Should Starbucks Have Asked Us to #RaceTogether?

Last week, Starbucks introduced their now infamous Race Together campaign. Tom Schultz, Chairman and CEO of the beverage goliath, started the initiative and announced it at an internal company meeting. Starbucks then broadcasted it to the public on their website. The campaign encourages baristas to write "Race Together" on customers' cups in order to "start a discussion about race in America." Starbucks emphasized that the decision to engage was voluntary and should not prohibit timely customer service.

Starbucks claimed that the campaign started with "one voice," that of Schultz, who "didn't remain a silent bystander." The Starbucks patriarch has not been shy in the past about taking a stand on public issues. In 2013, he asked that no customers bring firearms into the stores; that same year when an investor complained about Starbucks supporting a bill that would legalize same-sex marriage in Washington State, Schultz advised the investor to sell his shares and invest somewhere else.

This move to insert himself and Starbucks into an intractable public debate has garnered Schultz and his company a storm of public backlash. Most critics are baffled at the initiative, asking how Schultz expected this campaign to play out. Did he really imagine that customers in a hurry for their cup of morning Joe would be open to discussing race relations with their barista? Skeptics also object to the idea that conversations about race should be discussed at the behest of your CEO or your boss, who you have to make happy in order to pay rent and buy groceries.

Starbucks itself claimed that they wanted to start dialogue between people about race in response to the "racial unrest from Ferguson, Missouri to New York to Oakland." If the instigating factors for the initiative were incidents like Ferguson, critics claim that Starbucks is focusing on trying to get everyone to just get along and glossing over the real problem of a myriad of societal institutions and systems that create inequality for racial minorities.

Some applaud Schultz and Starbucks for a bold attempt at tackling an important issue, even if the execution of the campaign was not perfect. Kareem Abdul-Jabbar, former NBA champion and minority-rights advocate, praised the campaign as a "bold decision" but said that Schultz chose "the wrong venue with the wrong audience and the wrong spokespersons." Starbucks may be forced to agree as they ended the cup-writing campaign seven days later. A company spokesperson said that the phase-out is not a reaction to the backlash, but a scheduled transition into the next phase of the #RaceTogether plan: a commitment to hire 10,000 disadvantaged youth within the next three years.

The difference between many of Schultz's past insertions into public issues and the #RaceTogether campaign is that Schultz put the onus of the initiative on employees, many of whom may not have wanted to take part or felt uncomfortable having their personal experiences being discussed and debated around them. A senior vice president of Starbucks blocked users asking about the campaign and then deleted his personal Twitter account after he encountered backlash. This of course only fueled outrage as critics pointed out the irony of asking employees to start a conversation on race, while a high-power executive was unwilling to engage in the topic himself.

Schultz asked his front-line employees to take on his own voice and the voice of the company as a whole and created an uneven power dynamic. Baristas were being asked by their boss to participate in a campaign that involved them engaging with the customers they are obliged to make happy, on a very sensitive topic. As the CEO of a globally recognized corporation, Schultz has a platform to speak out on public issues and even advocate for social change. The problem arises when Schultz asks his employees to do the talking for him.

Readers, do you think that Starbucks got it wrong or right with #RaceTogether? Should companies try and insert themselves into public issues?

Spring Cleaning Your Management Style

The First Day of Spring will (hopefully!) usher in the end of being trapped inside on snow days. The welcome change of weather will prompt many people to start scouring through their closets, garages, and attics to clean the darkest nooks and crannies of their homes. They'll search through the mess and clutter and decide what should be kept and what should be tossed.

Managers should also use this season of renewal to spring clean their own management style by assessing which habits should be kept and which should be discarded. By sifting through practices that may have been forgotten or neglected, managers can determine with a critical eye whether the habit is worth keeping or needs to be tossed in the trash.

Toss: Conducting a once-a-year performance review.
Keep: Giving consistent feedback to your employees.

Squeezing a year's worth of work and growth into one annual performance is a habit that needs to be dumped. Instead, give informal but regular feedback to your direct reports (TradePost, 12/11/14). Meet with your team members individually, ask questions, and offer advice where needed. Most important, make feedback a two-way dialogue that occurs regularly, not a one-way review that keeps employees in the dark about their work and performance.

Toss: Thinking that motivation is all about money.
Keep: Praising and rewarding employees.

Engaged employees who are truly invested in the team and the company are not just working for the money. Yes – compensating employees fairly is an important baseline for happy workers, but motivation is not all about money. A host of other factors contribute to employee engagement: recognition, appreciation, a purpose at work, flexible schedules, and a cohesive work team are just as motivating, if not more than, pay. Toss the tendency to focus on money and instead make sure to praise your team members as often as possible and reward them in unique ways that don't require bonuses (TradePost, 12/18/14).

Toss: Micromanaging your employees' process.
Keep: Monitoring the results they produce.

Scrub away the habit of looking over your employees' shoulders. Micro-managing will only stress out your team members and create an environment of distrust. When possible, let your employees have autonomy in their duties, make decisions, and determine their own process. Maintain accountability by monitoring results and consistently discussing the methods that work and those that did not and mutually agreeing on any needed changes in the future.

Toss: Avoiding discussions on poor performance or bad behaviors.
Keep: Setting clear expectations.

Discard the tendency to avoid a potentially awkward performance discussion. Some employees simply are not performing up to standards, and although you may dread the conversation, it is your job to have it. If you have team members who don't meet deadlines, sport a snotty attitude, or turn in work that is not acceptable, then it's time to give your employees feedback they may not want to hear (TradePost, 8/7/14). If you don't address the behavior, the situation can't improve and might just get worse. Continue to set clear performance expectations with all of your team members, whether new hires or long-term staff. An employee not meeting standards may not even know that they're under-performing if they haven't been given a clear outline of what's expected of them (TradePost, 3/6/14). Without clear expectations, there can be no accountability for behaviors or actions.

Managers, which of your habits could use some spring cleaning? Comment and let us know.

Still Working at 100? Not Going to Happen.

The common vision for retirement used to be plenty of leisure time spent perfecting your golf swing or visiting your grandkids. For many Baby Boomers, retirement may mean not retiring at all but continuing to work well past their 50s and into their 60s and even 70s. The Wall Street Journal has even speculated whether retiring at 100 could be the new normal, and the AARP told a picturesque tale about a 70-year-old woman who came back to the workforce as an HR Director.

However, stories like these may be painting too pretty a picture. Some 53% of workers over 60 are putting off retirement, and 75% of these say that they are staying in the workforce because their finances have yet to recover from the 2008 downturn -- not because they're afraid of getting bored or not knowing what to do with unlimited leisure time. Some 12% of older workers don't think they'll ever be able to retire (Fortune, 2/18/2015). Delayed retirement is less a choice to continue to be engaged in meaningful work and more a necessity to remain solvent and avoid personal financial collapse.

Although the average retirement age has increased over the years, the average age for men has held steady at 64 since 2008, which is not a large leap from the average age of 62 in 1985 (Market Watch, 2/18/2015). Most Baby Boomers are not continuing to work past the average retirement age; only about one third of Baby Boomers over 67 are engaged in the workforce in some capacity (Gallup, 1/26/2015). Those that do continue to work do so out of financial desperation. Near-retirees over 55 years of age, on average, have about $165,000 in their defined-contribution plans (Fidelity, 2/13/2014). And those estimates are optimistic; more dire research estimates that 75% have less than $30,000 (Schwartz Center for Economic Policy Analysis, 7/3/2012). Even 401(k)s at the higher end of the spectrum will not sustain Baby Boomers through 20+ years of retirement. With pensions plans outside the public sector essentially nonexistent and average social security benefits at $1,294 per month, about $15,000 per year and not far above the poverty line (Social Security Administration, 4/2/2014), those considering retirement are finding it increasingly attractive to try and stay in the workforce.

The feeling is not always mutual for employers, however. Many companies blatantly advertise that they are looking for "young," "fresh," "energetic" employees. The tech industry especially is notorious for age discrimination, and many are unwilling to hire "graybeards." Mark Zuckerberg has claimed that "young people are just smarter," and a Santa-Clara-based IT services company recently used the phrase "We Want People with Their Best Work Ahead of Them, Not Behind Them" on their careers page (now removed). Even outside of tech, few companies are eager to higher older workers. Workers in their 50s who are looking for a job are 20% less likely than their more youthful counterparts to be hired; when they are, they earn 15-20% less than in previous jobs (CNN Money, 2/23/2013). In addition, some companies use methods to push Baby Boomers toward retirement; isolating aging workers, cutting job responsibilities or working hours, and denying promotions are all subtle ways to move out older employees.

Employers should think twice though before pushing out their older workforce, and not just to avoid a discrimination claim. When Baby Boomers exit, companies often don't understand the loss until after their tenured experts leave. Retirees take institutional knowledge, influential relationships, and honed capabilities out the door. Losing the intangible expertise of aging workers could come with a price tag of up to 20x higher than the typical hiring and recruiting costs (Harvard Business Review, 12/2/2014). Baby Boomers have maturity and knowledge that younger workers can lack, and forcing them out of the workforce if they want to keep contributing is a costly error on the part of organizations.

Retiring from the workforce may be viewed as a choice, but for many Baby Boomers, age discrimination and illness may force them into retirement and an uncertain financial future.

Readers, is delaying retirement the new normal? Comment and let us know.

February Jobs Report

February continued the trend of strong job growth. The U.S. economy added 295,000 jobs, and the unemployment rate edged down to 5.5% (Bureau of Labor Statistics, Employment Situation Summary). The number of long-term unemployed persons was essentially unchanged at 2.7 million, accounting for 31.1% of the total unemployed. Despite impressive job growth, wages continue to remain sluggish as average hourly earnings gained only 0.1% month-on-month.

In February, job growth saw the most expansion in food services ( 59,000), professional and business services ( 51,000), construction ( 29,000), and health care ( 24,000). Temporary help services saw little change from last month but was 5.2% higher than in February 2014.

The High Cost of Low Wages, Part 2

This is part 2 of our series dispelling the myth that a company's profitability depends on rock bottom pay. To read Part 1, click here.

Since the Great Recession, low pay and stagnant wage growth have been the new normal, but Walmart's announcement that it will be giving a raise to 40% of its workforce hopefully signals that earnings are set to increase. Higher wages are obviously an advantage to employees, but they also benefit the companies that employ them. Organizations that offer paltry pay could be forced to increase wages in order to stay competitive. This trend is already playing out as TJX, which owns a variety of retailers, including TJMaxx, Marshalls, and Home Goods, announced immediately after Walmart that it will raise workers' base pay to $10 by 2016.

Any company offering higher wages is not doing so out of altruism; they have competitive pay because it is profitable for their organization. Livable wages attract more talent, increase worker productivity, reduce turnover, and at the end of the day add to a company's bottom line.

When a company offers higher wages, and especially when they are early adopters of higher pay in their industry, they will attract a higher quantity and quality of applicants. Last year when Gap announced that it would raise its minimum wage to $10 an hour, the amount of applications rose 10% (Bloomberg Business, 6/24/2014). Organizations that offer higher pay are rewarded with an applicant pool that has a higher IQ and with personality scores and motivation that make them a better fit for advertised jobs (Peterson Institute for International Economics, 1/13/2015). Walmart's choice to increase wages before other major companies such as Target and McDonald's positions it to attract and retain more qualified employees from a talent pool that is becomingly increasingly competitive and desirable. The low-wage model may reduce the cost of labor but does not do any good for a company's costs overall. Currently, about 44% of Walmart's 2.2 million hourly staff turns over each year (Bloomberg Business, 2/23/2015). Finding, hiring, and training replacements even for low-wage workers costs about 16% of an employee's annual earnings, and when nearly half of your hourly workforce is jumping ship, those costs quickly add up. With falling same-store sales and two straight years of stagnant earnings, Walmart is being forced to change its business model that is no longer sustainable in a tightening job market.

Many other retailers have already mastered the lesson that Walmart and other companies are just learning. At Trader Joe's, starting pay is $40,000; employees at Costco make on average $21 per hour; and staff at The Container Store make an average of $50,000 per year (USA Today, 10/17/2014). Costco's turnover rate is 17% overall and that number plummets to 6% after one year of employment (Bloomberg Business, 2/23/2015). All of these organizations operate in a competitive marketplace and refute the idea that retailers must pay measly money in order to make profit. Their happier, more productive employees also provide better customer service and more satisfied, loyal clientele. QuikTrip, a Fortune 100 convenience store and gas station chain, pays an entry-level salary of around $40,000; it's turnover rate is 13% (compared to 59% for the top quartile of the convenience store industry), and its per square foot sales are 50% higher than the industry average (The New York Times, 3/21/2014).

It is a myth that companies, especially organizations in low-margin industries, must constrict wage growth in order to remain profitable. Especially as the economy strengthens and competition for talent increases, companies must consider offering better pay if they want a more talented workforce, more loyal customers, and a stronger bottom-line.

Readers, do you think more companies will raise wages as the economy improves? Comment and let us know!

3/23/15 Update: On March 18, Target followed Walmart's and TJX's lead and announced that the company would be raising the starting pay of its workers to $9 an hour in April and $10 an hour by 2016. The decision will affect the pay of 500,000 employees.

Walmart Raises Wages and So Should You, Part 1

Last week, Walmart announced that it would be giving a raise to 40% of its workforce. About half a million employees will see their hourly wages rise to $9.00 in the next six months and $10.00 by 2016, well above the Federal minimum wage of $7.25 an hour. The company will be spending about $1 billion dollars in increased pay and revised training and promotion programs. Recently, many companies such as Gap, Ikea, and health insurance provider Aetna Inc. have raised wages for their workers, but as the world's largest private employer, Walmart's decision to increase pay will be more closely watched and could have a larger impact.

Over the years, a job at Walmart has become synonymous with rock bottom pay. An unstable labor market and stagnant job creation made it possible for companies, including the retail giant, to consistently fill positions that had low pay and unsteady hours. In 2013, Walmart had 23,000 job applications for 600 jobs, with an acceptance rate of 2.6%; that's twice as selective as Harvard University (The Washington Post, 3/28/2014). In the years following 2008, low wages were an effective method to maximize profits. However, as an increasingly optimistic labor market continues to favor employees and job seekers, companies may no longer be able to sustain low wages.

In December, the percentage of people looking for work hit the lowest level since 2007. The economy has created more than 3 million jobs in three months; the number of available jobs posted by U.S. employers rose to the highest levels in 14 years; and job quits increased to 2.7 million, their highest level in six years, a sign of workers' confidence in the job market. Although the future of job creation looks sunny, wage growth has remained stagnant. Since 2012, pay has shrunk for people at almost all income levels with the exception of the bottom 10%, which have seen higher wage growth due to state-sponsored minimum wage increases (Economic Policy Institute, 2/19/2015). However, any increase in wages does not do much good for workers since inflation is rising faster than the price of labor. The income for a typical worker today buys fewer goods and services than in 2006 (Pay Scale, 1/12/2015).

The trend of frustratingly stagnant wage growth could start to reverse as the economy continues to improve and the labor market continues to tighten. Walmart's move to increase hourly earnings has already turned the spotlight on other retailers who offer similarly low wages, such as Target and Staples. The wage hikes have also put a spotlight on food service companies like McDonald's, which has consistently been singled out as an organization that doles out rock bottom pay. Companies that could once offer low wages may be forced to increase pay in order to stay competitive, attract talent, and reduce turnover.

Raising wages is not just an advantage to the workers it benefits; it is also a boon for the organizations that employ them. Join us next week for Part 2 of our series and learn why all companies, not just Walmart, should raise their wages.the Benefits of Raising Wages.

Readers, do you think that companies should increase worker pay? Why or why not? Comment and let us know!

Winning the Oscars of Business

This Sunday, actors, directors, and all sorts of other Hollywood stars will walk the red carpet and cross their fingers hoping that their name will be called when they hear, "And the Oscar goes to..."

Winning an Academy Award is the highest accolade given to those in the world of film. An Oscar validates the most memorable ideas stories and challenging performances in movies for the year. The Academy Awards can also offer lessons about what it takes to create something special and impressive in business. If your organization could win the Oscars of business, you would have all of the necessary components to produce a blockbuster company.

Best Actor/Actress
Actors and actresses are the face of a film; Oscar-nominated movies are immediately associated with their star performer. Great ones are willing to invest time, effort, and talent into their performances. Actors also evangelize for their film, touring and attending press events. Just like actors, your employees are the face of your company and the ones who should be advocates for your business. A half-hearted performance can ruin a film, and employees that lack passion or commitment will cause a company to wither.

Best Supporting Actor/Actress
Often, the stars of a movie are heralded above all others involved with the project; however, a film cannot typically stand alone on one great performance. Without the dedication of supporting actors and actresses, the efforts of the stars wouldn't matter. Similarly, employees who support starring team members like sales people, executives, or other staff in the spotlight should not be neglected or forgotten. Without the supporting staff, the essential operations and work in the background would go undone and the company would unravel.

Best Original Screenplay
This award honors the new ideas that come to life on the screen. By recognizing films that are based off of wholly original content, the Academy Awards encourages new ideas and innovation. Businesses should also ensure that those who are inspired by new thoughts, initiatives, or projects should be given the space to pursue them. By embracing and rewarding original work, companies will inspire innovation and consistently evolve into more efficient, productive, and creative organizations.

Best Director
In their acceptance speeches, actors and actresses always thank their directors for pushing, guiding, and motivating them to do their best work. Directors create and communicate a vision and strategy for producing an extraordinary film. The management of a company should function just like directors, inspiring their team with a vision of success and leading them in their efforts to always make sure that they are performing their best.

Best Picture
Finally, just as having a compelling story, dedicated actors and actresses, and a motivating director makes an award-winning movie, all of these elements also create a business that is Oscar worthy. The Best Picture award is granted to the film that has the strongest showing in all of these categories, and if you want your business to win this prestigious accolade, then the organization will need to shine in all of these areas.

Readers, will you be watching the Academy Awards this Sunday? Would your company win the Oscars of business? Comment and let us know!

Speaking Your Employees’ Love Language

Millions of people will exchange extravagant bouquets, boxes of chocolates, expensive jewelry, and cheesy greeting cards for Valentine's Day. Although romance and Cupid should stay well away from the employee-boss relationship, managers can show their staff love now (or any time of the year) by learning to speak their employees' love language.

Your team might feel their job is similar to a romantic relationship: they experience some of their best and worst times in the workplace, they've made a commitment to invest in their career and the company, and making business relationships work can take just as much time and energy as romantic ones. Speaking your employees' love language and understanding how they want to be appreciated is essential to creating lasting, fruitful relationships with your staff.

In a romantic relationship, you can't intuitively know how the other person likes to receive love or what makes them feel most appreciated. The same is true with your employees: you won't automatically know how your employees prefer to receive feedback and acknowledgement. One of your team members may prefer a gift or award, while another will want kind words or a gesture of appreciation. One person might love an announcement of their success in front of their peers while someone else would dread the thought of having the spotlight focused on them. Any romance expert will tell you that to make a relationship work, you should always ask questions and listen more than you speak; the same is true for managers with their employees. Try some of these leading questions to find out how your employees prefer to feel the love:

    1. "When you've accomplished something, how do you like to be recognized for it?"

    2. "How often do you like to gain feedback and acknowledgement of your work to feel that you're being given the credit you deserve?"

    3. "How can I show you that I trust you and appreciate your work by letting you take on new projects and opportunities for growth without overwhelming you in your work load?"

    4. "What more could I do as your manager to make you feel more appreciated?"

    5. "How could we as a team do a better job of recognizing each other?"

    6. "What could our company do better as a whole to acknowledge employees?"

Discovering your employees' love language, however, is just the first step in truly speaking it. Next, you need to act on that knowledge and start to show your employees love in the way they most want to be appreciated. Make sure to also make your praise and appreciation specific to your employee. If a team member appreciates small gifts, make sure it's something they actually want. If they prefer words of kindness, make sure they are particular to the situation and success. Managers who speak the love language of their employees will have happier, more engaged, and more effective teams.

Readers, what is your workplace love language? Comment and let us know!

January Jobs Report

The U.S. economy continued to show strength in the first month of 2015; 257,000 jobs were added, and although the unemployment rate ticked up slightly to 5.7%, analysts estimate that the increase was due to more people looking for work in an optimistic job market (Bureau of Labor Statistics, Employment Situation Summary). The number of long-term unemployed persons was essentially unchanged at 2.8 million, accounting for 31.5% of the total unemployed. Hourly earnings also grew by 0.5%, the highest monthly wage growth since late 2008.

In January, job growth saw the most expansion in retail trade (+46,000), construction (+39,000), health care (+38,000), and finance (+26,000). Temporary help services saw little change from last month but was 6.7% higher than in January of 2014.

Should Employers Mandate Vaccinations?

Disneyland may be the "happiest place on earth," but it also one of the worst locations for a measles outbreak, as occurred a few weeks ago. There are now more than 100 cases in six states (plus Mexico) that have been traced back to the outbreak in California. This is not the first resurgence of diseases normally avoided through vaccination: New York had a measles outbreak in early 2014, and Massachusetts and California both had bouts of whooping cough near the end of the year. California's outbreak was the highest in seven decades.

Diseases like measles and whooping cough, once essentially eradicated in the United States, have resurfaced in the last few years as people increasingly choose not to vaccinate themselves or their children. In 2014, the measles and whooping cough cases in the United States rose to their highest levels in over 20 years (CDC, 5/29/14, 8/27/14). One in 10 parents choose not to vaccinate their children (Washington Post, 6/26/2014), and vaccination rates have decreased in pockets around the country. In the Santa Monica, Malibu, and Orange County neighborhoods of California, 10-15% of kindergartners are unvaccinated (CBS, 9/27/2014). When more than 8 percent of a population is not immunized, herd immunity is weakened and the disease can quickly spread. As more people choose to forgo vaccinations and these types of outbreaks continue to increase, Disneyland and other employers face the question of whether they should – or can – require employees to get vaccinated.

Most industries (with the exception of health care), including tourism, aviation, and hospitality where staff frequently encounter contagious people, do not mandate immunization. Disney has stated it will not require workers to receive routine inoculations as a condition of employment. Instead, Disney and most other companies encourage their employees to verify if they've been inoculated and, if not, offer tests and shots. The Disney employees who have not been vaccinated or could not prove their immunity status through a blood test have been put on paid leave.

Hospitals and health care facilities are a different story. States have varying laws surrounding the immunization of hospital workers; 19 have regulations requiring the MMR (Measles, Mumps, Rubella) and influenza vaccine for hospital workers. But often the policy is left up to individual hospitals. Seattle's Virginia Mason hospital was the first to require that hospital workers receive a flu shot in 2005. Kennedy Health in New Jersey recently mandated that all employees receive the flu shot unless an exemption was granted for religious or medical reasons. Nurses at the Tacoma General and Good Samaritan Hospital in Washington are suing MultiCare, which operates both facilities, for mandating the influenza vaccine. The union representing the nurses is suing based on the grounds that nurses who do not comply could be terminated.

Even inquiring about vaccination status can be tricky for employers. The Americans with Disabilities Act and the Civil Rights Act prohibit employment discrimination based on medical or religious status. Asking about whether an employee is inoculated could reveal both: some people are unable to get vaccinated due to allergies, medical conditions, or being immunocompromised, while others refuse vaccinations based on religious reasons. Mandatory vaccinations in the workplace contrast individual choice against wider public safety. Critics worry that requiring vaccinations can lead to medical and/or religious employment discrimination. However, advocates cite that a person's choice to remain unvaccinated is not restrained to the individual; the choice increases the community's chance of contracting preventable diseases, especially among vulnerable groups such as the young, the elderly, and the immunocompromised.

Readers, do you think that employers should be able to make employees get vaccinations? Comment and let us know!

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