Employee handing sample of cheese to woman sh.width QAGKAOI.jpg

Who Treats Employees Better: Costco or Sam’s Club?

Employee handing sample of cheese to woman shopper.

Image source: Getty Images.

It would be easy to make a snap decision regarding whether Costco or Sam’s Club employees enjoy better treatment. However, that’s not what we set out to do. We wanted to check apples against apples to learn which environment is most employee-centric. To do that, we compared average employee pay, company benefits, the potential to unionize, and finally, what employees have to say. Here’s what we found.

Average employee pay

Whether we’re looking at hourly wages at Costco or Sam’s Club, it’s important to note that they are entirely dependent on the job title. To come up with an average nationwide hourly wage, ZipRecruiter included all employees — those on the bottom of the wage ladder as well as those at the top.

According to ZipRecruiter:

  • Costco: Average hourly wage of $20.91/hour, or $43,493/year
  • Sam’s Club: Average hourly wage of $19.31/hour, or $40,165/year

How an employee feels about their job can be directly tied to whether they have enough money in their checking account to cover bills. As we’ll see later, the fact that Costco pays a better overall rate is likely one of the reasons Costco employees appear to be more satisfied with their jobs.

Winner: Costco

Benefits

It’s a challenge to fairly compare the two company’s benefits, primarily because offering the same benefits does not mean they are equal. For example, both companies offer health insurance, but all Costco employees are eligible, including full-time and part-time (after a specific period of employment). Health benefits at Costco include medical, dental, vision, and prescription drug coverage. While Sam’s Club does offer health insurance, it’s only available full-time employees. Both companies do offer a 401(k) plan with an employer match, though.

Benefit Costco Sam’s Club
Free club membership Yes Yes
Health Insurance Yes Yes
401(k) with employer match Yes Yes
Pension plan Yes
Paid vacation time Yes Yes
Paid sick leave Yes Yes
Holiday pay Yes Yes
Employee stock options Yes Yes
Bonuses Yes Yes
Tuition reimbursement Yes Yes
Paid maternity leave Yes Yes
Unpaid paternity leave Yes Yes
10% discount on fresh produce Yes
Data source: College Success Foundation and AisleOfShame.com. *Costco pension plan is available in unionized clubs only.

Winner: Costco, due to a more generous healthcare plan and bonus program. For example, long-tenured hourly employees receive an annual bonus as well as additional compensation twice a year in the form of bonuses and extra checks.

Potential to unionize

Due to its merger with the union-staff Price Club in the 1990s, employees working in the old Price Club locations are unionized. According to a Q&A feature on Indeed.com (where answers are provided by employees), even mentioning unions as a Sam’s Club employee can lead to termination.

Winner: Costco

Employee satisfaction

The job search site Glassdoor gives company employees the opportunity to rate the company they work for. Along with the respect they’re shown on the job, flexibility, and the opportunity to move up the ranks, this is where having enough money to save a little each month factors into job satisfaction. Here’s how Costco and Sam’s Club employees rated their respective employers.

Overall rating

  • Costco employees: 4.0 out of 5
  • Sam’s Club employees: 3.3 out of 5

CEO approval

  • Costco employees: 84%
  • Sam’s Club employees: 61%

Would recommend the job to a friend

  • Costco employees: 76%
  • Sam’s Club employees: 54%

Winner: Costco

Perhaps the best snapshot of how well a company treats its employees can be found in one statistic: The turnover rate. While Costco experiences a turnover rate of 17%, Sam’s Club has a rate of 44%. In our opinion, that makes the final decision easier. Costco treats its employees better than Sam’s Club treats its employees.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Dana George has positions in Apple. The Motley Fool has positions in and recommends Apple and Costco Wholesale. The Motley Fool has a disclosure policy.

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