Retail
salesperson is the most common job in America. The sector is still
growing, but most of the jobs come with lousy compensation. The average
salary? Just $25,310 per year, according to the Bureau of Labor
Statistics.
There's no great mystery as to why companies keep salaries low -- it's an easy way to keep profit margins up. But Zeynep Ton, a professor at MIT's Sloan School of Management, argued in an article in the Harvard Business Review that the tactic usually backfires. By cutting back on manpower, companies experience a drop in performance, which, in turn, leads to a dip in customer satisfaction, and then the ultimate corporate problem -- a drop-off in sales. Home Depot is a case in point:
When former GE executive Robert Nardelli became CEO, at the end of 2000, he cut staffing levels and increased the percentage of part-timers
to reduce costs and boost profits. Those moves achieved both goals
immediately, but they eventually caused Home Depot's excellent customer
service -- the company's claim to fame and, arguably, primary source of
competitive advantage -- to suffer, customer satisfaction to plunge, and
same-store sales growth to drop and even go negative in some years.
Treating workers well pays off in the long run, Ton argues. She says that four employers, Costco, Trader Joe's, QuikTrip and the Spanish supermarket chain Mercadona, are prime examples. Here's why:
1. Trader Joe's
The Trader Joe's Company has more than 365 stores in more than 30 states, and offers upscale grocery fare such as health foods, produce and nutritional supplements. It has some 10,000 employees.
Starting salary: $40,000 to $60,000. Managers also have the potential to earn six-figure salaries.
Benefits: Trader Joe's contributes an additional 15.4 percent of your gross income each year to your retirement account.
2. Costco
Costco Wholesale Corp. has more than 590 membership warehouse stores in 40 U.S. states and Australia, Canada, Japan, Mexico, Puerto Rico, South Korea, Taiwan and the U.K. It has roughly 174,000 employees.
Starting salary: Stockers and cashiers make on average between $11.84 to $12.61 an hour. The average starting salary for a full-time employee is $45,000 a year, compared to just $17,000 for Sam's Club.
What the CEO says: "At Costco, we know that paying employees good wages makes business sense."
3. QuikTrip
QuikTrip Corp. operates more than 600 gasoline/convenience stores in 10 states, mostly in the central U.S. It has roughly 9,600 employees.
Starting salary: An entry-level clerk earns an average of $8.66 an hour, but most store managers are promoted from within and are paid relatively well. The overall salary average for all staff is $32,966.
Happy employees: Fortune magazine has named QuikTrip one of the 100 best companies to work for in every year since 2003. It has robust training programs for workers -- even low-level employees receive two weeks of training. Employees also like working here -- staff turnover is 22 percent, the lowest in the industry.
4. Mercadona
Mercadona S.A. has 1,419 stores throughout Spain. It has roughly 70,000 employees and is expanding, having hired 6,500 employees last year alone. It is known for offering consumers the lowest prices in Spain.