(Source: Opinion column by Eleanor Bloxham at CNN.com, June 11, 2013. Ms. Bloxham is CEO of The Value Alliance and Corporate Governance Alliance, a board advisory firm.)
Can a company with a low-price strategy afford to pay employees higher wages? Costco seems to think so. And in doing so, Costco saves taxpayers money. Paying well ultimately saves Costco money. The company gets tons of applications and can afford to hire selectively. And it also doesn’t incur the high costs of turnover that other companies must deal with. In fact, turnover at the company runs just 10% overall for hourly workers and 6% if they stay longer than one year.
Costco also offers a benefit package, which includes health, vision, dental, and 401(k) programs for both full- and part-time workers. (The waiting period is 90 days for full-time workers and 180 days for part-timers.) Ninety percent of employees are eligible and 98% of those who are eligible are enrolled, he says. Union workers for Costco in California also have a defined benefit pension plan.
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