After 40 Years of Work, $1.5 Million in Retirement Savings... Costco Boasts the Best Employee Benefits in the Industry

WSJ Highlights Costco’s Management Strategy
“Low Turnover Rate Thanks to High Wages and Benefits”

At Costco in the United States, a cashier who has manned the register for 40 years has accumulated more than 1 million dollars (approximately 1.5 billion won) in their retirement account. This has drawn attention to Costco's management strategy of encouraging long-term employee retention by offering higher hourly wages, a variety of welfare policies, and a robust retirement pension system, outpacing its competitors.

On July 8 (local time), The Wall Street Journal (WSJ) featured the story of Tony Bazar, a 60-year-old cashier who has worked at the Costco store in Tucson, Arizona, for about 40 years.

A view of the Costco store in Richmond, California, USA. Getty Images

Bazar joined Price Club, the predecessor to Costco, in 1986, starting with cart collection and product stocking before taking on responsibility for the self-checkout counter. His starting hourly wage was $5.85, but his current hourly wage is $32.90 (about 49,500 won). Over his long career, his 401(k) retirement account has grown to more than 1 million dollars (approximately 1.5 billion won). Bazar expressed his gratitude, saying, "I could retire at any time, but Costco has treated me well."

WSJ used this case to illustrate Costco's management strategy. Costco offers employees higher wages and better benefits than its competitors. As a result, the company has a low turnover rate, allowing experienced employees to stay for many years. These skilled employees process transactions more quickly, enhancing customer service and helping to train new staff. This virtuous cycle leads to greater customer satisfaction and higher membership renewal rates, ultimately boosting company profits.

Costco's welfare benefits are also among the best in the industry. Thanks to company-sponsored health insurance, the out-of-pocket cost for general doctor visits is only $15, while specialist visits cost just $25. In fact, when Bazar's wife was diagnosed with brain cancer, Costco's medical insurance allowed her to undergo three surgeries with almost no personal expense. With stable income and benefits, Bazar was able to purchase a three-bedroom house with a swimming pool in 2009 and has traveled to Europe twice in the past decade.

Costco has established various systems so that employees who do not wish to be promoted can still continue working for a long time. As a result, the turnover rate after one year of employment is reportedly around 7%, far below the industry average. Bazar himself has declined several offers for management positions, choosing to remain on the front lines because he enjoys working directly with customers. Bazar said, "This job is my true calling."

Gary Millerchip, Chief Financial Officer (CFO) of Costco, explained, "Thousands of part-time employees in the United States have more than 1 million dollars in their 401(k) accounts," adding, "Investing in our employees leads to long-term retention and creates a virtuous cycle of producing skilled talent."

This content was produced with the assistance of AI translation services.