In early April, I covered Starbucks Coffee’s announcement that it would offer a four-year college education for every Starbucks employee working 20 or more hours, at zero tuition expense. At that time, Starbucks committed 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. The program was announced with a goal of helping 25,000 employees graduate by 2025. The four-years bachelor’s degree is offered online through Arizona State University’s generally well-regarded degree program, and the Starbucks approach has been lauded by the U.S. Department of Education.
The response at the time to my story was overwhelming. But the thing about stories like this is that they make a splash in the media and then fall out of the general consciousness (outside of the company and the employees and prospective employees affected). So when I wrote that story I mentally committed to keeping tabs on how this initiative is going and what it's intended and unintended consequences turn out to be along the way.
Here's what I've got, in terms of an update on how the Starbucks College Achievement Program is going.
• The College Achievement Plan has turned into an absolutely epic recruiting and retention tool:
- A full 63% of new hires at Starbucks express interest in taking advantage of the benefit. According to Laurel Harper, Global Communications Manager at Starbucks, the College Achievement Plan is overwhelmingly cited by new applicants as “one of the main reasons they’ve applied to work here.”
- Overall, applications to work at Starbucks have increased by 600,000 from FY14 to FY15 (from 5.8 million in FY14 to 6.4 million in the latest fiscal year).
• Employees are taking the plunge and actually enrolling at a fast clip: 4,800 are enrolled in the four-year program as of today (that’s 2.5 times the number enrolled when I wrote my article in April, at which time a fledgling version of this program was already in progress), and Starbucks predicts that the enrollees will reach 15,000 over the next few years. The ages of the enrollees skew relatively young (average age 26, which is younger than the average age for online students in higher education) and the program appears to have broad-based appeal; Starbucks has enrolled four-year students from all 50 states.
• The level of commitment that the students seem to be bringing to the program is encouraging, with ASU reporting a 5% higher retention rate among Starbucks enrollees than among ASU’s core student body.
• On the other hand, some of the social predictions I made in my April article are harder, perhaps impossible, to measure. For example, I suggested that this was Starbucks’ way of emulating Henry Ford when he raised wages for his employees, which served to grow the market for his cars. In a similar if even more ambitious way, by creating essentially a Starbucks-supported sector of the middle class, the coffee giant is stabilizing the economy (to the extent that they have the power to do so) and thus stabilizing and ultimately growing the market for their products.
A broad prediction like this isn’t something I have any data on the success of; I do know that Starbucks is aggressively pursuing bringing “opportunity youth” (unemployed and/or uneducated young people) into its employment ranks and from there into its college program, and that in conjunction with this it is opening stores in previously neglected neighborhoods, including Ferguson, Missouri’s economically-challenged West Florissant neighborhood as well as Chicago’s South Side, Jamaica, Queens (NY), and other economically distressed neighborhoods across the U.S., at the same time committing to increasing local employment in these areas specifically. This seems like a potentially virtuous circle in the making, although it’s not clear if the broader social impact will be as I predicted, or, even if so, if that will ever be truly measurable.
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What’s next for the program? According to Laurel Harper at Starbucks’ Seattle headquarters, the company will be expanding and tweaking the program in a variety of ways. First off, they will be building a customized retail degree created by Starbucks and ASU’s W.P. Carey School of Business. The degree is designed for partners who want to stay with Starbucks and grow their career in retail after they complete their education.
Second, they are creating a Starbucks-specific elective course focused on corporate leadership, featuring Starbucks senior leaders as guest lecturers who will share case studies related to their functional areas of expertise. Finally, they are creating a mentorship program where seasoned employees of Starbucks can assist others in learning the ropes of the College Achievement Plan.
Micah Solomon is a customer service consultant, customer service speaker and bestselling business author, most recently of High-Tech, High-Touch Customer Service
