However, it is also true that low employee satisfaction can yield a high turnover rate, and finding, hiring, and training new employees is also expensive. Walmart’s turnover rate is about 44% per year, while Costco’s is only about 17% (Cascio, 2006). This gives Costco the benefit of not having to pay to find as many employees, so the company can afford to pay the employees they do have more fairly. Walmart’s average wage lies below $12 per hour, whereas the average Costco wage is about $21 per hour (O’Donnell and McElhaney, 2014). Costco’s wages serve as more than just fair compensation; rather, they serve as investments in the employees of the organization. The company does not spend any money on advertising, but spending on the organization’s employees motivates each individual to be a walking advertisement. Thus, strong employee relations can serve to benefit a company beyond just being
However, it is also true that low employee satisfaction can yield a high turnover rate, and finding, hiring, and training new employees is also expensive. Walmart’s turnover rate is about 44% per year, while Costco’s is only about 17% (Cascio, 2006). This gives Costco the benefit of not having to pay to find as many employees, so the company can afford to pay the employees they do have more fairly. Walmart’s average wage lies below $12 per hour, whereas the average Costco wage is about $21 per hour (O’Donnell and McElhaney, 2014). Costco’s wages serve as more than just fair compensation; rather, they serve as investments in the employees of the organization. The company does not spend any money on advertising, but spending on the organization’s employees motivates each individual to be a walking advertisement. Thus, strong employee relations can serve to benefit a company beyond just being