IKEA Solved Its 'Unhappy Worker' Crisis With 3 Simple Changes That More Companies Should Follow
When you make people's lives easier, they're much happier at work.
Nambawan / Shutterstock When staff is unhappy, business leaders and bosses often scratch their heads trying to figure out what's gone wrong. They commission studies, send out surveys, and hold meetings to try to understand why workers are so disgruntled.
Which is silly because it's often incredibly simple — just make their lives easier. Case in point: IKEA, a company that had a major employee morale issue on its hands and found an obvious solution.
IKEA solved its 'unhappy worker crisis' by making 3 very simple changes.
IKEA has been in a full-blown panic about worker retention in recent years — employees in the U.S. were quitting en masse, and in the U.K. and Ireland half of all new hires stayed less than a year.
An internal report found that they were bleeding about 62,000 employees a year worldwide. With the average cost of replacing a worker at $5,000 a head, all this turnover was costing them an absolute fortune.
Nothing speaks to business leaders like money, and it suddenly became clear that the company's approach needed to change immediately.
The unhappy worker crisis followed years of IKEA ignoring complaints and engaging in union-busting.
IKEA had essentially dug its own grave for years. Workers had long been speaking up about working conditions, especially in stores outside the Sweden-based retailer's home turf in Scandinavia, with its much more accommodating work culture.
In 2018, a coalition of unions filed a report accusing IKEA of union-busting, saying the company engaged in intimidation and subjected workers to interrogations by management over their organizing efforts.
Before long, IKEA workers all over the world were revolting, including those in Poland, South Korea, and the U.S., and mass resignations began. Then, the pandemic hit and made everything exponentially worse.
For the record, IKEA's approach to unionization efforts has not entirely improved — while they backed off in other parts of the world last year, they have still refused to allow union reps into stores in the U.S.
But what they did do was take the crisis seriously and finally respond with the kind of dead-obvious solutions that most companies patently ignore: IKEA simply gave its employees what they wanted and made their lives easier.
IKEA solved its unhappy worker crisis with 3 simple solutions: raising pay, increasing flexibility, and subsidizing childcare.
When IKEA came under the management of a new CEO, Jon Abrahamsson Ring, in 2020, the company identified several key trends that seemed to be fueling its massive employee retention issues.
In some countries, people quit because scheduling and swapping shifts was so cumbersome and conflict-ridden. In others, employees quit when they had children because of the company's dearth of benefits for parents. And, of course, with the way the pandemic impacted wages in so many jobs, many bailed to go work other jobs that suddenly paid better.
IKEA began addressing all of the above, raising wages in nearly all stores, including bonuses, and addressing gender pay gaps. It also began taking the cost of living into account when setting wages in certain high-cost areas, like London.
It made employees' work lives easier by implementing tech solutions that streamline processes like scheduling, swapping shifts, training and onboarding, and employee communications. IKEA has also given some staff the option to work from home and field customer service calls. Even the uniforms have been streamlined.
In India, where childcare concerns were the biggest factor fueling resignations, the company has begun subsidizing childcare costs for employees, offering parental leave, and ensuring a five-day work week rather than six, the standard in Indian retail jobs.
The company still has a long way to go, and it should start by implementing all of these changes and benefits in all stores for all employees worldwide — especially here in the U.S., where worker protections are nearly non-existent and childcare affordability is a full-on crisis our government leaders have proven they have no will to tackle.
Regardless, IKEA's new approach has seen results, and it sends a clear message to business leaders: Treat your employees like people, take their needs seriously, and you just might find that revolving door starts revolving a lot more slowly, saving you money in the process.
John Sundholm is a news and entertainment writer who covers pop culture, social justice, and human interest topics.