Costco may be the happiest company on Earth
Bloomberg Businessweek has a feature out Thursday calling Costco (COST +1.76%) the cheapest, happiest company in the world.
Reporter Brad Stone makes a pretty good case, too. Here are the reasons he gives to back up his claim:
1. Employees have great perks. One 59-year-old worker who has been there for 26 years makes $52,700 a year, gets five weeks of vacation and has a nice 401k that Costco fills in with matching funds. About 88% of employees have health insurance from the company, and the medical plans offer great coverage.
"I just think people need to make a living wage with health benefits," the company's CEO, Craig Jelinek, told Stone# "It also puts more money back into the economy and creates a healthier country# It's really that simple#"
2# Employees are paid well# Hourly workers make an average of $20#89 an hour# Compare that with Wal-Mart #WMT +0#50%#, which pays an average of $12#67 an hour, Stone reports#
3# Sales keep soaring# They have grown by 39% since 2009, even while other retailers have struggled in the economic downturn#
4# Costco is extremely frugal# It's generous with employees, but the executive offices in Washington have faded blue carpet, faux-wood tables and cheap art prints on the walls, Stone reports# The previous CEO made only $325,000 a year, though the current one makes more than twice as much# Still, other retail bosses make millions#
5# It doesn't hire business school graduates# Instead, it promotes employees from below and even pays for workers to attend graduate school# As a result, 70% of its warehouse managers started at the bottom, Stone reports#
6# No one leaves# Certainly the low employee turnover says something is going right# The turnover rate is only 5% for employees who have been there for more than a year, Stone reports# Among executives, the rate falls to less than 1%#
7# The stock price is on fire, soaring nearly 40% over the past two years# For any employee holding stock or options, that share price run-up is one more reason to stay with the job#
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