Invest In Your Employees



What is Costco’s secret? The large retailer has weathered the downturn of the economy while still maintaining its low prices for customers and great pay and benefits for employees. Competitor to Wal-Mart and Amazon, Costco is known for its membership in order to shop. Customers pay $55 a year to shop at Costco, which carries everything from diapers to diamonds. Despite the usually dismal background of unsatisfied employees in retail, employees at Costco are some of the happiest employees in the US. At a time when companies were laying off employees by the thousands to cut costs, Costco was giving its employees pay raises. So how does the CEO, Craig Jelinek, do it?

He established a culture that stresses the importance of employees. Costco’s culture focuses on keeping employees happy. This culture has led to low employee turnover, engaged employees, and high productivity. Profits follow close behind. Happy employees create a work environment that creates a space for customers to enjoy themselves. Why spend the time in a store with cranky employees? The low prices have drawn in a steady crowd of customers for Costco, but it is the happy environment that keeps customers coming back for more.

The effects of keeping employee wages up and customer prices low are highlighted at Costco’s headquarters. There’s nothing fancy in Jelinek’s office, just the basics. The carpet is fading and the desks are plain, but that doesn’t matter to the CEO. The money is being sourced to where its important, the employees. Maintaining happy employees is Costco’s key to success. Low employee turnover has drastically increased the ROI of hiring employees. Reduced turnover leaves less money spent on recruiting and hiring new employees and more money circulated back into the company.

Costco’s no-frills culture is visible when comparing the state of Jelinek’s office to the state of one of the many stores located throughout the U.S. The focus is on providing for employees at every level, not just the executives. Employees are happy and content with their careers at Costco, which is easily the reason it is so successful and profitable.

Costco CEO Craig Jelinek Leads the Cheapest, Happiest Company in the World – Businessweek.

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