Starbucks perks up to outsourcing

Aggressive growth drives decision to outsource payroll and HR
By Lesley Young
|Canadian HR Reporter|Last Updated: 09/21/2007

Starbucks Coffee Company’s “grande” growth plan — which will see it open an average of seven new outlets every day for the next four years and almost double its global workforce — is the driving force behind its recent decision to outsource global HR business process services to Cincinnati-based Convergys Corporation.

The arrangement includes payroll and HR administration for the United States and Canada as well as benefits for Canadian employees, and the outsourcing deal is estimated to be worth about $400 million US, according to Toronto-based market intelligence firm IDC Canada.

A spokesperson at the Seattle-based coffee retailer said the outsourcing deal will maximize Starbucks’ ability to process HR data and administrate more than $4 billion US in payroll — which is essential to the success of the coffee retailer’s expansion goal to add 110,000 employees to its current 145,000 global staff in just three years.