The Trader Joe’s Model for Employee Retention

CEOs take note: Not every company fits the Trader Joe’s model, but some observers suggest that it offers many easy-to-implement ideas: break goals down into smaller, sub goals; celebrate the accomplishment of small goals loudly and joyously; actively solicit and put into effect employee ideas for improvement.

“Everything not only moves faster, it happens in shorter, more condensed bursts,” notes Dr. Noelle Nelson, a career and workplace expert and author of Make More Money By Making Your Employees Happy. “Video and computer games are fast, intense, and over quickly. Texts and tweets have replaced phone conversations as well as lengthy emails, and emails long ago replaced most snail mail. No wonder younger generations of workers are bored and are quick to leave jobs that aren’t stimulating.”

According to a study by Millennial Branding, a Gen Y research and consulting firm, 85 percent of companies say it costs between $15,000 and $25,000 to replace a millennial employee (born in 1981 or after) that they lose. Of those companies surveyed, about 40 percent employed 50 or more millennial workers. “Considering that data shows over 60 percent of millennials stay at their jobs less than three years, retaining younger employers is a real challenge and will continue to be a challenge as older workers, who typically stay longer at jobs, retire,” notes Nelson.

The study showed that companies are putting retention programs in place in the workplace by offering flexibility options and mentoring programs. “For millennials, so much of the way work is structured is the opposite of how the rest of their life goes,” explains Nelson. She advises employers to take a page from companies that have learned how to make work more interesting with some simple, easy to implement, changes.

“Trader Joe’s, a chain of specialty grocery stores, rotates its workers, such that each worker staffs a position for only one hour at a time. So, for example, any given worker will man a cashier stand, stock shelves and return shopping carts in the course of an ordinary morning,” says Nelson. “Not only does this alleviate the tedium standing behind a check stand for eight hours would engender, it means that every worker knows every aspect of the store. Every worker is able to help with whatever department is most in need at a moment’s notice. And every worker knows every product throughout the store.”

“Companies need to jettison 20th Century operating procedures and adopt 21st Century ways of doing business,” says Nelson. “Today’s workers bring a different set of experiences, talents and expectations to a job. As an employer, it’s your responsibility to bring out the best of your workers. If you do, they’ll be more productive and remain loyal—qualities that will make an impact on profits.”



Chief Executive magazine (published since 1977) is the definitive source that CEOs turn to for insight and ideas that help increase their effectiveness and grow their business. Chief Executive Group also produces e-newsletters and online content at and manages Chief Executive Network and other executive peer groups, as well as conferences and roundtables that enable top corporate officers to discuss key subjects and share their experiences within a community of peers. Chief Executive facilitates the annual “CEO of the Year,” a prestigious honor bestowed upon an outstanding corporate leader, nominated and selected by a group of peers, and is known throughout the U.S. and elsewhere for its annual ranking of Best & Worst States for Business. Visit for more information.