Headquartered in Issaquah, WA, Costco, founded in 1983, is the third largest U.S. retail chain and seventh largest worldwide.Of the two founders, Jim Sinegal, remained CEO until retiring in 2011. Sinegal turned the reins over to Craig Jelinek, a nearly 30-year employee. The fact a member of Costco’s leadership team was tapped to become the retailer’s second CEO shouldn’t be surprising to anyone who is familiar with Costco’s business strategies. Costco explicitly focuses on developing people and promoting from within.Costco operates nearly 700 warehouses globally; almost 500 in the U.S. Costco’s 2015 fiscal year ending August 30, showed sales up 3%, while net income rose 15.5%. Perhaps most importantly, their member base grew by 6%.
Costco pays more than other retailers, with an average employee making about $21/hour Costco provides about 90% of their employees with health insurance and other benefits Most of the leadership team (including the current CEO) started out in warehouses Craig Jelinek, CEO since 2012“Most of our managers and executives started out in the warehouses and we like to promote from within because it’s difficult to understand how what you do affects the warehouses unless you’ve worked in one.”“Costco has always offered good wages and benefits because we don’t want people to be worrying about those things. We need them to focus on their jobs.”“People are key…primary job of our warehouse managers is to develop people because people are the key to our success.” Evaluate how your organization’s pay and benefits compare to your strongest competitors and to your industry sector overall. If you’re not at or near the top, consider changing your business strategy to a “Good Jobs” strategy. Assess the current priority of ‘develop your people’ among your leaders’ responsibilities. If it’s currently not a high priority, consider the benefits, such as higher retention rates and being able to promote more often from within. Are you and your leadership team both talking the talk and walking the walk of “Our Employees are Our Greatest Asset” daily? If not, evaluate ways to integrate demonstrating the value of your employees into daily business activities.* Costco’s 2015 Annual Report ** Costco’s focus on employees is tied to ongoing stellar performance. Leber, Jessica, (March 2015), Can Treating Low-Wage Workers Well Become The Hot New Business Strategy?, FastCompany CoExist