Ikea was losing 60,000 employees a year. Here’s how the retailer worked to fix its staff turnover problem.

Ikea was losing 60,000 employees a year. Here’s how the retailer worked to fix its staff turnover problem.
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An Ikea storefront in China.
An Ikea store in China.

  • Ikea was facing soaring employee turnover rates coming out of the pandemic.
  • Executives at the Swedish furniture company set about trying to keep employees happy enough to stay.
  • The company bumped wages, offered more flexibility, and simplified workflows, according to Bloomberg. 

Ikea tackled sky-high employee turnover rates by increasing wages, offering more flexibility, and simplifying staff workflow — seemingly simple changes that have made a world of difference for the Swedish furniture retailer, according to a recent Bloomberg report.

Every time an Ikea employee left the furniture magnate, the company lost $5,000 or more, according to the outlet. Amid a worsening wave of workers quitting in recent years, Ikea executives set about trying to keep workers happy and employed.

Retail has always had higher quit rates than many other industries due to difficult working conditions, unpredictable scheduling, and low pay. However, the COVID-19 pandemic and increasing inflation have only exacerbated the problem in recent years. 

By 2022, Ikea was losing about 62,000 workers each year for various reasons — nearly one-third of its workforce, Bloomberg reported. The mounting conflict between the company and a coalition of unions had also left morale low across many of Ikea’s 473 stores worldwide, according to the outlet. 

Jon Abrahamsson Ring, chief executive of Inter Ikea Group — the overhead entity in charge of Ikea’s product design and supply chain — told Bloomberg that retention was a high priority when he stepped into the CEO role in September 2020. Turnover rates were hovering above 30% in stores across the US, UK, and Canada, while employees in India regularly left the company after having children because of lackluster benefits, he told the outlet. 

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In trying to fix its quitting problem, Ikea went full-steam ahead in addressing the most important issues to workers, Ring told the outlet, including better pay, more flexibility for employees, and integrating new technologies to make employees’ jobs easier. 

It paid off: Ikea’s global quit rate fell from 22.4% in August 2022 to 17.5% in April 2024, Bloomberg reported. In the US alone, voluntary turnover dropped from about a third of employees in 2022 to about a fourth one year later, according to the outlet.

Prioritizing employee wants and needs is a key way to make people stay, Business Insider previously reported. A recent study also found that companies offering robust childcare benefits see increased employee productivity and positive returns on investment. 

Ikea’s fixes, while major, aren’t perfect. Turnover at Ikea stores in Japan is up due to a tight labor market, while labor disputes in France have kept quit rates high, Bloomberg reported. 

But the still-rising rates of attrition in the retail sector suggest Ikea has begun to make real change on the turnover front.

Read the original article on Business Insider

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