their money, after all), here's spokesperson Harper again: "With the right skills and training, Starbucks believes Opportunity Youth represent a huge, untapped talent pool for American businesses, and through employment and access to higher education, hopes to help create a sustainable future for these young Americans."

Micah Solomon is a customer service consultant, corporate culture consultant, keynote speaker and bestselling business author, most recently of High-Tech, High-Touch Customer Service