In a period where everyone is on edge about higher taxes and tough changes to healthcare, thinking about growth can seem like a daunting task. And the idea of hiring or giving raises might seem ludicrous. But don’t tell that to these companies.
Three supermarket giants – Trader Joe’s, QuikTrip and Costco – have been seeing tremendous growth in an industry that typically relies on part-time, lower-level employees while expecting regular turnover.
The National Journal points out that these three companies are doing it differently. While a typical cashier makes around $20,000 a year, an entry-level cashier at QuikTrip makes around $40,000 a year, plus benefits. Too good to be true?
The key is the attitude toward entry-level employees. While some companies might look to slash labor costs to boost their profit margin, these companies are viewing their workforce as their most vital asset. QuikFix spokesman Mike Thornbrugh told National Journal that entry-level hires are taught everything – from how to order merchandise to how to clean the bathroom. Because of this, most store managers are promoted from within.
“They can see that if you work hard, if you’re smart, the opportunity to grow within the company is very, very good,” Thornbrugh said.
Giving every employee a commission rate
Can you imagine giving your Finance staffers a commission rate? How about HR? How about everyone?
That’s exactly what Fishbowl is doing and it’s been working to their benefit. They’ve seen revenues soar 60% since 2007.
The “highly unusual” compensation model is championed by the company’s CEO and president, David Williams and Mary Michele Scott respectively, as key to their growth. The commission is paid monthly and base-to-commission ratios vary by department. For instance, sales may get 10% salary and 90% commission, while someone in programming may have 20% commission and 80% salary.
It’s a system, Williams and Scott said, that encourages all departments to work for one common goal: Success for the company. Employees will pitch in for other departments when they can and there’s little competition between employees.
The big picture
The big picture idea here is that the key to growing your company, especially in uncertain economic times, is maximizing your labor.
A bigger salary for entry-level workers is one way, but also think about benefits. Fishbowl took the idea of a profit sharing plan and started from the ground up in crafting a wholly unique compensation model.
What are your thoughts on this approach to boosting profits? Let us know in the comments below.
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