Perks for part timers - Starbucks Corp - includes related information

Business & Health, Sept, 1996 by Alicia Ault Barnett

FOLLOW THE LEADER

Some would argue that Starbucks, with its growing caffeine kingdom, can well afford such generosity. But Moe of Montgomery Securities sees it the other way around. Starbucks is "successful because it treats employees right," he asserts.

There is a cost involved, but it pays when the firm can get someone like Heather Dimbat to stay four years and consider taking a career position, says Stallings. She agrees that not every company can offer health benefits to part-time workers, partly because the administrative hassle is more than many firms are willing to take on.

Besides, changing the attitude toward part-time workers may require a huge shift in corporate culture. For Starbucks, the direction seems to have been predestined; decades ago, in Howard Schultz's early childhood.

RELATED ARTICLE: Benefits for part timers: Few and far between

When it comes to health coverage for part-time workers, Starbucks may be in a class by itself. Few firms have been as generous as the cutting-edge java king, which picks up some of the premium cost.

To attract good part timers, employers in high-turnover service industries that typically hire them have to offer a health plan, according to Bob Croom, an Atlanta-based managing consultant for Foster Higgins. Some 37 percent of employers with 10 to 499 workers and 56 percent of those with more than 500 offered health coverage to part-time workers, according to Foster Higgins' 1995 survey--the first year it tracked part-time trends. But "very few care if their workers take it or not," says Croom, and the survey findings do not reveal how many workers take advantage of the offering.

The Washington, D.C.-based Employee Benefit Research Institute (EBRI), which tracks benefit trends, says that in 1993 (the latest year for which it has data), slightly more than half the nation's part timers had employer-sponsored health benefits. But that number is deceiving: Less than 20 percent had coverage in their own names. An estimated 40 percent of part timers are covered indirectly through a spouse's or dependent's employer, not their own.

Part-time status is the leading cause of lack of health insurance among the nation's employed, says EBRi researcher Paul Fronstin--and what nearly 60 percent of workers who were ineligible for or denied health benefits attributed it to. In 1993, he adds, 23 percent of part-time employees whose companies offered health benefits said it cost too much. And' he says, that's still true today. Firms that offer benefits typically charge part timers more than full timers because of the transitional nature of the workforce, says Ginny Olson, a principal with Towers Perrin in Atlanta--"sometimes two or three times more." Many part-time workers in service industries have one foot out the door, so employers are unwilling to give them the same benefits or subsidies as full-time workers, she says.

To keep costs reasonable, employers typically offer "bare bones" policies to part timers. But some are creatively tailoring benefits packages to keep them affordable. Paul Cromar, president of the Detroit-based National Group Consultants, which markets health policies, has been selling plans to the 3,000 members of the Michigan Restaurant Association for the past six months. He estimates that 90 percent of the 17,000 MRA workers can't get health benefits elsewhere because of their part-time status.