People love both shopping and working at Costco. A glance at sites like Glassdoor paints a clear picture of their company culture. It has listed Costco as one of the best places to work 10 out of the last 11 years, and has thousands of comments from current employees explaining why. And, Craig Jelinek has been voted among the top CEOs for the last 7 years. At a time when the retail industry is seeing a national turnover rate of 60%, Costco only had 6% last year. So, the burning question for many retailers is how do they do it? Based on employee responses, here are 7 ways Costco keeps its employees happy.
7 Ways Costco Keeps Employees Happy
1. High Wages
Its high wages are the most frequently mentioned reason why its employees are happy with their jobs. Costco values its employees and compensates them well for their time and commitment to the company. Not only do they offer great starting wages, but it has also been at the forefront of minimum wage increases. In 2021 alone, it raised its minimum wage twice to keep up with rising costs and inflation.
Base pay employees now start at $17 an hour. However, they are plenty of opportunities to earn promotions with a higher salary. Food managers earn over $50 an hour. But, it’s pharmacists who make the most, earning an average salary of $138k annually.
2. Excellent Benefits
In addition to competitive pay, Costco also offers excellent benefits. Employees have guaranteed hours and overtime pay on Sundays (time and a half). They also receive paid holidays (including a floating holiday) and paid time off (PTO) based on seniority. People start with one week during their first year, but can earn up to 5 weeks after 15 years of employment.
You can’t overlook its 401(k) matching program either. Costco will match your contributions to the account of up to $500. While it may not seem like much, your earnings can increase exponentially over time.
And, employees are eligible for health benefits after 180 days, as long as they work 24 hours a week. Their health insurance provides great coverage as well as affordable vision and dental plans. Best of all, employees have the added benefit of choosing their provider.
In comparison to other employers, Costco’s benefits package far surpasses the competition.
3. Perks and Freebies
Another way Costco keeps employees happy is by offering other perks and freebies. For example, every employee receives four free memberships to share with family and friends. They also get a free turkey on Thanksgiving.
Costco employees also get to shop after hours, avoiding the crowds and lines. Plus, they also get the first pick of newly arrived inventory. Although this won’t make a difference with your regular shopping, it can give you a huge advantage during the holidays.
4. A Family Work Culture
After reading several of the reviews, it was clear that Costco has a work culture that is much different than your average retailer. Employees consistently say that they feel like they are part of a family that is committed to the same goals. This shared work ethic is great for morale and building camaraderie among team members.
After digging a little deeper, people attribute the positive work environment to two factors. The first is that Costco treats its employees as people rather than machines. So, they offer real benefits that allow employees to balance their work and personal lives.
The second is that its management stays attuned to its employees’ needs. Based on internal statistics, 76% of Costco managers started at an entry-level position. This means that not only do they understand the jobs they are supervising, but they also know their employees on an individual level. In many cases, they may have worked side by side. Managers who stay in touch with daily operations can roll up their sleeves and assist when things get busy. And, they have a vested interest in protecting their employees and ensuring their happiness.
5. Opportunities for Advancement
Furthermore, Costco supports ambitious employees by providing many opportunities for advancement. It encourages promotion from within, allowing for both vertical and horizontal movement within the company. Additionally, they offer greater flexibility since positions are easily transferrable with locations nationwide.
6. A Sense of Security
Working for a company that you feel cares about you gives you a sense of security you won’t find many places. Rather than viewing employees as replaceable, it listens to its people and responds to their needs. The wage increases provide a perfect example of how Costco adapts to support its people instead of only focusing on the bottom line.
When emergencies or periods of instability come up, Costco is more willing to work with its employees instead of hiring new ones. Knowing that your job isn’t in jeopardy when dealing with a personal crisis eases the stress and deepens their commitment to the company.
7. Overall Job Satisfaction
When you look for the fundamental reason why Costco employees are happy, it comes down to their overall job satisfaction.
Its employees consistently say that they enjoy the benefits and the friendly atmosphere. It’s a great environment for those who like working with people, and most employees genuinely seem to like the people they work with. Both of these lead to greater job satisfaction and lower turnover rates. When people are satisfied, they don’t feel the need to explore other career options.
Costco realizes that its employees are real people. It values each person and tries to understand what they need to be happy. For some, it’s the pay and benefits package. Other people appreciate the respect and independence Costco gives them to do the job they were hired to do. For others, it’s the reward and recognition for a job well done. Whatever their personal motivations, everyone can agree that Costco is among the best at rewarding its employees for their service.
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Jenny Smedra is an avid world traveler, ESL teacher, former archaeologist, and freelance writer. Choosing a life abroad had strengthened her commitment to finding ways to bring people together across language and cultural barriers. While most of her time is dedicated to either working with children, she also enjoys good friends, good food, and new adventures.