Without a doubt, taking care of employees should be a number one priority for any business. Unfortunately, with the rising cost of healthcare in the US its a real challenge; especially for companies like Starbucks.

According to this article, increases in healthcare expenses cost Starbucks more annually than their raw materials!

Howard Schultz agrees that Starbucks’ generous healthcare benefits are about “doing the right thing” but also says “It’s completely non-sustainable”. Although this applies primarily to Starbucks’ US-based operations, it is worth noting.

In a 2004 A Full-Bodied Talk with Mr. Starbucks, Schultz describes healthcare as Starbucks’ biggest business challenge. He also asserts that companies who are doing the right thing end up paying for those that do not.

Starbucks’ success is in part due to its proactive, high-priority treatment of employees. Without a loyal supporting foundation, the company would not have been able to scale like it has: Starbucks maintains low employee turnover and productivity in light of its continued explosive growth.