As most retailers seek ways to avoid paying employees a living wage, one store has figured out that paying workers well not only increases loyalty, but productivity as well. People fortunate enough to work at Container Store make, on average, $50,000 a year, CEO Kip Tindell says in his new book, Uncontainable.
Those in opposition to providing fair pay to employees claim raising the minimum wage will increase prices and destroy jobs, but Tindell says that it’s entirely possible to make a profit and pay employees a living wage, because you gain more productivity from happy workers.
“You can pay them twice as much and still save, since you get three times the productivity at two times the cost,” he told Business Insider. His theory is “one equals three”: “one great person can easily do the business productivity of three good people,” which allows Tindell to pay workers “50% to 100% above industry average.”
According to Tindell, the company has a 10 percent turnover rate — 65 percent below the industry average of 75 percent, and he credits the company’s exemplary treatment of workers for that particular success. “Pay is more important than most people realize, particularly if you’re trying to attract and keep really great people,” he explained.
Most importantly, Tindell feels he has a moral obligation to pay his workers more. “If you’re lucky enough to be an employer, you have a moral obligation to create a great work environment,” he said.
I addition, the company really shines in its treatment of women. Women hold less than 15 percent of executive officer positions in America’s largest companies, but at The Container Store, they are much more prevalent in upper management. About 70 percent of top leadership positions are held by women.
As the incoming president of the National Retail Federation, which typically opposes minimum wage increases, Tindell hopes to influence other companies to pay employees better. “I’ll work to get the NRF to actually moderate and review that” stance, he said. “I also think certain companies will soon come out in favor of raising the minimum wage because they’re going to have to politically. Better pay leads to better profitability.”
“We were just looking for the best leaders. Obviously, we have nothing against men,” he explained. “It’s just that the skillset — communication, empathy, emotional intelligence, understanding what we stand for…and being like our target customer — really fits the bill with women.”