Labor shortages have impacted multiple sectors as the ‘Great Resignation‘ has taken hold.
Many workers have left their jobs in search of greener pastures where the work-life balance is improved and good benefits are plentiful.
One industry that has been hit significantly by shortages is the service industry. This has led many shops, cafes, and bars under-staffed as COVID-19 restrictions have eased.
Starbucks appears to be feeling this shortage, as it intends to up its wages for baristas.
In fact, in an attempt to retain staff, baristas employed for at least two years will receive pay raises of up to 5%, whereas those who have been employed for five years could see their wages grow by 10%.
By the summer of 2022, it is expected that the average wage for a Starbucks employee will be just under $17 and that wages for service staff will range from $15 to $23.
The increase follows a 10% raise for Starbucks employees that was implemented last December. The company has claimed to have spent 1 billion dollars in bettering wages in the last year.
This investment in wages comes after the company has seen success on the stock market; Starbucks has seen its share prices rise by about 10% over the last year.
Alongside this, employees will receive $200 in referral bonuses.
“As Starbucks celebrates our 50th anniversary we are reminded that our heritage is based on the simple concept that our green apron partners are the heartbeat of Starbucks and that success is best when it’s shared.
“Today, we are announcing another historic investment in our partners, knowing that when we take care of our partners, they take care of our customers, and all stakeholders benefit.
“This is how we continue to build a great and enduring company. One that is committed to the ideal that doing good for one another – and for society – is good for business over the long-term.”
Changing employee incentives
Starbucks is not alone in raising wages for staff. The ADP Research Institute Workforce Vitality Report (WVR) found that all industries were seeing growing wages.
In fact, wage growth in the US has averaged at 3.3% this year according to the institute, which surveys 250,000 companies and 18 million employees each month.
With this in mind, Starbucks is still hiking up wages at a significantly higher rate compared to its peers and other industries. However, benefits have an increasingly vital role in staff retention and attraction.
During the pandemic, benefits and flexible working have become prevalent. In fact, some companies have turned to benefits when struggling to meet the wages offered by competitors.
On the back of this, Starbucks will undoubtedly want to make sure that its overall compensation and benefit offering is enough to keep employees and avoid staff shortages.