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Why the Container Store Can Afford to Pay Employees the Big Bucks

The average retail clerk makes a median salary of $28,000 a year across the United States. Employees at the Container Store, however, make an average of $50,000 a year -- nearly twice that. Why would a store pay more than the market rate? It all comes down to CEO Kip Tindell's "one great person equals three good people" rule.

The average retail clerk makes a median salary of $28,000 a year across the United States. Employees at the Container Store, however, make an average of $50,000 a year — nearly twice that. Why would a store pay more than the market rate? It all comes down to CEO Kip Tindell’s “one great person equals three good people” rule.

 container store

(Photo Credit: Dave Dugdale/Flickr)

“We’re talking about business productivity,” Tindell tells Business Insider‘s Jenna Goudreau. “Of course, no one person is better than another person as a person. But if you can, why not hire great people? And you can pay them twice as much and still save, since you get three times the productivity at two times the cost. They win, you save money, the customers win, and all the employees win because they get to work with someone great. These people are the best in the industry, and I can’t wait to get up in the morning and work with them.”

Do You Know What You're Worth?

Tindell started The Container Store in 1978 with two friends and $35,000. The store now has 6,000 employees in 67 locations. Last year, it made $800 million dollars. Clearly, the organization can afford to pay its employees well, but in an era when many high-profit businesses underpay workers to maintain profits, it’s still inspirational for workers as well as decision-makers.

Among Tindell’s other rules of business, which he discusses in his book Uncontainable: How Passion, Commitment, and Conscious Capitalism Built a Business Where Everyone Thrives:

1. Women Make the Best Executives

Tindell rates emotional intelligence very highly as a leadership quality, which is why, he tells Goudreau, he values women so much as executives.

“I’m glad to see the feminization of American business,” he says. “Emotional intelligence is the key to being really successful. People who have it keep their egos in check; they’re comfortable with surrounding themselves with people better than them. They’re high on Maslow’s hierarchy of needs. They aren’t hungry or insecure. They’re calm and have self-awareness.”

2. Invest in Training

At Forbes, Tindell tells Dan Schawbel that one of the company’s foundation principles is that, “Intuition does not come to an unprepared mind. You need to train before it happens.”

To that end, the Container Store invests heavily in employee training — over 263 hours for a new employee in their first year alone.

3. Follow the Golden Rule of Business

Don’t just treat people the way you’d like to be treated, Tindell says, treat them the way they’d like to be treated.

“Everybody loves to say that it’s not all about pay,” he says. “But pay is more important than most people realize, particularly if you’re trying to attract and keep really great people.”

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Do you think, at a certain point, a higher salary buys loyalty? We want to hear from you! Leave a comment or join the discussion on Twitter.

Jen Hubley Luckwaldt
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