- Posted February 4, 2014 by
Starbucks Thailand Employee Treatment
15 years have passed since the opening of the first Starbucks store in Bangkok, and the income and store count here has been growing almost exponentially. Just 2 years ago, the region Thailand is in generated more than 35% operating margin. Compared to the EMEA (Europe, Middle East, and Africa region) and the Americas region, generating 0.9% and 20.9% operating margins respectively, Thailand is generating a very healthy amount of profit. What is the reason for the profitability of Starbucks here? Is Starbucks Coffee charging excessive prices or somehow keeping costs very low?
Most coffee costs the same, no matter where you buy it. The packaging, cups, and various other materials that go in to making the coffee also cost the same all around the world. So what is the reason for this high profit? It could be that Starbucks has particularly expensive prices. A normal tall coffee in Thailand costs 3 dollars, or around 100 baht, only marginally less than a tall coffee from Manhattan. However, a can of coke in Thailand costs 50 cents, or 15 baht, which is about half the price of a coke in America. China’s state media has accused Starbucks of pay gouging before, too. However various sources have stated that for the quality of Starbucks’ goods, the prices of them are fair. One other effective way of lowering the costs in a store is by lowering the compensation and benefits for the employees, or “partners”, as the Starbucks Company dubs them, in a store. The less health insurance, benefits, and wage employees get, the more money a company is able to save. So is Starbucks treating their partners like this? I had an interview with 2 employees of Starbucks to see if this was true.
One Starbucks employee has claimed that Starbucks has good pay and benefits, which includes medical insurance coverage.
“Starbucks is a fast growing company,” she says. “(It) is stable and offers good benefits.”
She believes that the compensation and benefits are fair, and that she is much better off in Starbucks than in another coffee chain. While she works hard to get paid, she is never asked to work overtime, and is very happy with the job she has now.
“I need to be responsible for customers and be attentive to every glass of beverage,” she says with a smile.
Starbucks has been found to have good employee treatment, as partners of Starbucks have told that they are very happy with the way Starbucks works with them, and that they are given good benefits, even if the pay may be a bit less than they would like.
However, another Starbucks employee begs to differ. She has found that while Starbucks has been very employee-friendly over the time she has worked there, lately the treatment and focus on partners has gone downhill.
“I felt that the current leaders are not preserving the culture, values and guiding principles of the company,” she tells. “Starbucks has always ingrained in us that a great business is business with a conscience and it’s all about the people, our ‘partners’. With the new leadership team of Starbucks, ethical leadership and conducting business with integrity, values and principles of the company were gone.”
She feels that other employees are likely to think the same way about the current state of Starbucks, and that the fact that these values are no longer aligned would be a good reason for employees to resign.
“The Spirit of Starbucks was gone and the focus has changed,” she says. “Starbucks used to be a very special and unique place for customers and our partners. Now, I feel that it’s just another company.”
Along with the new leadership comes a big gap between the wages of those who work behind the counter and those who work behind a desk, she claims.
“(My) concerns are mostly with the message delivered externally and the inconsistencies with how it is executed internally. I am a big ‘partner’ advocate and I struggled when the company shifted the focus (away from) the partner’s experience. I felt that we should have maintained a balance between the two,” she says.
She also says that the company is becoming more intent on having better earnings and revenue than treating employees well. With the recent store count and profit increase going on in Thailand, it’s no surprise this is true.
Starbucks is a booming corporation here in Thailand, with a multimillion-dollar budget that keeps on growing as it expands across the globe. But however profitable a company is, it can still be guilty of unethical treatment. Although Starbucks has been giving its employees very good compensation and benefits, even stocks, it seems that Starbucks is doing this to try and mask the fact that they have been not treating their employees with the respect they once had. For those who are only concerned with getting as much benefit out of a job as possible, Starbucks is one of the best places to work at, but for those who want employees to be treated with respect, Starbucks is a place you would want to stay away from.