The ROI of Costco’s Employee Suggestion Program

Coby Skonord|
January 19, 2021

Since its founding, Costco has always had a focus of putting their employees first. This includes offering higher wages, which is possible because of their low turnover rates. As a matter of fact, Costco has the lowest turnover rates in the retail industry. For Employees who have worked at the company for more than one year, the annual turnover rate is below six percent

According to their CEO, another reason that Costco has been able to achieve such low turnover rates and increase the wages of employees is because of the value each employee brings to the business through their ideas and suggestions. Incentives and bonuses are in place to support this behavior and managers are also given autonomy within their store to experiment with departments to boost sales and reduce expenses. 

Results of Costco’s Employee Suggestion Program

  • Solar panels and skylights were installed in stores to reduce the amount of electricity used for lighting (and the resulting bill).

  • Packing boxes were simplified to reduce the amount of fuel used in shipping them to individual stores. Although it was a minor change, switching the cashews sold from a round canister to a square one, saved the company 560 truckloads a year for that one product. 

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