Let’s not beat around the bush. Global coffee chain Starbucks has had problems with tax avoidance in the UK. Meeting Lisa Robbins, its UK HRD at its European HQ in Chiswick is a visible reminder of this. The leafy business park has been home to the pumpkin latte purveyor for less than two years, thanks to it relocating from Amsterdam – a move that was largely seen as a response to public and political outcry in 2012, when it was first revealed that despite sales in the preceding decade hitting a very frothy £3 billion, the British coffee arm had never ‘officially’ made a bean in profit.
Meeting HR magazine in the same week Apple was rapped by the EU for its tax arrangements, and on the same day Austrian chancellor Christian Kern asserted that Starbucks and fellow pantomime villains Facebook and Google paid less tax than Bavarian sausage stalls, it’s clear this is an issue Robbins knows hangs heavily over the company.
But, while she accepts tax is how many still want to define the business, she feels it’s about time people got to know the other, less well-known side to Starbucks – its people policies.
“The moral compass has moved on,” she says in her only reference to this thorny topic. “But there’s a massive, and much more positive story that we want to tell – one that I’m really passionate about.”
To be fair to her, there really is much more to Starbucks than its accounts. It’s far less reported, for example, that since April Starbucks has committed to paying all its staff (including apprentices and those under 25) the National Living Wage; that new higher-level apprenticeships will soon be introduced; and that an innovative employee help scheme (‘Home Sweet Loan’) was set up over the summer to help workers get a deposit for a flat by being able to borrow a month’s pay upfront. (So far 24 members of staff have made use of it.) But perhaps most of all is this HRD’s clear and very honest desire to re-brand Starbucks as an employer where partners (if they want it) can develop a long-lasting and fulfilling career.
“Of all the things I want to do, it’s to change the perception that Starbucks is a place where people work as a student job, or as a stop-gap to something else,” says Robbins, who joined the business in 2013. “We don’t have a problem getting applicants to join us, but we want much more of them to stay and develop with us.”
Just talking about this makes Robbins visibly animated. “I’ll never forget talking to the mother of Anthony – now a store manager at our Earls Court branch,” she reminisces. “A few years ago he was at our Level 3 apprenticeship ‘graduation ceremony’. He was 18, and that day he told his mum he no longer wanted to go to university. She immediately marched over to me, almost in tears, saying she was absolutely not happy about this. But today she couldn’t be more proud.”
Robbins continues: “She now recognises the confidence he’s gained, while we’ve also seen him add terrific value to the business. You have to remember this is someone who – at just 21 – is handling a multi-million pound store, with upwards of 15 staff. How many other 21-year-olds would get to do this? Changing the perception of what we can offer is the thing I’m most passionate about.”
This passion has seen Starbucks start working with apprenticeship website NotGoingToUni, launch recruitment sessions at schools and colleges – Robbins accepts getting the employer brand right is still about promoting Starbucks to schools and parents who are often only thinking about further education –, and creating partnerships with youth organisations such as HeadStart – where it will guarantee giving anyone who volunteers in their community a job interview.
Given that more than half of its over 10,000 staff are under 25, and there are still ambitions to grow store numbers, business continuity alone might be the obvious reason for these initiatives. But Robbins seems much more focused than this and describes the challenge as her “nut to crack”. The sense is that this is the real legacy she wants to create.
“For us apprenticeships [Level 2-5] really have been our way of turning the dial – giving rigour and professionalism to roles,” she says. “We have 1,800 apprentices now. We absolutely know it helps attraction, and we also know it aids retention – some 80% of apprentices complete their courses. This is very high for the sector we’re in. Higher apprenticeships will launch this month in areas like finance, IT and HR. Although there’s just four at the moment, the aim is to observe and then hopefully grow these numbers in the future.” She adds: “Staff really can see that if they put in the effort they can go far. Our first apprenticeships started in 2012, but now is a great time to be at Starbucks because the first cohorts are now going into management, and colleagues can see this and be inspired by it.”
Passion for staff development comes as no accident. Most recently Robbins was head of British Gas Academies (the firm’s L&D function for engineers), and in a 20-year career at Sainsbury’s she was its training delivery manager and also looked after its contact centres. But she has passion with shrewdness too. “I deliberately had 12 roles in 21 years at Sainsbury’s,” she confesses. “L&D has been a clear thread, but I’d also say HR has been interspersed between doing business roles – such as leading customer service response and organisational design. I consciously decided I needed to come out of HR so I didn’t purely grow in the HR function. To have credibility you need to know the business. I think I bring HR specialism, but with a business lens.”
Skills outside pure HR are particularly useful in Starbucks. Another aspect that arguably isn’t widely known is that the coffee giant actually comprises a mixture of different business types. Around equal thirds of stores are either Starbucks-owned, franchised out, or licensed (as is typically the case with branches at train stations), so not all Starbucks employees are her direct responsibility. It means that in her role significant diplomacy and influence are needed.
“Separate businesses run their own franchised stores – some have as few as a couple of stores, others have as many as 60,” says Robbins. “These companies often have their own existing HR departments, so we tend to leave the running of these businesses alone. We train their managers, their management team, and also their baristas, but once they’re deemed to be up to speed – or as we call it ‘self sufficient’ – we leave them alone. The HR model is small field teams of HR partners, and the overall function at head office.”
Eventually Robbins says she wants to move to what she describes as much more “light touch” HR, although at the moment the set-up is such that it means franchised stores are actually under no obligation to follow central policies like – for instance – paying the National Living Wage to all staff. As such, it’s up to her and her team to educate franchisees and their own HR departments of the benefits that this will bring them. “We can’t dictate or enforce certain HR policies, like the National Living Wage,” she confirms. “What we will do is choose very carefully who our business partners will be in the first place. We’ll also be very clear on what our mission and values need to be.”
Despite the potential for lots of different HR policies being followed, in reality Robbins says branches fall into line. “There hasn’t been a single store that has decided to only pay the National Living Wage to over 25s. I put this down to the hard work of my HR team,” she says.
By focusing on what her employees tell her they really need (‘Home Sweet Loan’ was created precisely because housing costs were one of the biggest issues for partners) Robbins says she’s now being rewarded with growing numbers of partners themselves suggesting that their friends and family apply to work at Starbucks.
And, as with the Home Sweet Loan scheme, the ability to help staff clearly moves her. “It’s genuinely humbling to have been able to help partners get their first flats,” she says. “One partner recently told me how he was on the brink of resigning because he was unable to live close enough to where he worked. To have been able to make a difference and change lives is a real privilege.”
At a time when the popular narrative is to distrust big corporations it’s clear that Robbins feels very differently about her employees, and her employer. “The level of passion and enthusiasm people show is amazing,” she observes. “I might have worked at Sainsbury’s for all those years, but what I see here is something quite different. We recently started running English and maths courses for partners who need more help in these areas, and being able to offer financial awareness is another benefit we’re looking into right now. We’re working with our benefits provider AON to develop modules on how to save, or how to budget.”
But perhaps her experience at Sainsbury’s has been informative in more ways than just teaching her to get stuck into the business and not just stay in HR. For if the recent fall from grace of this once-dominant player in the supermarket sector has told her anything, it’s that big business must never forget that it’s customers who got them where they are, and it’s customers who can just as quickly take it all away again.
“Oh, I’m very much aware Starbucks ignores public opinion at its peril,” she says. “I was still at Sainsbury’s when it started losing market share, and going through its terrible troubles. I distinctly remember Justin King [CEO until 2014] telling the board that ‘we’d lost the customer’. I’ll never forget this. It’s the sort of thing that keeps you grounded. The lesson from this is that you can never be complacent – and I still think about this at Starbucks today.”
Perhaps this is Robbins’ very HR way of answering questions about the complicated business of taxation and corporate image that she doesn’t want to be drawn on so directly.
The public at large may think Starbucks still isn’t whiter than white, but maybe the message is slowing. At the end of June this year Starbucks announced it paid £8.1 million in UK corporation tax – almost as much as its total tax payments for 1998 to 2012. This follows a £20 million voluntary contribution pledged after the initial furore. Some might still say this is small fry, but Robbins gives the impression she wants to leave this chapter of the company’s history in the past, and focus on how she can continue to make things better going forward.
“I’m enjoying the challenge,” she says, still clearly wanting more. “We’re in an ever-more competitive market now so I need to concentrate even harder on talking up the needs of partners to the leadership team, and this will continue unabated.”