By Ilan Brat
Starbucks Corp. plans to cover the full cost of an online degree
for U.S. employees who work at least 20 hours a week, broadening
its efforts to attract and retain employees amid a tightening labor
market.
The program expands the coffee giant's partnership with Arizona
State University, begun last year, that enables workers to earn
full tuition reimbursement for the last two years of an ASU online
bachelor's degree. Now Starbucks will foot the entire bill.
The company said it expects to spend up to $250 million to help
at least 25,000 employees graduate from college by 2025--the first
time it has quantified the projected costs of the program.
Participating employees can quit Starbucks at any time, including
as soon as they graduate, and face no penalties.
The program "demonstrates the conscience of the company and our
ability to try and do everything we can to help our people get
access to college, " Starbucks Chairman and Chief Executive Howard
Schultz said in an interview.
The effort is the latest of several recent initiatives by big
U.S. employers to make their workplaces more attractive as lower
unemployment levels and an improved economy create fiercer
competition for workers. McDonald's Corp. said last week it would
raise wages by more than 10% for employees at U.S. restaurants it
operates. Wal-Mart Stores Inc. is raising hourly pay for 500,000
workers to at least $10 next year. In January, Starbucks increased
pay for baristas, but didn't say by how much.
Seattle-based Starbucks employs 144,000 part-time and full-time
employees in the U.S.
Under the alliance with ASU, participating Starbucks employees
can take out loans to cover their tuition costs, and the company
will reimburse them after they receive passing grades for each
semester's classes.
Employees enrolled in the online program receive a tuition
scholarship of $2,420 a year and owe--before the company's
reimbursement--an average of $3,546 for four classes a year. That
is lower than the normal online-student rate of an average cost of
$5,966 for four classes a year, a spokesman for ASU said. Starbucks
students, like other ASU students, could further reduce their costs
through need-based grants, he added.
Starbucks employees can select among about 50 areas of study,
ranging from art history to urban planning.
The ASU spokesman said 92% of the nearly 2,000 Starbucks
employees who have taken advantage of the previous benefit have
continued their studies, about the same for other ASU online
students at a similar level.
Write to Ilan Brat at ilan.brat@wsj.com
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