Starbucks Korea Sees Highest Turnover Rate in the Industry

Starbucks, which can be said to have spearheaded the coffee culture in South Korea, has recently earned the dubious distinction of having the highest turnover rate in the industry. Starbucks reportedly entered Korea in 1999 and is operated by Shinsegae Group.

While most employees working in cafes are part-time workers with split shifts, Starbucks employees are famously all full-time. In addition to being enrolled in the four major insurances, they also receive benefits such as scholarships, medical expenses, children’s tuition, maternity, and parental leave, which have made them the envy of the industry.

However, recently, rumors have been spreading that Starbucks is underpaying its employees. In reality, while Starbucks employees are full-time, they are paid hourly depending on their position.

Starbucks has different positions, which are store manager, assistant store manager, supervisor, and barista, with the latter two being paid hourly. As of 2024, the hourly wage for baristas is set at $7.87, and they receive additional weekly allowances if they work more than 15 hours a week. They also receive a 150% holiday work allowance if they work on public holidays.

While salaries vary depending on each individual’s working hours, it is generally known that employees receive a monthly salary of around $728. Starbucks employees, who work varying hours such as only on weekends, or only three days a week, receive their monthly salary based on their hourly wage for their respective working hours.

As a result, there are complaints that despite being full-time, they have no money left after paying for utilities, rent, and transportation costs. The average annual salary is confirmed to be about $18,767.

Some argue that if the salary is low, employees can simply work more hours. However, according to the industry, Starbucks stipulates in its employment contracts that employees work 5 hours a day and 25 hours a week, so the salary employees take home is reported to be around $875.

While overtime is possible in special circumstances, it’s not easy to get permission because the hourly wage increases by 150% during overtime. Moreover, Starbucks is known for its intense working environment. Many office workers prefer Starbucks for its convenience, such as smart orders through mobile phones, friendly service, and custom drinks, which attract many store visitors.

Meanwhile, Starbucks faced significant criticism when it implemented a reduction in working hours without wage cuts in 2020. This was a situation where Starbucks, an affiliate of the Shinsegae Group, had no choice but to participate in the group’s initiative.

At the time, Starbucks reportedly reduced operating hours by about 30 minutes to an hour depending on the store. As a result, employees’ salaries naturally decreased. However, the wages of Shinsegae Group employees who were contracted on an annual salary basis did not decrease, causing the Shinsegae Group and Starbucks to face social backlash.

Moreover, Starbucks caused controversy by stating that there are no employees who want to work more than 5 hours a day because they are juggling work with studies or job preparations.

Starbucks has predominantly negative posts on the office worker online community Blind. One employee wrote a post titled “The World of Rotten Water Lilies.” The author said, “The employee space is so small that two people must hold their breath. We eat while looking at the mop sink where we wash the mop and throw away the beverage trash.” The author added, “From the start when designing the store, they minimized the employee space to fit one more table for customers.”

Another community user posted a thread titled “How Much is Starbucks’ Monthly Salary?” In response, Starbucks employees commented, “It’s embarrassing to say,” and “The amount is shameful. You have to come with the mindset of volunteering.”