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  /  World News   /  Ikea stems employee exodus by raising pay, increasing flexibility

Ikea stems employee exodus by raising pay, increasing flexibility

(NewsNation) — Facing an employee exodus costing millions, Swedish furniture giant Ikea moved to boost wages, increase flexibility for workers and employ new technologies to improve retention and recruitment, Bloomberg reported.

Globally across Ikea’s more than 600 stores and warehouses, the quit rate fell to 17.5% in April from 22.4% in August 2022. And each employee departure was costing Ikea $5,000 or more in replacement and retraining costs, according to Bloomberg.

The U.S. retail quit rate is more than 70% higher than other industries, according to a 2022 McKinsey report that said half of retail workers want to leave.

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Ikea historically had lower turnover than peers, thanks to a worker-friendly culture. However, managing a global workforce where work-life balance is now mandatory became challenging.

In 2018, unions accused Ikea of quashing organizing efforts. After worker protests, Ikea agreed to let workers unionize though disputes remain over union access.

The pandemic exacerbated retention woes as stores became online fulfillment centers and supply snags led to more frustrated customers taking out their emotions on workers.

To retain employees, Ikea raised wages, closed gender pay gaps and enhanced child care benefits. It streamlined shift swapping so workers could more easily adjust schedules, according to Bloomberg.

An AI tool analyzes data to flag situations that could lead to an employee quitting so managers can be proactive.