Your Survival Guy read this WSJ article over the weekend with great interest. If you or someone you love is just starting out in corporate America, it is paramount for them to understand their company’s benefits. Costco, once again featured for its outstanding business practices, understands the value of employee retention and the cost of losing them. It has a 401(k) match of 9% for those who have been with the company for 25 years or more. The WSJ’s Celia Bernhardt and Sarah Nassauer explain:
For employees with at least a year of service, Costco contributes an amount equivalent to 4% of their pay. That rises as employees accrue tenure, so workers who have been with Costco for 25 years or more receive a 9% contribution. The company also has a small match that allows employees to receive up to an additional $500 annually if they contribute $1,000.
For Costco, it’s one of the ways, alongside inexpensive healthcare and higher-than-normal hourly wages, that it retains experienced employees. The company places a premium on keeping turnover low, a strategy its founders believed would reduce costs associated with training new hires and lead to better customer service.
Some companies go far and beyond, offering jealousy-inducing match rates to win over prime talent. Employers in specialized fields who want to stay neck-in-neck with their rivals often conduct benchmark surveys to assess what kind of benefits are most attractive to their staff and what is offered by other companies.
Action Line: When it comes time to roll over that 401(k) into an IRA and plan for your retirement, email me at ejsmith@yoursurvivalguy.com.
