Last year, I consulted for a coffee business that was opening up its first retail location. Before I came onboard, the owner had hired baristas of varying experience levels, most of whom came from two distinctly different shops in Los Angeles.
One of the shops was a reasonably busy, cozy neighborhood cafe that was bright and inviting, and had a playful if straightforward menu of signature beverages. The other was a big player in LA specialty coffee, with an extensive menu and a reputation for meticulous drink preparation standards.
As I was setting up HR functions for the business prior to its opening, I was immediately greeted with very disgruntled staff. Why? Because the owner of the business hired a bunch of baristas, and then offered them significantly different wages.
Sara* was the lowest-paid employee. She was from the cozy neighborhood cafe, and had five years of barista experience—she was getting paid $18 per hour, a hair above minimum wage in Los Angeles (the county minimum wage is $17.81 per hour), plus tips. Anne* was the highest-paid employee: She had two years of experience at the specialty cafe with very high standards. She was starting at $21 per hour, plus tips.
Talking to Sara, it was clear she was in pain and confused. As a human resources professional, I generally hope to meet new employees who are excited about fresh opportunities. My first meeting with Sara was one where we immediately had to address why her experience was valued far less than her colleague’s. Having a conversation with someone whose work is compensated a full three dollars lower than one of their peers is as uncomfortable as it gets, especially with standards you have not set and that may be ill-defined and subject to debate.
I could understand what the owner of the business was thinking. The higher-paid employee came with the kind of technical precision they were looking for—this owner was hoping their shop could be a major player in Los Angeles’ retail coffee landscape. And it wasn’t like Anne was bad at her job: Every drink she produced was consistently excellent, and Sara’s drinks were clearly not at the same level.
Sara expressed hurt and frustration over this assessment that she wasn’t as skilled as Anne. She brought up the fact that she had more than twice as much experience in coffee, and brought many other skills to the table—she had great hospitality skills and was able to pick up technical concepts quickly.
There are many nuances to this matter, but headache and heartache could have been avoided if the owner had been more intentional about how they approached paying baristas from the outset. For a new business, having a starting team with such a wide and unacknowledged gulf in wages breeds resentment and mistrust. Employees are well within their rights to share their pay rates with each other and odds are, they will.
Without a transparent compensation structure and well-defined beverage standards, what’s left unsaid can cost a business considerable time and money. At best, having ill-defined wage standards can mean fielding more meetings with workers about pay disparities; at worst, it can lead to turnover, and may damage a business’s brand in the eyes of potential future employees.
Coffee people look out for their community, and will let their peers know which places to work at and which ones to avoid. If baristas hear that a shop pays people erratically and without a well-understood system in place, they may not apply to work there.
In order to set a fair and consistent compensation structure, managers and business owners must first wrestle with a question that is sure to generate passionate debate across the socioeconomic spectrum: What is the value of a barista?
The Importance of Wage Transparency
Through my work in HR and sales over the past five years, the line I’ve used most when talking to business owners is, “The barista role is uniquely positioned as a high-skill, yet low-wage job.” A book could likely be written about why this is the case.
At a basic level, there’s tension inherent in how we think about coffee: It’s either viewed as a commodity, as basic as food or water, or as a luxury item that’s hand-crafted and meticulously prepared. The highly competitive landscape of good-to-great coffee shops keeps prices low for consumers, which keeps margins low, which keeps wages low, despite the amount of labor and knowledge baristas need to serve a good cup of coffee.
Wages can be offset by tips, but tips are inconsistent. Where you work matters: Certain neighborhoods have more generous and consistent tippers, but even small changes like bad weather—or larger ones, like protests and boycotts—can result in days when baristas take home significantly less than they normally would.
On top of the instability of tipping, there is no universal standard for measuring the value of a barista. Though industry certification programs exist, they are not widely adopted. For the most part, business owners are left to determine their own wage standards, including how qualifications and level of training factor in.
Business owners rarely find a staff full of unicorns: those baristas who are both technical experts and effortless purveyors of hospitality. Instead, they’re more likely to hire workers with mixed experience levels, and need to strike a fair and transparent balance between how both skill sets are compensated. If they want to hire a mix of people—some of whom have the soft skills that build community and loyalty and others who have clear technical expertise—they must find the balance between both capabilities and be equally transparent about how those skills are measured, too.
How, then, should a business owner assess—and compensate—the skills needed to work behind the bar?
Be Intentional About Wage Parameters
Deciding what to pay staff can be determined by a range of factors—including specific skills and experience levels—and those factors should be clearly stated and fairly applied across all potential employees. Wage standards should also be laid out as specifically as possible in job descriptions.
By contrast, it’s best to avoid broad requirements, like asking applicants for “2 years of specialty coffee experience.” Instead, owners and managers can break down the kinds of skills baristas need to meet the coffee shop’s stated quality goals. If proficiency in latte art, brewing pour-overs, and developing signature beverages is important, then those expectations should be laid out clearly.
If great hospitality is an essential requirement for staff, that should also be listed, and there should be structures in place to determine an applicant’s relevant qualifications. In rare scenarios, a barista may have received hospitality training through a former employer. In other cases, it is important to ask specific questions during interviews, and to check references. These might include, “Tell me about a time you turned an upset customer into a happy regular,” or “Can you tell me what your regulars would say about Sara’s customer service?”
There’s a case for Anne—who went through an extensive training program, and served coffee at high standards of technical precision—to receive a higher wage than Sara, who had not been held to the same standard of coffee preparation. If I, as a hiring manager, am bringing in Sara at a lower pay rate, I need to make sure there is a system in place for her to close the gap with measurable milestones.
Whether using an in-house trainer, a consultant, or an education program from a roasting partner, a business owner can assign monetary values to the development of certain skills, giving raises as baristas show proficiency.
Ultimately, it was too difficult to address the wide gap between Sara’s and Anne’s wages. While I advocated for Sara to get a dollar more, and to participate in a training program that would bring her closer to Anne’s wage, Sara quickly found an opportunity outside of coffee with a more transparent pay structure. The messiness of the pay dispute was indicative of larger issues of mismanaged communication and expectations, and both Anne and I moved on from the company shortly after.
When it comes to wage determinations, coffee business owners must make firm decisions at the outset, and they must be consistent. Discord and confusion are costly for businesses operating on small margins and with plenty of competition. The work an owner puts into building a positive employee experience—one that values transparency and professional development—pays back in loyalty, lower turnover costs, and higher sales. This is the kind of proactive system building that saves many more hours of reactive problem solving.
*Names have been changed upon request.
