Starbucks challenges other companies to close gender pay gap
Starbucks has reached 100 percent pay equity for partners of all genders and races performing similar work across the U.S. and is now on a mission to help other companies do the same, Lucy Helm, Starbucks' chief partner officer, said during the company's 2018 Annual Meeting of Shareholders.
"We believe it is important to encourage others to join us in recognizing the importance of this issue, not just for our partners, but for women all around the world," Helm said in a company press release.
In the United States, women are paid an average of 80 cents on the dollar, compared to men. The gender pay gap is even greater in retail, where women make an average of 70 cents on the dollar compared to men, said Helm. It could take until 2119 for the U.S. to close the gender pay gap, and even longer worldwide, according to the American Association of University Women.
In the hope of speeding things up, Helm said Starbucks is publicly sharing the principles and tools the company used to reach this goal in the United States in the hope that other employers will join in working toward pay equity. The chain has also created a host of tools and best practices for preventing disparities — such as a calculator to objectively determine target starting pay ranges based on a candidate's experience. Raises and bonuses are also statistically analyzed before they are finalized to ensure systemic bias doesn't creep into the process.
"We tried to create tools to help us approach pay in a consistent and objective way, and remove the kind of subjectivity that can lead to pay bias," said Sara Bowen, an attorney who leads Starbucks Inclusion, Diversity, Equity and Accessibility team. "These tools affect hundreds if not thousands of pay decisions every year. This work has always been about our partners — and our commitment to create an equitable environment where everyone can flourish and be valued. This is a complicated issue, and it is not about one single moment, but about the ongoing work to make equity a reality."
Today's announcement is the result of years of analysis, innovation and commitment, Bown said. Beginning with a company-wide compensation study in 2008, Starbucks has run regular checks on partner compensation to identify and address any gaps.
Bowen said starting pay is one of the keys to this progress.
"If a woman comes into a company low, she tends to stay low. If a job candidate comes to Starbucks making 70 or 80 cents on the dollar, and we use that as the basis for her pay at Starbucks, we simply import gender inequality into our own system. Prior salary can be tainted and should not dictate how we pay our partners," she said.
Helm said the company will work toward closing the gender pay gap in company-operated markets nationwide by encouraging multinational companies to achieve global gender pay equity with the support of Billie Jean King and her Leadership Initiative, as well as other leading national women's organizations, the National Partnership for Women & Families, and the American Association of University Women.
"For companies, I think the solution is simple: Equal pay for equal work. We don't have to make it more complicated than that, and several companies have already proven that pay equity is achievable," King said. "For those seeking jobs, I would say be your authentic self and bring all of yourself to work every day. Progress is happening, even if it is moving more slowly than some of us would like. We need to stay focused and continue to advocate for what is right."
Kimberly Churches, chief executive officer of the AAUW, said it has been encouraging to see Starbucks take a leadership role on pay equity as well as other benefits for its partners.
"A lot of companies espouse values like fairness and pay equity, but those values end up framed on a wall and not always put into practice," said Churches, in response to Wednesday's announcement. "Starbucks is not only talking the talk but walking the walk, and that sets an example – not only for the retail industry, but for all employers, nationally and globally."
Kathy Calvin, president and chief executive officer of the United Nations Foundation, said it's time to change the status quo when it comes to equal pay.
"Equal pay is critical for gender equality worldwide. Starbucks has demonstrated its leadership by sending a strong signal that it's time for bold action," said Calvin. "The UN Foundation looks forward to engaging with Starbucks and other leaders – in the private and public sectors – to change policies, expectations and the status quo to reward the contributions of women and men equally. It is past time to end discrimination against women."
Helm said that Starbucks set out roughly 10 years ago to ensure women and men — of all ethnicities and races — are compensated fairly at Starbucks.
"This accomplishment is the result of years of work and commitment," she said.