Starbucks (Photo : Reuters)
Economist Nicole Smith thinks that Starbuck's recently announced plan to offer its US employees for online bachelor's degree is an excellent move and is far better than providing perks.
The coffee chain has announced that it is offering college tuition coverage for an online bachelor's degree from Arizona State University to all employees who work for more than 20 hours a week. It was previously offered to juniors and seniors to complete their degrees.
"It's the difference between teaching someone to fish and handing someone a fish," said chief economist at Georgetown University Center on Education Nicole Smith.
Starbucks budget for the program is more than $250 million and it expects at least 25,000 employees to get the benefit by 2025, according to Time.
About 2,000 workers have already taken benefit of the plan and Starbucks hopes to get more employees involved. Over 140,000 of the coffee chain's employees are eligible for the program.
The plan is great for executives who want to extend their educational profiles and the economist thinks that since Starbucks is not asking to employees to stay with them for whole career, it can really help the employees to strengthen their profiles.
Smith noted that with a college degree, the wage premium rises about 84 percent. So, the degree has long-term benefits for the employees, CNBC reported.
Starbucks's move is aimed at attracting and retaining more employees. The labor market is tight and all service-seeking companies are trying new ways to engage and reward talents.
"Presumably you would attract better candidates" who are interested in the program, BTIG chief global strategist Dan Greenhaus said.
However, work life balance, especially for single moms and parents, can be a challenge. Still, Smith thinks the plan is a better way to enhance the skill sets of the employees.
"Essentially Starbucks is recognizing its employees as assets that are worthy of investment," Smith added.
