What the Church Can Learn From Costco

Costco is probably best known for its $1.50 hot dogs. It’s one of the best deals you’ll find. While the hot dog’s price hasn’t changed for 41 years, Costco’s earnings and status have. They are the #3 retail business in the US, behind Walmart and Amazon. This company, with $270 billion in annual sales, boasts membership of 84 million raving fans. They roughly doubled their revenue every decade ($32 billion in 2000 to $78 billion in 2010 to $167 billion in 2020).

So what’s their secret? How have they sustained this level of success in a highly competitive, saturated market? It’s their culture. Peter Drucker is often attributed with saying, “Culture eats strategy for breakfast.” Costco has a great strategy, but their culture is one of the best.

So what’s their culture like? They have a culture of development. They focus on their staff. They believe happy staff makes happy customers and a profitable company. So how do they treat their staff?

#1 Costco pays its staff above industry standards.

Costco values its staff, and it shows in its compensation. Costco starts its hourly wage at $20, but the average hourly rate is around $32. Part-time staff also receive health benefits. This is unheard of for most retail stores. This cost alone would be enormous, but it’s a key part of Costco’s value proposition.

#2 Costco trains its staff.

Costco builds its leadership pipeline from the floor up. They train their employees to work in different departments and have cross-functional skills. Managers are expected to teach and train their employees, and many warehouses have long-tenured hourly employees who serve as “culture coaches” to mentor new staff. MIT professor Zeynep Ton shares how Costco invests in and trains its staff in her book, The Good Jobs Strategy.

#3 Costco promotes its staff.

Costco has shared that in 2024, they promoted 95 new warehouse managers and 85 percent of them started at the company as hourly employees. Even their CEO came up through the warehouse. Ron Vachris started in 1982 as a part-time receiving clerk at Price Club (which later merged with Costco), unloading trucks with a forklift. He rose through the ranks to become CEO in 2024.

These are just a few things they have done, and the results have paid off in big ways. Their staff love their company and want to be there. More than 23,700 Costco employees have been with the company for over 25 years. Their turnover rate is reported at 7%, compared to the industry standard of 50-60% in retail. This shows commitment, loyalty, and raving fans among their staff.

What can the church learn from Costco?

Churches aren’t called to be Costco. We have a different mission and purpose. But we can learn from how Costco operates, which is countercultural to most business practices. Costco values its staff and invests in their staff. The church also values the staff, but it hasn’t always translated into action. Lifeway Research found that only 1 in 4 churches have a staff development plan and 1 out of 3 churches spend $250 or less to train and develop their staff.

The Church’s mission is to “make disciples” and build God’s kingdom. Most churches focus on the people coming to the church and sitting in pews. While this should be a focus, it shouldn’t be the sole focus. Discipleship and development should also be focused on the staff and leaders of the church. Most churches would agree, but I think we sometimes get stuck because we don’t know where to start. Here are some simple tips.

1. Do one thing to develop your team. Focus on doing one thing with your team. It may be reading a book together and discussing it once a week. It may be listening to a podcast and talking through it after a staff meeting. It may be doing an assessment together like Working Genius. Development happens when the leader takes the initiative. No one on your team is going to push you or make it happen. It doesn’t have to be a big thing. It can just start with one small step.
2. Have intentional conversations about their role. You may do a decent job of encouraging your staff and team, but when was the last time you gave some constructive feedback? You’ve probably felt frustrated or wished your staff member had done something different. Proverbs 27:6 says, “Wounds from a friend can be trusted.” It’s better to have an honest conversation that may hurt than to ignore it and pretend things are fine.
3. Do a 1-on-1 with your team. When was the last time you met one-on-one with a team member? There is no single right way to run a one-on-one meeting. It is important, though, to let your staff share their progress and to offer encouragement or feedback. It may feel like a box to check some weeks, but it sets the table for you to invest and connect with your staff.

Costco proves that investing in your people pays off. Their staff stay, grow, and become their biggest fans. If that kind of investment works for selling $1.50 hot dogs, imagine what it could do for the people building God’s kingdom. Start with one step this week.