As families’ education costs skyrocket and the need for skilled workers keeps business owners up at night, a new model for workforce training has just hit the streets. Starbucks is providing a free college education to thousands of its employees through an online partnership with Arizona State University. Open to all of Starbuck’s U.S. employees who work 20 hours a week or more, Starbucks will pay full tuition for those employees who have the grades and test scores to gain admission to Arizona State.
For a fast-food company, Starbucks’ has really broken the mold in terms of employee attraction and retention: they offer health insurance even for part-time employees as well as employee stock options. Yet, with all these benefit costs, Starbucks’ stock has grown more than one hundred fold since 1992 when it went public. And according to the book, “The Starbucks Experience,” Starbucks’ employee turnover is 120 percent less than the industry average.
For many small business owners, including small manufacturers, additional spending on employees’ wages and benefits seems counter-intuitive to financial growth. But in an era where the competition for a skilled workforce accelerates every day, a little more spending could, instead, reap a lot more in profitability.
Bassi Investments Inc, a money management firm headed by economist Dr. Laurie Bassi, invests in companies that invest in their people. Bassi Investments develop portfolios of firms that make significant investments in human capital management, and the investments’ above average market returns demonstrate that in order to make money, businesses must now acknowledge the importance of their workforce to the success of that business.
Among the MEP network of centers, Pennsylvania-based MANTEC has provided dedicated human resources services since 2000. Their workforce service offerings are market-driven because their small manufacturers (less than 100 employees) generally have no human resource staff. Yet, HR services are the second most frequent request among their clients.
So, if you are not a Starbucks, what can you do to keep your good workers on board? In many cases, opportunities for greater participation in business decisions, employee stock ownership plans (ESOP) and internal career mobility are a good start. Pay-for-performance and wage increases attached to skill increases can also be effective in reducing turnover.
The old saw of, “Why train, when they’ll just leave?” no longer cuts. Once you’ve spent good money on recruiting why wouldn’t you want to support that investment and make sure you get the continued benefit of an ever-smarter workforce?
When you learn how much a small investment in people can pay off for your business, the only thing that will keep you awake at night will be that afternoon cup of coffee.
Stacey Jarrett Wagner is a principal with The JarrettWagner Group, LLC. JWG specializes in imaginative idea development and implementation for workforce issues such as business/workforce analytics, workforce capacity, alignment of workforce and economic development strategies, post-secondary education transitions and training, research and benchmarking for talent management, non-traditional worker strategies, workforce policy assessment and development, and partnering with philanthropic institutions.
This piece first appeared in Manufacturing Innovation Bloga
Top image: Courtesy of Starbucks.