More firms ex­pand benefits

Star­bucks and McDon­ald’s add tu­ition as­sis­tance to at­tract, keep work­ers.

Los Angeles Times - - BUSINESS - By Sa­man­tha Ma­sunaga sa­man­tha.ma­sunaga@la­times.com

Star­bucks and McDon­ald’s add tu­ition as­sis­tance to at­tract and keep em­ploy­ees.

When Star­bucks Corp. said this week that it would pay for em­ploy­ees to get a four-year col­lege de­gree on­line, the cof­fee com­pany joined a grow­ing num­ber of em­ploy­ers that are adding benefits to at­tract and keep work­ers.

Tu­ition as­sis­tance, paid time off, wage in­creases and other benefits in­creas­ingly are be­ing added to com­pen­sa­tion packages, said John Bre­men, man­ag­ing direc­tor at Tow­ers Wat­son, a hu­man re­sources con­sult­ing com­pany.

Star­bucks’ tu­ition pro­gram may not be a novel idea, but ex­perts say tu­ition as­sis­tance has usu­ally been limited to white-col­lar em­ploy­ees, not work­ers at or near the min­i­mum wage. McDon­ald’s Corp. an­nounced a sim­i­lar pro­gram this month.

With an im­prov­ing econ­omy and more job choices, work­ers can ex­pect to see more gen­er­ous benefits, Bre­men said.

The un­em­ploy­ment rate has plum­meted from dou­ble-digit highs dur­ing the Great Re­ces­sion to a low of 5.5% in March. Com­bined with ris­ing wages, the la­bor mar­ket is the health­i­est it has been in years.

“Clearly com­pa­nies are re­act­ing to tighter and more com­pet­i­tive la­bor mar­kets,” Bre­men said. One sign: “They try to get a much bet­ter sense of what em­ploy­ees want by ask­ing them.”

An em­ployee sur­vey led McDon­ald’s to of­fer its work­ers tu­ition as­sis­tance for col­lege, spokes­woman Lisa McComb said.

McDon­ald’s, which has been tar­geted by la­bor unions de­mand­ing higher pay, also an­nounced last week that it would raise the min­i­mum wage at com­pany-owned restau­rants and pro­vide paid time off for work­ers.

Em­ploy­ees at both com­pany-owned and fran­chised lo­ca­tions can take part in the Arch­ways to Op­por­tu­ni­ties tu­ition aid pro­gram, said Lisa Schu­macher, direc­tor of ed­u­ca­tion strate­gies for McDon­ald’s.

Crew-level em­ploy­ees can re­ceive up to $700 a year, and fran­chise own­ers and op­er­a­tors can get up to $1,050. The as­sis­tance lev­els are based on the av­er­age cost of com­mu­nity col­lege classes, Schu­macher said.

In ad­di­tion to col­lege, the pro­gram also gives em­ploy­ees the op­por­tu­nity to take classes in English as a sec­ond lan­guage or to earn their high school di­ploma, a $1,295 cost that is cov­ered en­tirely by McDon­ald’s.

“From a busi­ness per­spec­tive, when you in­vest in peo­ple’s devel­op­ment ... you have the op­por­tu­nity to drive re­ten­tion and po­ten­tially have an im­pact on who you’re re­cruit­ing into the busi­ness,” Schu­macher said.

Star­bucks’ tu­ition an­nounce­ment may en­cour­age other com­pa­nies to fol­low suit, said Ni­cholas Cle­ments, a pro­fes­sor of hu­man re­sources man­age­ment at Ge­orge­town Uni­ver­sity.

“Star­bucks is a highly vis­i­ble or­ga­ni­za­tion,” Cle­ments said. “Mone­tar­ily, it’s quite an un­prece­dented move.”

More em­ploy­ers, es­pe­cially in the ser­vice sec­tor, are start­ing to see the ben­e­fit of in­vest­ing in their work­ers, said Rita McGrath, pro­fes­sor of man­age­ment at Columbia Busi­ness School.

That’s a sharp con­trast from the re­ces­sion, when many com­pa­nies slashed or elim­i­nated benefits.

“We’re start­ing to see more com­pa­nies get­ting more savvy about the kinds of benefits that will help peo­ple be more ef­fec­tive in their lives,” McGrath said. “We may be on the brink of a real tran­si­tion.”

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