EMPLOYEES

COMPENSATION & BENEFITS

Everywhere we do business, we seek to provide competitive wages and benefits to our employees. The vast majority of Costco’s workforce consists of hourly employees in warehouse locations. We compensate these hourly employees very well by retail standards. This helps us in the long run by minimizing turnover and enhancing employee productivity, commitment, and loyalty. We encourage our employees to view Costco as a place where they can have a long-term career rather than just a job.

In the U.S., we provide generous benefits, including affordable health care coverage for full- and part-time employees, and sizable contributions to company-sponsored retirement plans, based on years of service. We provide twice-yearly Extra Checks (bonuses) for long-tenured hourly employees. We believe our paid sick, vacation and leave policies for hourly employees are very competitive by retail standards. We have adopted operational practices designed to benefit our hourly workforce, such as a 50% full-time ratio, guarantees of minimum scheduled hours and weekly schedules posted at least two weeks in advance.

In response to the COVID-19 pandemic and its associated challenges, we began providing premium pay to all hourly employees in March 2020 and continued for a full year through February 2021, at which time a portion of the premium was built permanently into our hourly wage scales in the U.S. In fall 2020, we also began offering employees additional paid time off to attend to child care and schooling needs through the 2021 school year.

As a business deemed to be essential during the COVID-19 pandemic, Costco expanded its seasonal period, adding over 17,000 employees to the U.S. workforce between March and August 2020.

Our worldwide policies and practices are designed to mirror our practices in the U.S., subject to local regulations, customs and market conditions.

For salaried management in our locations, as well as positions in the corporate and regional offices, we also seek to provide competitive compensation and benefits. In recognition of their impact on Costco's success, Costco implemented an annual Extra Check program for mid-level managers in 2019 with the first payout taking place in September 2020. Although many salaried employees might be able to find higher compensation or better perks at other companies, our retention rates, particularly for longer-term Costco employees, are very high. We believe our competitive compensation and benefits, opportunities for growth and advancement, and the stability and culture of the company drive our strong retention rates.

WORKFORCE TENURE & DEVELOPMENT

In the U.S., our employees average over nine years of service with the company. Over 60% of U.S. employees have five or more years with Costco, and over one-third have more than 10 years. Costco also has long-tenured workforces elsewhere, particularly in more mature markets in Canada, the UK, Mexico and parts of Asia. Worldwide, we have over 17,000 employees that have more than 25 years of Costco service. We feel the experience level and loyalty of our employees gives us a significant advantage.

A related advantage comes from our philosophy and practice of promoting from within our employee ranks. We are proud of the fact that over 70% of our warehouse managers worldwide began their Costco careers in hourly positions. In addition, a majority of our corporate and regional office employees started in our warehouses, depots, and business centers.

We have student retention programs available worldwide that allow our warehouse employees to maintain their employment status while attending college.

We have a voluntary program, Journeys For All, which offers all employees opportunities to succeed through education, mentoring and connection.

We’re developing a new Merchandising Recruitment and Employee Development team. Their main responsibility is to optimize talent from our warehouses, depots, and all other operational units for the Home and Regional Offices. The team will educate employees on the roles in Buying, and will support employee onboarding and development. We believe that different perspectives, as well as operational knowledge, will be good for both our Buying teams and warehouse employees.

We have a 12-week program designed to provide supervisor-level merchandising training to management without merchandising experience. Merchandising is an important element of the competencies required of a warehouse general manager, a key position at Costco. We also updated and expanded the opportunities within our current supervisor-in-training program for hourly employees. These programs resulted in a larger candidate pool, increased diversity in applicants and increased employee engagement.

Introduction

Our Code of Ethics makes clear our commitment to take care of our employees. It has always been Costco policy that employees deserve an environment free from all forms of unlawful employment discrimination. All decisions regarding recruiting, hiring, promotion, assignment, training, termination, and other terms and conditions of employment will be made without unlawful discrimination on the basis of race, color, national origin, ancestry, sex, sexual orientation, gender identity or expression, religion, age, pregnancy, disability, work-related injury, covered military or veteran status, political ideology or expression, genetic information, marital status, or any other protected status.

Our work on diversity and inclusion is not new, but it continues with increased emphasis. Costco’s philosophy of creating an inclusive and respectful workplace is part of our culture to ensure that everyone feels included and respected in all aspects of our business. We know that embracing differences is important to the growth of our company as it leads to opportunities, innovation and employee satisfaction.

Awareness, Training and Education

The events of 2020 gave us the opportunity to evaluate where we are and how we can be even better. Among other things, we committed to additional training for managers on race, bias, and equity, and greater visibility of our employee demographics. We also provided educational resources to support management on engaging in inclusive conversations. We continue to provide training in anti-harassment, anti-discrimination and anti-retaliation.

Diversity at Costco

Our workforce is representative of the communities where we do business. We closely monitor demographic data at all levels across the organization, as an element of tracking our progress.

Among Costco’s global workforce, 54.0% identify as male and 46.0% as female. In Supervisor/Manager positions in our global operations, 63.6% identify as male and 36.4% as female. For purposes of this year’s reporting, “Supervisors/Managers” does not include employees working in our corporate and regional offices and pharmacies.

Gender and Race/Ethnicity Demographics - U.S.:

In the U.S., in FY21, 55.1% of non-management employees identify as male, and 44.9% as female. Of employees meeting the EEO definition of "management," 66.5% identify as male, 33.5% as female.

In the U.S. in FY21, 47.3% non-management employees identify as White, 30.6% as Hispanic or Latino, 9.4% as Black or African American, 8.1% as Asian and 4.6% as Other. Of employees meeting the EEO definition of "management," 61.0% identify as White, 21.0% as Hispanic or Latino, 8.2% as Black or African American, 6.6% as Asian and 3.2% as Other.