That’s what the folks at Addicting Info think. What are your thoughts?
There are memes floating around the Internet regarding Walmart’s employment model vs. Costco’s employment model, and how Costco’s profits have gone up while Walmart is finding itself in trouble. People are calling on Walmart to pay its employees living wages, saying that if Costco, Trader Joe’s, Wegman’s, and more, can do it and still turn hefty profits, then Walmart should have no problems with it. Then there are those on Walmart’s side of the issue (which are many), who believe that no company should have to pay what they consider “high wages” for unskilled labor.
However, there’s another way to look at it, which is from a business standpoint. Here’s what happens: You keep your employees happy by paying them a living wage and providing benefits, and generally treating them well at all levels, to keep their morale up. They, in turn, become more productive employees and, because they have a good job, are less likely to leave the instant something else comes along.
This, in turn, drives down your turnover costs. As businesses *ought* to know, turnover costs more money than investing in your workforce does. You have lost productivity during the hiring and training process, higher recruiting costs, and more, averaging to about 20% of an employee’s annual pay, for jobs that pay $50,000 per year or less. For jobs paying $30,000 per year or less, replacing one employee amounts to roughly 16% of their annual salary, but if your turnover is even 30% per year, which is lower than average turnover across the food service and hospitality industries, that still adds up.
Roughly 70% of Walmart employees leave within the first year, meaning most, if not all, Walmart stores have near-constant turnover.