One reason is employee loyalty. Not only are individual Costco employees much more productive than those at competitors like Walmart,16 Costco employees rarely leave the company. At Walmart the turnover rate is approximately 40 percent; at Costco, the turnover rate is 17 percent and drops to an astonishing 6 percent after an employee has been there for a year.17 One study found that when you factor the hidden cost of employee turnover that comes from having to hire and train the next round of replacements (conservatively set at 60 percent of an employee’s salary), Costco actually pays less per
...more
