When Wages Drive Profits: The ONLY Way Employees Pay You Back
When someone says “Our People Make the Difference”… I always roll my eyes. We all hire from the same talent pool. No employer really has an advantage … and no large group of people can be that amazingly different from any other large group of people.
Or so I thought…Until I read some amazing research that has convinced me that there is one way that employees can actually drive real differentiation and profits.
The study compares two well-known and very similar retailers in the USA: Costco and Sam’s Club.
The first, Sam’s Club, pays their employees an average of just over $11 per hour and about 21% of their employees quit each year for various reasons.
Costco, however, pays their employees $16 per hour and replaces just 6% of employees each year.
Said another way, Sams Club pays less for salary, but 350% more for recruiting, hiring and training expenses than Costco.
Even more impressive are the differences in sales at the two companies. At Costco, where higher-paid employees stick around longer (and thus are probably better trained, happier, and more knowledgeable about the store), sales are $795 per square foot.
