The Container Store's $50,000 Retail Staff

As stores and restaurants ramp up for the Christmas season, the eye is naturally on the bottom line. And even though the National Retail Federation is forecasting a bumper sales record, Kip Tindell, CEO of the Container Store, has a message for the fast-food industry: Pay your employees well, very well, and they will return it in profits.

His concept isn’t new. Costco, Trader Joes and the Gap have all listed the benefits of paying their workers a living wage.

But Tindell’s approach, which he has detailed in the book "Uncontainable," goes far beyond that initiative, since he effectively pays them more than twice the national median salary. According to ThinkProgress, sales staff at the Container Store earn around $48,000 a year, rather than the median salary of $21,410.

“[One] great person can match the business productivity of three good people ,” Tindell explained in an article for Inc. It’s a strategy that has defied the common American ethic of paying low for jobs that are perceived to be entry level, such as restaurant servers, stocking clerks and sales representatives in large department stores.

But Tindell maintains that by paying staff what they need to not only survive but maintain a career, they will see their employment as just that: something they will work hard to keep and excel at. He calls this approach the “one equals three” strategy: Pay the employee well and she’ll do the work of three. The idea that manual laborers are “a dime a dozen” is out-done by the profits that are earned by not having to hire as many employees to do the same job, or having to spend valuable dollars on recruitment of new employees.

Tindell has a number of other strategies that fly in the face of convention as well, like never laying off staff to solve a fiscal challenge. According to Tindell, the 36-year-old company has never laid off staff to cut costs. He solved recessionary loses by doing things like freezing the 401K matches and raises. It sent a message to the staff that while rocky times might be ahead, their jobs were safe. They remained committed to the business, not critical of its ability to make a profit from all of their hard work.

He’s also a big proponent of hiring women for jobs that have historically been just below the glass ceiling. He isn’t abashed in giving his reasons, either.

“I think women make better executives than men,” he told Business Insider, chalking their prowess up to “emotional intelligence.” [That] skillset — communication, empathy, emotional intelligence, understanding what we stand for…and being like our target customer — really fits the bill with women,” he explained.

With about 70 percent of The Container Store’s management positions held by women, that’s news that researchers would be really interested in hearing. Previous studies have shown that women often get the pass when it comes to promotions.

Admittedly, I find myself squirming at those comments. It's no doubt they would likely cause an uproar if it were men, not women, who were being given the compliment.

Just the same, his contributions to breaking that glass ceiling and transforming retail marketing values have been considerable. They have also won him plenty of awards, starting with Earnst & Young’s Entrepreneur of the Year award in 1991 and the National Retail Federation’s Gold Award in 2010.

His Seven Foundation Principles, which he outlined in an interview with Forbes,  as well as several other venues, say just about all there is to know about why paying his sales staff more than twice the national average works. It isn’t just that they can earn a fair wage. They earn respect as well.

1. One Great Person = Three Good People


2. Communication is Leadership


3. Fill the other guy’s basket to the brim. Making money then becomes an easy proposition.


4. The Best Selection, Service & Price.


5. Intuition does not come to an unprepared mind. You need to train before it happens.


6. Man In The Desert Selling


7. Air of Excitement

Not surprisingly, Tindell's fundamental principles are great guideposts not just for retail sales, but human nature.

Image credit: Dave Dugdale