Starbucks adds employee benefits to help with student debt, build savings accounts

Starbucks (SBUX) is adding two new employee benefits ahead of its Investor Day on Tuesday — a savings account with Fidelity and student loan management tools.

In letter to U.S. "partners," what Starbucks calls employees, Chief Partner Officer Sara Kelly said the inspiration for the benefits, which begin September 19th, came from its collaborative sessions with partners at stores across the country.

"One of the top ideas we have heard is support for partners who want to better manage their finances – from navigating student loans to getting better at saving," Kelly said.

Ron Crawford, SVP of benefits at Starbucks, told Yahoo Finance "a large portion" of partners are in college.

The Student Loan Management Benefit is intended to help partners manage their student loans through a partnership with the online tool benefit platform Tuition.io. This is in addition to the company's existing Starbucks College Achievement Plan, which allows eligible partners to receive total upfront tuition coverage for a first-time Bachelor’s degree through Arizona State University’s online program. Crawford hopes the benefits provide partners with the proper online tools and resources to help them get "reorganized" ahead of student loan payments going back into effect on Dec. 31, 2022, as well as the opportunity to cancel $10,000 in debt.

"We estimate that we've got about a third of our partners who have student loan debt. It's probably somewhere in the neighborhood of $20,000 to $25,000, which usually means a monthly payment of a couple of hundred dollars," Crawford said

My Starbucks Savings, the second new benefit offering, is intended to help partners save for the "unexpected," according to a company press release. In partnership with Fidelity, partners can contribute a portion of after-tax pay on a recurring basis directly from their paycheck to an individual savings account. As an incentive, Starbucks will contribute $25 and $50 credits at certain milestones.

"Any of our partners who open up one of these savings accounts and just start off with a $5 per paycheck contribution, when we see that we will drop $50," Crawford explained. "Every quarter thereafter, we see that they're still doing at least the $5 and they've got a balance of $50, then we will drop in $25 per quarter going forward."

Starbucks plans to contribute up $250 per eligible partner.

"We're really trying to do here is build a behavior, build a savings muscle, because that's what our partners are asking for, that they're wanting to save, but they struggle with how to get it done," Crawford added.

The new benefits, however, will not be offered to partners who work in unionized stores or in have been in the process of petitioning or voting to unionize after the date of May 3rd, when Starbucks announced a $1 billion dollar investment plan in its employees.

"The law doesn't allow us to unilaterally give them [to these locations], but ... as part of collective bargaining, we will obviously have this as one of the options through the process of the bargaining with those unionized stores," he explains.

According to National Labor Relations Board (NLRB) records, 233 Starbucks stores have voted in favor of unionization as of Wednesday, August 31, and 214 of those stores have been certified by the agency while 48 stores have voted against a union and 11 are currently being challenged.

The new benefits are the first to be announced since the Seattle-based chain named Laxman Narasimhan as incoming CEO, effective October 1st. The company noted that the benefits are an extension of nearly 30 the coffee giant has offered throughout the years.

Crawford said the benefits will ultimately lead to better customer service. "All of these programs that we've added through the years, what we have found is that when we make an investment in our partners, they in turn, provide an excellent customer experience to our customers."

Brooke DiPalma is a reporter for Yahoo Finance. Follow her on Twitter at @BrookeDiPalma or email her at bdipalma@yahoofinance.com.

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