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Proposal for Researching Solutions to Employee Retention Issues at Starbucks

Keirston White

Prepared for: Kevin Johnson, CEO, of Starbucks

Kristie Week

June 22, 2024

Introduction

This proposal aims at sourcing funding that would be utilized in conducting research regarding solutions to the problem of employee turnover in Starbucks. The overall goal is to establish and analyze causes of employee turnover and look at ways to improve on it. To ensure that the research gathers adequate information, the study will use quantitative surveys and qualitative interviews. Some of the strategies that have been recommended include increased provision of career development activities, accommodation for flexible work schedules, and better pay and perks. The specific objectives and research questions developed for the project will be executed according to a clear timeline and budget to make the study comprehensive and efficient. Overall, addressing employee retention remains a key avenue for enhancing productivity, morale, and profitability for the Starbucks organization.

Current Problem

A major concern for Starbucks is the high turnover rates, which has a dire impact on productivity and financial success (Azriuddin et al., 2020). High turnover also means that there are many costs related to factors like recruitment, selection, and training of new employees. These costs are not negligible; based on data from the society for Human Resource Management, the cost for employee turnover has been estimated to be about 6-9 months of the exiting employee's salary (SHRM, 2019). In a company like Starbucks, which employs a vast workforce, such costs can quickly add up and therefore result in sizeable losses.

In addition, high turnover poses inconvenience through creating organizational disruption through poor performance, and low productivity. When the fair-weather employees leave, the faithful workers are left to deal with additional work and stress, which may make them quit as well (Azriuddin et al., 2020). Fluctuations in staffing may also lead to the company's reduced ability to provide quality customer service, which is especially important in the highly saturated coffee market. A lack of a proper attitude towards customers always hampers sales and leads to the erosion of the company's reputation among the customers.

Industry statistics indicate that the employee turnover rate stands at 60% in the retail sector (Fuller et al., 2022). However, Starbucks has been experiencing approximately 65% (Starbucks, 2022). This is even higher than the turnover rate of the food services industry, proving that Starbucks needs to implement better retention practices. For example, the survey conducted in 2023 reported that 45% of the Starbucks employees left the company because of the absence of career advancement opportunities (The Workforce Institute at UKG, 2023). This fact shows that there is a stark absence of the company's focus on adequate employee development initiatives. Also, employees indicated a moderate level of dissatisfaction with flexibility of the scheduling by 35% (The Workforce Institute at UKG, 2023). Strict timetables can cause organizational conflict with personal time, which is especially sensitive when the employee is studying or has family duties. Such dissatisfaction with scheduling can lead the employees to search for other employment opportunities with a better scheduling system. Moreover, new employees claimed that they would leave if their pay was insufficient, and 20% of employees agreed with this statement (The Workforce Institute at UKG, 2023). Fair remuneration policies such as competitive wages and benefits are essential in keeping employees since most industries are keen on high turnovers. This means that Starbucks must revisit its compensation policies to ensure they are adequate and competitive in the industry. Conclusively, solving all these challenges is crucial for ensuring high levels of employee' satisfaction and turnover, organizational performance, service quality, and profitability.

Figure 1: Employee turnover reasons at Starbucks

Proposed Research

Research Objectives

· Identify the main factors contributing to employee turnover at Starbucks.

· Evaluate the effectiveness of existing retention strategies.

· Propose and assess the feasibility of three innovative retention solutions.

Methodology

· Quantitative Surveys: Distributed to employees across various Starbucks locations to gather data on job satisfaction, engagement, and reasons for leaving.

· Qualitative Focus Groups and Interviews: Conducted with current and former employees, as well as management, to gain deeper insights.

· Data Analysis: Quantitative data will be analyzed using statistical software, while qualitative data will be coded and thematically analyzed.

Proposed Solutions

To counter the major problem of high turnover rates among Starbucks' personnel, the following specific measures are suggested: First, career advancement opportunities are very limited, and this is one of the reasons why people tend to leave the company. To counter this, Starbucks should adopt systemized career growth frameworks, learning maps, and other professional development initiatives. The prospect of career advancement is yet another element that Starbucks can use to improve its employees' satisfaction and retention levels (Azriuddin et al., 2020). Where one recognizes such an aspect, many employees are willing to stay loyal to the company and produce better quality work since the company cares for them.

  Secondly, the adoption of tight working schedules has been highlighted as one of the major challenges in organizing the work and life balance, leading to high dissatisfaction rates among employees. To address this issue, Starbucks should now offer more flexible workplaces for its employees. This includes the availability of flexible work schedules, the ease of options to trade shift, part-time employment, and the possibility of telecommuting for certain positions. Some of these actions would be especially valuable to employees who are students, parents, or have other obligations, increasing their satisfaction and therefore, retention. In some ways that would benefit Starbucks to retain its employees for a longer time, the organization needs to understand the requirements of its workforce.

Finally, the lack of proper remuneration and remuneration packages have also been mentioned as causes of staff turnover. To this end, Starbucks should also carry out a comprehensive review and modification of wage and benefits structure to reflect the ongoing trends in the market. In the same regard, the offer of performance-based bonuses would also help motivate the employees to work hard and not to look for another company to work with (Kee et al., 2021). Other incentives like childcare support and health check facilities also work wonders in improving the satisfaction levels of the employees. Such advantages not only assist in recruiting quality employees, but they also assist in retaining these employees by giving them the perception of being cherished by their employer.

The three solutions proposed for solving the problem of Starbucks' employees' turnover refer to the development of career orientation activities, work flexibility, and changes in compensation and perks. These measures are headed toward the root causes pointed out by the employees, resulting in high satisfaction levels, higher engagement levels, and reduced turnover. In conclusion, it can be stated that investment in these solutions is advantageous for Starbucks, as it would decrease costs associated with high turnover, increase customer satisfaction, and promote strong corporate culture.

Task Scheduler

Figure 2: Gantt chart illustrating the timeline for research tasks

Budget

Estimated Research Costs

The proposed budget reflects the time and expertise required for thorough research and analysis. The hourly rate is competitive and ensures high-quality work.

References

Azriuddin, M., Kee, D. M. H., Hafizzudin, M., Fitri, M., Zakwan, M. A., AlSanousi, D., … & Kurniawan, O. (2020). Becoming an international brand: A case study of Starbucks. Journal of The Community Development in Asia, 3(1), 33-43. DOI:  https://doi.org/10.32535/jcda.v3i1.706

Fuller, D., Logan, B., Suarez, P., & Valkova, A. (2022, August 17). How retailers can attract and retain frontline talent amid the Great Attrition. McKinsey & Company. Retrieved from https://www.mckinsey.com/industries/retail/our-insights/how-retailers-can-attract-and-retain-frontline-talent-amid-the-great-attrition

Kee, D. M. H., Hidayah, N., Syamilah, H., Nasuhah, N. N., Syasya, N. H., & Norathirah, W. (2021). How Starbucks maintain its competitive edge?–the secret of its success. Journal of the Community Development in Asia, 4(2), 34-43.

Society for Human Resource Management (SHRM). (2019). The High Cost of Employee Turnover. Retrieved from SHRM.org.

Starbucks. (2022). Environmental & social impact report: Starbucks fiscal 2022.

The Workforce Institute at UKG. (2023). Employee Turnover and Retention Survey. Retrieved from WorkforceInstitute.org.

Starbucks Employee Turnover Reasons

Lack of career growth scheduling issues inadequate compensation 0.45 0.35 0.2

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