Howard Schultz, CEO and chairman of Seattle-based Starbucks Coffee, believes that his business couldn't achieve profitablegrowth if it didn't provide competitive employee benefits. In 1990, he began providing all employees, which at the timenumbered 1,800, with a benefits package that included stock options, medical and dental insurance, and a free pound of coffeeeach week. The big surprise was that the program extended to part-time workers, who made up 50% of the company's retail sales force.
Schultz believes that such comprehensive benefits coverage is not only feasible but ultimately profitable for growing companies of all sizes. "Including part-timers does increase our insurance fees, but you can't just consider that fact in isolation," says Schultz. Providing part-timers with insurance has helped bring turnover to below 50% in an industry where it typically runs more than 100% annually.
"Thanks to lower turnover, we'vesaved more in training costs than we've spent on insurance," notes Schultz, who believes that part-timers can become as committed to a company as full-time workers.
In 1992, Starbucks went public. In 1994, it had systemwide sales of $285 million. Part-timers who work more than 20 hours a week still get benefits and stock options.