- IKEA has been facing a steep rise in employee turnover as it emerges from the pandemic.
- Executives at a Swedish furniture company began trying to make sure their employees were satisfied enough to stay with the company.
- According to Bloomberg, the company has increased wages, added flexibility, and streamlined workflows.
As recently reported by Bloomberg, IKEA has addressed skyrocketing employee turnover by raising wages, increasing flexibility, and streamlining staff workflows — seemingly simple changes that have resulted in big changes for the Swedish furniture retailer.
The media reported that every time an employee quits at furniture giant IKEA, the company loses more than $5,000. IKEA executives have been working to keep employees happy and employed after a wave of employee resignations in recent years.
Retail has always had higher turnover than many other industries due to tough working conditions, unpredictable schedules, and low wages, but the problem has been exacerbated in recent years by the COVID-19 pandemic and rising inflation.
According to Bloomberg, IKEA will lose around 62,000 employees each year by 2022 for a variety of reasons, nearly a third of its workforce, and a growing conflict between the company and a coalition of labor unions has also led to low morale in many of IKEA's 473 stores around the world.
John Abrahamson Ring, CEO of InterIKEA Group, the indirect unit responsible for IKEA's product design and supply chain, told Bloomberg that retaining employees was a top priority when he took over in September 2020. He said that attrition rates exceed 30% at stores in the U.S., U.K. and Canada, and that in India, employees regularly quit after having children due to poor employee benefits.
In addressing the departures issue, Ring told the outlet, IKEA has focused on the issues that matter most to employees, including raising wages, giving workers more flexibility and introducing new technology to make their jobs easier.
As a result, Bloomberg reports that IKEA's global turnover rate fell from 22.4% in August 2022 to 17.5% in April 2024. In the U.S. alone, voluntary resignations fell from about a third of employees in 2022 to about a quarter a year later, the outlet reported.
Prioritizing employee wants and needs is a key way to retain talent, Business Insider previously reported, and a recent study also found that companies that offer generous child care benefits see increased employee productivity and a positive return on investment.
While IKEA's reforms are ambitious, they are not perfect: Bloomberg reported that turnover at IKEA stores in Japan has risen amid a tight labor market, while in France turnover remains high amid labor unrest.
But turnover is still trending upwards in the retail industry, suggesting IKEA is starting to make real changes on this front.
