A Smudge on the White Hat
Kevin Salwen on Business
Starbucks has long been one of my favorite companies -- an inspiration for the way it runs its business. It cares about the Earth, it cares about its employees, it cares about fairly treating its suppliers. A centerpiece of the Starbucks Way is its health-benefits program: The coffee retailer offers health insurance to any employee who works 20 hours a week, 10 hours less than the rest of the fast-food industry.
For decades, that policy was a main reason why employees came to Starbucks -- and stayed and stayed; treat people fairly and they'll want to work with you.
But now the Starbucks strategy appears to be pinching the company. Founder Howard Schultz appeared before the Senate yesterday with this remarkable statement: Starbucks will spend more on health insurance this year than on the raw materials for its coffee. Schultz was joined at the hearing by another employee empowerment star, Jim Sinegal, the CEO of Costco, as well as the CEOs of Verizon and Drugstore.com. All of them agreed that the crisis was crippling.
So, what are we to learn here? That companies must scale back their health benefits as they grow? That making sure your employees are covered is a game only for entrepreneurs? That the health-care system in this country is a disaster (duh!)?