Employee Turnover in Starbucks Hastings St. Vancouver

2637 words (11 pages) Business Assignment

20th Apr 2020 Business Assignment Reference this

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I have investigated the status of employee turnover in Starbucks Vancouver from the standpoint of useful theories. I implemented the study by first identifying the most useful concepts that can guide my study. After which I conducted an interview among the Hastings St. Vancouver Starbucks employees to find out the causes why some employees have left the Starbucks Hastings St. Vancouver. Through the inquiry I discovered that, contrary to my expectations, employee turnover is relatively low in the Hastings St. Vancouver Starbucks. Nevertheless, reforms can still be implemented to promote higher employee turnover. Raising employee wages is not always possible. Thus, it is important to know that non-wage benefits can substitute for wage increases and they are good in promoting lower turnover among employees. In the study, I initially work on the concepts of work-life balance and work environment in improving employee retention and reducing employee turnover in the Starbucks store. However, on analysing data and Starbucks employee suggestions, I found that the other concepts that are also powerful in promoting retention and reducing employee turnover are incentive design and enhancing company prestige. Based on the experience of the Starbucks shop in Vancouver, incentives for employees can be designed in a manner that can promote retention or reduce turnover. Similarly, if the company is prestigious or working with the company is associated with prestige, the company’s prestige will promote retention and reduce turnover as association with the company will also enhance the prestige standing of employees.

I. Introduction

In informal meetings with the Starbucks employees, I was informed that employee turnover is reportedly high in Starbucks Hastings St. Vancouver. I wish to confirm whether this is true by comparing current Starbucks employee turnover with similar establishments in the vicinity. By comparing current employee turnover in Starbucks with the employee turnover in similar establishment of Vancouver, inquiring employees of the reasons why their colleagues have moved out of Starbucks and identifying what measures can be employed to promote employee commitment to Starbucks Hasting St. Vancouver, I had anticipated that my study will be beneficial to both the Starbucks management and employees.

II. Research problem

Starbucks employees have been claiming that employee turnover has been reportedly high in the last 10 years. This situation may be representing a deeper problem in Starbucks considering that its wage rates are among the highest in the industry or at least it is our impression that compensation rates in Starbucks are among the highest in the industry. It is important to find out what has been causing the large employee turnover so management can act. Before anything else, however, it is important to confirm, whether employee turnover is indeed relatively high in Starbucks Vancouver compared to similar establishments in the vicinity. Once it is confirmed or not confirmed,

it is important to proceed to find out what has been causing the apparently fast employees turnover and consult the employees on what non-wage and non-benefit measures can be given so that Starbucks must continue to be competitive in the industry.

III. Target audience

A. Primary target audience

The target primary audiences for this report are the management and supervisory employees of Starbucks management. The report can provide important inputs on the appropriate managerial policies that can be formulated as well as the appropriate instructions that must be communicated to and received by the supervisors.

B. Secondary target audience

The target secondary audience consist of the rank and file of Starbucks employees. The communication of the results of the report will be useful in communicating to the rank and file the sincerity of Starbucks management to address Starbucks employee grievances as well as the Starbucks’ interests to protect and enhance the welfare of the Starbucks employees.

IV. Scope

My report covered the status of employee turnover in Starbucks Vancouver for the last 3 years and compare the results with establishments of similar size and business involvement in the vicinity of Vancouver. In addition, my report touched on the reasons why employees have left the company from the perspective of their co-employees who

are currently staying in Starbucks Vancouver given that it may no longer be possible to locate the former employees of the company. Finally, my report would also touch on the employees’ recommendations on how employee turnover can be reduced through non-wage and non-benefits means, given that the competitiveness of Starbucks Vancouver versus her competitors should be maintained. The coverage of my study is relatively simple. It seeks to address nine groups of questions.

  1. What concepts are most useful in studying employee turnover?
  2. What is the status of employee turnover in the last 3 years? How many employees left per year given total number of employees per year in the last 3 years?
  3. Find out the data for the set of questions in number 1 for establishments of similar size and nature in Vancouver. Use at least three cases. Is employee turnover in Starbucks relatively high or is it within the normal range in the industry given 3 cases?
  4. How do we compare the average wage of Starbucks Vancouver employees versus the employees of similar size and nature in Vancouver?
  5. What are the usual reasons for Starbucks Vancouver employees to leave their jobs?
  6. What are the employees’ recommendations to promote retention or company loyalty among Starbucks Vancouver employees?
  7. What recommendations can be implemented to reduce employee turnover from the perspective of improving work-life balance?
  8. What recommendations can be implemented to reduce employee turnover from the perspective of improving the work environment?
  9. What other measures can be used to address fast employee turnover in Starbucks?

V. Research implementation and discussion

I used interviews and focused group discussions to derive data to address the research questions I have formulated. I consolidated the write-up for the 9 research questions into 7 topics.

1. Concepts most useful in studying employee turnover

Based on a quick review of literature that I have conducted, the most relevant concepts useful for my study are the concepts of turnover, retention, work-life balance, and work environment (Kossivi et al., 2016; Aguenza and Som, 2012; and Kaur, 2017). The concept of turnover describes how fast or what proportion of employees resigns from work during a period. In contrast, the concept of retention refers to the proportion of employees who are retained during the period. Both measures describe how labor employees persist or remain with the work organisation within a given period. Work-life balance refers to a situation in which work does not interfere with aspects of life—living with the family, having fun, having adequate rest, intellectual growth, advancement and the other aspects of life. It is believed that as work becomes less of an obstacle to the other aspects of life which makes life worth living, there is a greater retention in a job (Suifan et al., 2018). Finally, work environment refers to the condition of work covering

even the temperature, working conditions, and all the other aspects of work. The more positive the working condition, the greater is retention in any job or the greater is employee loyalty to a job or a company (Umamahewari and Krishnan, 2016).

2. Employee turnover in last 3 years

Based on interviews and focus group discussions I have conducted with employees of a Starbucks, contrary to my expectations, employee retention is relatively high and employee turnover is relatively low in the Starbucks Vancouver that I have investigated. While employee turnover through resignation is relatively high to as much as 35% in the last 3 years in the shops in the vicinity of the Starbucks Vancouver, employee turnover in the Starbucks shop that I have focused my research has an employee turnover in the last 3 years of only around 20%. Of course, this is still relatively high but compared to the employee turnover in the vicinity, the figure is relatively low. This fact indicates that the Starbucks in Vancouver is most likely implementing a good policy that promote retention and reduce turnover in the shop.

3. Employee reasons for leaving the Vancouver Starbucks

Based on focus group discussion, there is a consensus among the respondents that I have interviewed among the Vancouver Starbucks employees that the typical reasons given by employees who left their jobs pertain to their need to have an upward mobility. Most of the employees who left their job from the Vancouver Starbucks expressed their need to study, transfer their residence after marrying themselves with someone, or change their jobs to something else that gives them a better salary. However, there is also

a small percentage who resigned from their Starbucks Vancouver jobs who cited personal differences with another employee as his or her reason for leaving his or her job.

4. Average wage of Starbucks Vancouver employees versus similar establishments

The average wage of Starbucks Vancouver employees is slightly higher than the minimum wage in Vancouver for unskilled labour. However, when asked whether this is the primary attraction of their jobs, the Starbucks Vancouver employees unanimously said no. It turned out that those who initially felt an urge to leave their Starbucks Vancouver jobs cited the dividends that Starbucks employers are giving to their employees as part of Starbucks’ work retention promotion strategy among her employees. The dividends promoted a belief among the employees of Starbucks Vancouver that Starbucks Vancouver is not only their employer, but it is also their company. Thus, in a way, if the Starbucks Vancouver survives an economic environment and becomes profitable, not only does their jobs become secure but the company they own becomes secure as well.

5. Recommendations to improve employee turnover from the perspective of improving work-life balance

Being part-owners of the company in which employees work does not make them the manager of place of work. On the question of how employee turnover can be reduced or how employee retention can be increased through the improvement of work-life balance, the Starbucks Vancouver allowing employees to manage leaves such that they can swap leaves or day-offs. In this system, employees can swap their leaves or day-offs with other employees so they can spend time with their family, engage in an endeavour of their choice, rest, study, prepare for an exam, or swap leaves or day-offs with other employees for any reason. While this is sometimes allowed in the Vancouver Starbucks which is the subject of my research, the policy is not liberally applied. The request for swap on leaves or day-offs must be management-approved and not in all cases does management approve the swap request or proposal. I interviewed management on their side on this and they responded that not all requests for swaps must be approved because employees should rest to be safe and be more efficient at work. If all requests for swap on leaves and day-offs are granted, it may happen that some of the employees will be working too long or will have no day-off for several days.

6. Recommendations to improve employee turnover from the perspective of improving the work-environment

In addition to measures related to work-life balance, proposals related to work-environment can improve employee retention and reduce employee turnover. As expressed by the Starbucks Vancouver themselves, measures to improve the work-environment that can promote retention and reduce turnover can include measures to promote camaraderie and teamwork in the company. The employees reasoned that the more employees are friends with one another or the more that employees consider each other as friends, the more difficult it will be for employees to leave or resign from their

work. Further, camaraderie and teamwork will improve efficiency in the workplace. For example, it can improve communication between waiters and the cook. Camaraderie and teamwork can also improve how waiters serve their customers. With teamwork and camaraderie, waiters can help their fellow waiters serve their customers better.

7. Other measures to address employee turnover in Starbucks

To my surprise, the Starbucks Vancouver employees cited company prestige as an important factor that can promote retention. The Starbucks Vancouver employees argued that if working with Starbucks will be associated with prestige then working with the company will be associated with honor. For example, if working with Starbucks would have a prestige rating equivalent to a white-collar job then retention in the job is promoted and turnover can be reduced. Moreover, I reflected on what Starbucks program to distribute stock certificates to its employees really constitute. I interpret the management program as a program of incentive design. Handing cash bonuses is helpful, but if at least some of the cash bonuses are transformed into stock certificates, the more powerful will be the incentive in promoting retention and reducing turnover.

VI. Conclusion

I interpret my research experience in Vancouver Starbucks as a discovery or a re-discovery of this research insight: What can promote retention and reduce turnover are not only measures related to work-life balance and work environment but also company prestige and an intelligent design of incentives such that employee behavior is aligned to what will serve the company best.

References

  • Aguenza, B. and Som, A. (2012). Motivational factors of employee retention. International Journal of Advances in Management and Economics. Retrieved 8 June 2019 from https://www.managementjournal.info/index.php/IJAME/article/viewFile/233/222
  • Kaur, R. (2017). Employee retention models and factors affecting employees retention in IT companies. International Journal of Business Administration and Management, 7 (1), 161-174. Retrieved 8 June 2019 from https://www.ripublication.com/ijbamspl17/ijbamv7n2spl_15.pdf
  • Kossivi, B., Xu, M. and Kalgora, B. (2016). Study on determining factors of employee retention. Open Journal of Social Sciences, 2016, 4, 261-268. Retrieved 8 June 2019 from https://file.scirp.org/pdf/JSS_2016053009190527.pdf
  • Suifan, T., Abdallah, A. and Diab, Hannah. The influence of work life balance on turonvoer retention. European Journal of Business and Management, 8 (20), 126-139. Retrieved 17 June 2018 from https://pdfs.semanticscholar.org/d6b0/9ffd90f45969c46f1645aa79ee3f7fdb6bb7.pdf
  • Umamahewari, S. and Krishnan, J. (2016). Work force retention and role of work environment, organization, commitment, supervisor support and training & development. Journal of Industrial Engineering and Management, 9 (3), 612-633. Retrieved 17 June 2018 from https://www.anzam.org/wp-content/uploads/pdf-manager/1393_PAULL_MEGAN-271.PDF

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