Starbucks pledges to have 30% of corporate workforce identify as a minority by 2025

Scott Mlyn | CNBC

Starbucks said Wednesday it is starting a mentorship program, hiring outreach workers for its cafes and tying team diversity to executive compensation as part of its broader plan to step up its commitment to inclusion and become a more diverse company.

By 2025, it’s aiming to have employees who identify as Black, Indigenous or people of color make up at least 30% of workers at all corporate levels, from managers to senior executives. The company will be setting annual targets based on retention rates.

“We hope that we can influence other companies to follow our leadership or join in as well,” said Chief Operating Officer Roz Brewer.

This summer’s protests against racial inequality and police brutality, sparked by the deaths of George Floyd and Breonna Taylor, pushed Corporate America to review its shortcomings under scrutiny from consumers and activists. But Starbucks’ reckoning with racial bias began earlier.

More than two years ago, the company closed down all of its U.S. company-owned cafes for a day of training aimed at stamping out racial bias.

A month earlier, at a Philadelphia location, police arrested two Black men who were waiting for a business meeting to start before ordering anything. One of the men, Rashon Nelson, said he asked to use the restroom immediately after walking into the Starbucks. But he said he was told it was for paying customers only. A video of the incident went viral on social media, leading to boycotts and an internal reassessment of the company’s policies.

In the wake of the incident and backlash, Starbucks also commissioned an independent civil rights assessment. Last year, the company hired Nzinga Shaw as its first global chief inclusion and diversity officer.

Among the changes soon coming to Starbucks are a mentorship program aimed at connecting employees who are Black, Indigenous or people of color with senior leaders. In 2019, just 15% of Starbucks’ senior leadership were people of color. About 46% of its overall workforce identifies as a minority.

“I don’t think ever before that we’ve been that intentional,” Brewer said.

Starbucks also plans to partner with professional organizations that focus on developing minority leaders.

Furthermore, the inclusivity and diversity of teams are now tied to executive compensation. The company plans to establish an executive council to help integrate inclusion and diversity throughout the company and will join the Board Diversity Action Alliance, which includes companies like Macy’s and Dow.

All of these changes are meant to advance the diversity of Starbucks’ workforce. Beyond having people of color represent 30% of corporate employees at all levels, the company is also aiming to have them occupy at least 40% of retail and manufacturing jobs at all levels by 2025. While about 47% of those overall workers identify as a minority, the company falls short of the target moving up the hierarchy to store managers or regional directors.

Starbucks said it will publicly share data reflecting the diversity of its workforce. Brewer said it would share three years of EEO-1 reports, a federally mandated survey about the makeup of a company’s workforce.

“We want to be transparent and also intentional about the work that we have to do to improve upon some of these numbers,” Brewer said.

At its cafes, Starbucks plans to hire outreach workers. In 2018, as a result of the Philadelphia arrests, the company modified its policy to allow anyone to sit in its cafes. But the policy has also placed more pressure on baristas, who may not be equipped to handle people without housing or those struggling with substance abuse. The new employees are meant to reduce intervention from law enforcement.

“This kind of outreach further ensures that Starbucks locations are welcoming places for all,” CEO Kevin Johnson wrote in a letter to employees.

Starbucks’ foundation is also chipping in $1.5 million in neighborhood grants and $5 million on an initiative to support nonprofits that serve minority youths.

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