How Starbucks Can Make Its Massive Bias Training Count

How Starbucks Can Make Its Massive Bias Training Count

Last month, a manager at a Philadelphia Starbucks called the police on a pair of black men who were waiting in the store for a business meeting and had yet to make any purchases. A cell phone video of the two men’s subsequent arrest, which also captured other patrons’ outrage over the incident as it happened, quickly went viral and prompted a nationwide conversation about the racial profiling that black Americans often face in places of business. For Starbucks, which has sought to establish itself one of America’s most progressive employers, it has created a crisis, raising questions about whether this was truly an isolated incident and whether the roughly 40 percent of Starbucks employees who identify as racial minorities have faced hostility or felt unwelcome in the workplace—as many Americans of color have indicated in surveys that they do.

In an unprecedented response, Starbucks quickly announced an ambitious initiative in which it will close all of its over 8,000 company-owned US stores on May 29 so that nearly 175,000 employees can attend an anti-bias training. By conveying that the company takes this matter seriously and is committed to addressing it, the announcement won the coffee chain praise in the world of public relations, but from the perspective of HR—and Diversity and Inclusion more specifically—the standards for success are much higher and more difficult to meet. To make this response count as more than a PR spectacle, Starbucks will need to demonstrate that it’s not just making the right kind of noise, but actually making meaningful changes that are tangible to its vast numbers of nonwhite customers and employees. Furthermore, whether the initiative succeeds or fails, it stands to have an impact far beyond this one company. The stakes are high and all eyes are on Starbucks.

From the D&I research team at CEB, now Gartner, here are some points Starbucks should keep in mind in designing and deploying this anti-bias initiative—and for HR leaders at other organizations to consider in their own efforts to combat the insidious problem of bias.

Anti-Bias Training Should Encompass all Stakeholders’ Perspectives

To underscore the importance of this training, Starbucks announced that the curriculum would be designed with help from prominent experts in civil rights and racial justice, including former attorney general Eric Holder, President and Director-Counsel of the NAACP Legal Defense Fund Sherrilyn Ifill, and Bryan Stevenson, founder and Executive Director of the Equal Justice Initiative. This A-list roster lends an extra dose of credibility to the initiative, but Starbucks might also consider engaging with the communities they serve to understand the experiences of their nonwhite customers on a more personal level. A great example of this kind of stakeholder-focused inclusion strategy is ANZ Bank’s accessibility initiative for people with disabilities, which involved stakeholders across the workforce, workplace, and marketplace in determining accessibility goals and how the bank would achieve them. (CEB Diversity & Inclusion Leadership Council members can read the case study here.)

Starbucks could also benefit from bringing employees’ voices and experiences into the conversation as opposed to making this a one-way training exercise. To be fair to the staff, they’re often at the frontlines of how the public feels about the company (like the time that a Miami man was videoed screaming “Trump!” at a black Starbucks employee, or the “Trump cup” protest, or the “open carry” protest, or the annual “war on Christmas” protests). Starbucks doesn’t exist to serve the community in the same way as the police or the government, but the company has consistently worked to cultivate a brand image of its cafés as public spaces, which imposes a unique set of challenges for its front-line employees.

Treat Employees as Partners, Not Part of the Problem, in Combating Bias

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Study: Stable Employee Schedules Boost Retail Sales, Productivity

Study: Stable Employee Schedules Boost Retail Sales, Productivity

In a randomized, controlled experiment at Gap, researchers Joan C. Williams, Saravanan Kesavan, and Lisa McCorkell sought out the effects of more versus less predictable schedules on the productivity of retail employees and the profitability of stores. “The results,” they write at the Harvard Business Review, “were striking”:

Sales in stores with more stable scheduling increased by 7%, an impressive number in an industry in which companies work hard to achieve increases of 1–2%. Labor productivity increased by 5%, in an industry where productivity grew by only 2.5% per year between 1987 and 2014. Our estimate is that Gap earned $2.9 million as a result of more-stable scheduling during the 35 weeks the experiment was in the field. Given that out-of-pocket expenses were small ($31,200), our data suggest that return on investment was very high. (If stable scheduling were adopted enterprise-wide, transition costs might well entail the costs of upgrading or replacing existing software systems.)

Unlike the typical way of driving sales through increase in traffic, the sales increase from our intervention occurred due to higher conversion rates and basket values made possible through better service from associates.

These findings, the authors underscore, contribute to a growing body of empirical evidence that lean staffing practices, with most employees on part-time, unstable, and on-call schedules, are not the money-savers they are often believed to be. It is indeed feasible for retailers to offer their employees more stable and predictable schedules, they add, but employers often overstate the benefits of an on-call system (reduced labor costs) while ignoring its drawbacks (such as poorer customer service and more management time devoted to scheduling).

This research comes at a time when schedule predictability has emerged as a focal point of labor activism and attracted the attention of regulators. San Francisco became the first major city to mandate predictable scheduling with its “retail workers’ bill of rights” in 2014, while Seattle passed a mandate in 2016 and New York City introduced a fair scheduling law for retail and fast food employees last year. Oregon became the first state to enact such a regulation statewide last summer and other states are mulling laws of their own.

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Some Companies Take New Approaches to Holiday Hiring

Some Companies Take New Approaches to Holiday Hiring

In light of the competitive US labor market, the coming holiday season has employers hiring early and often to meet their needs for people power, with warehouse and logistics jobs accounting for a large portion of the seasonal spike as online shopping continues to outpace in-store sales and retailers expand their e-commerce operations to suit shifting consumer demand. Not everyone is preparing for the holidays with a massive recruiting drive, however. Walmart, for example, is eschewing the traditional hiring spree this year and instead giving more work to its existing employees, Abha Bhattarai reported at the Washington Post earlier this week:

“These extra hours will help staff traditional roles like cashier and stocker, and newly created positions such as personal shoppers and pickup associates,” Judith McKenna, chief operating officer for Walmart U.S., said in a statement. “This is what working in retail is all about, and we know our associates have the passion to do even more this year.”

Walmart employees and labor advocacy groups say the move could help address long-standing complaints among workers who say they are underemployed. Many part-time employees, they said, would like full-time work. Walmart considers 34 hours a week full time, when workers receive more benefits. …

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How Investors Failed to See the Talent Connection in American Airlines’ Latest Wage Hike

How Investors Failed to See the Talent Connection in American Airlines’ Latest Wage Hike

American Airlines’ market value took a hit last week after its CEO Douglas Parker told investors of a plan to raise wages for crew members by an average of 6.5 percent, or a total of $930 million through 2019. Amid criticism, Parker stood by his decision, but within 48 hours, the company’s stock dropped by more than 8 percent, wiping out roughly $1.9 billion in American’s market value.

Rising fuel and labor costs are eating into profit margins across the industry, and low-cost competitors are making it difficult for airlines to increase fares. From investors’ perspective, this unexpected pay raise was simply not justified and raised the risk of an industry-wide wage war. So was American’s punishment fair?

Missing the Talent Connection

After the announcement, Citigroup analyst Kevin Crissey wrote in a note to clients: “This is frustrating. Labor is being paid first again. Shareholders get leftovers.” Of course, this simply is not true. As Los Angeles Times reporter Michael Hiltzik observed, “From 2014-2016, American Airlines authorized $9 billion in share buybacks, money that went directly into shareholders’ pockets… By contrast, the pay raises will cost American $1 billion over three years.” It is however, still too common for investors to view payments to employees as a zero-sum loss to shareholder value.

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The Pros and Cons of Ditching the Gig Economy

The Pros and Cons of Ditching the Gig Economy

The gig economy is an attractive business model for many startups, as well as for the venture capitalists who back them, because independent contractors are typically cheaper to hire and impose fewer obligations on a business than full employees. Some startups, however, have opted out of the gig model, because they find the benefits of full-time employees outweigh the downsides. At Backchannel on Friday, Miranda Katz took a closer look at the startups “that began with 1099 contractors have taken the risky step of converting their workforces to employees — taking on as much as 30 percent more in payroll costs in exchange for legal peace of mind and a trainable workforce”:

Instacart, for example, began offering a full-employee option to workers in 2015, after being served with its first misclassification lawsuit; W2 “shoppers” now comprise about 20 percent of Instacart’s workforce. … In a flurry of announcements over the summer of 2015, several other companies started revamping their workforces entirely. Shyp made the switch that July, citing the desire to be able to train its couriers and provide them with more supervision; it was followed by companies including Luxe (valet parking), Eden (tech support), and Sprig (food delivery), all of which appeared to come to the collective, sudden realization that they needed more control over their workforces. Most of these startups avoided directly calling out misclassification lawsuits as their motivation for making the switch—but given the timing, the rush to change seemed far from a coincidence. …

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Wendy’s Embraces Automation with More Self-Service Kiosks

Wendy’s Embraces Automation with More Self-Service Kiosks

Wendy’s, which began installing self-service ordering kiosks at its restaurants last year, plans to add them to over 1,000 stores this year, the Los Angeles Times’ Shan Li reported this week:

At Wendy’s, Chief Information Officer David Trimm said that customers and franchisees have taken a liking to the kiosks. “You will see customers deliberately going to those kiosks directly, bypassing lines,” Trimm said during the company’s investor day Feb. 16. “Some customers clearly prefer to use the kiosks.”

There’s “a huge amount” of demand among franchisees, who will shell out about $15,000 for three kiosks, Trimm said. Wendy’s has estimated that the cost will be recouped in less than two years, he said.

Automated ordering is also a way to help cut labor costs in the face of rising minimum wages throughout the US, ostensibly supporting the argument often made by critics of the minimum wage that these hikes merely encourage employers to automate low-wage roles:

In the long term, many chains are looking toward kiosks as a way to reduce their employee headcount, especially as wages rise. … For Wendy’s, kiosks are part of an overall move into automation that could cut labor costs, said Robert Wright, chief operations officer. He called 2016 a “tough” year, with wages rising 5% compared with 2015.

Yet Greg Miller at Wall Street Daily argues that focusing on minimum wage increases as the cause of this trend is misguided—these jobs are getting automated regardless:

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Why Robots Aren’t Taking Over Restaurants Just Yet

Why Robots Aren’t Taking Over Restaurants Just Yet

In response to years of pressure from labor unions and other activists, a growing number of US cities and states have embraced a $15 per hour minimum wage, and some large employers have followed suit, imposing internal wage floors to show that they share the public’s concern over income inequality and the financial hardships of low-income Americans. Critics of minimum wage hikes have long maintained that they destroy jobs in low-skill fields like retail and food service, especially at a time when employers have the option of automating many of the roles traditionally filled by unskilled employees.

Customer service robots are already appearing on the floors of large retail establishments, but restaurants have proven more resistant to automation, even in the face of rising labor costs. Reuters‘ Lisa Baertlein and Peter Henderson explore some new research showing that minimum wage hikes haven’t displaced many restaurant workers after all:

In spite of improvements in technology, minimum wage hikes between 2000 and 2008 caused little immediate displacement of workers by technology, especially in kitchens, according to a study by economists at the Federal Reserve Bank of Chicago and DePaul University. There were slightly more workers per restaurant in 2015 than in 2001, according to data compiled for Reuters by the National Restaurant Association, which opposes minimum wage hikes. And the U.S. Bureau of Labor Statistics has projected leisure industry jobs, a broad category that includes restaurants, will grow at 0.6 percent annually, keeping pace with the national average through 2024.

Why isn’t automation happening as quickly in this sector as it is in so many others? Quite simply, robots aren’t very good at this kind of work, at least not yet:

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