12.02.2005
Decency Is Compatible With Profitability
Jim Sinegal isn't your typical executive, and he's happy about that. What Sinegal has proven is that a company doesn't have to be ruthless. Being humane and ethical can also make you money.
. . . Costco has the lowest employee turnover rate in retailing. Its turnover is five times lower than its chief rival, Wal-Mart. And Costco pays higher than average wages — $17 an hour — 40 percent more than Sam's Club, the warehouse chain owned by Wal-Mart. And it offers better than average benefits, including health care coverage to more than 90 percent of its workforce.Costco doesn't have a P.R. department and it doesn't spend a dime on advertising. There's a real business advantage to treating employees well, Sinegal said. "Imagine that you have 120,000 loyal ambassadors out there who are constantly saying good things about Costco. It has to be a significant advantage for you," he explained. Many Costco workers have been with the company since it was founded in 1983. Once hired, they rarely leave.
|| doug, 11:07
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I saw this interview on 20/20 last night also. It was a great interview. He is a true leader. His testimony truly resonated with my spirit. There is alot to be learned from Sinegal. I wish there was alot more CEO's were like him. His story is a testimony that treating your employees well and not elevating Executives on a pedistal is a world class business model, and is much better for the bottom line.