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Ikea Australia Brings In Sweeping Measures To Stem Costly Employee Turnover

Ikea Australia

Ikea Australia has moved to close the gender pay gap, revise super payments on unpaid parental leave and offere the opportunity for any retail store co-worker to work on a fixed roster – all in a bid to retain its employees.

As Bloomberg reported, Ikea’s workers were previously quitting in large numbers in the US, while in the UK and Ireland, half of all new hires were leaving before their first anniversary. By 2022, more than 62,000 employees were departing each year.

Globally, each departure cost Ikea A$7,521 to replace.

Privately held Ikea, whose 473 stores in 63 markets employ nearly 200,000 people, historically lost fewer workers than many of its industry peers.

However, from a coalition of unions accusing local Ikea managers of quashing organising efforts at stores in the US, Ireland and Portugal back in 2018, to unhappiness that in Poland a wage hike was pegged below the rate of inflation and claims from workers in South Korea who unionized that they received subpar treatment compared with their peers in other countries, Ikea’s employee-friendly image took a beating around the world.

Boosting pay, increasing flexibility for frontline employees and using emerging technologies to make things easier on workers and their customers were some of the measures that Ikea took to stem the exodus.

Ikea began to actively move towards retaining staff globally. Globally, across the parent company Inter Ikea Group’s more than 600 stores and warehouses, the quit rate fell to 17.5 per cent in April from 22.4 per cent in August 2022.

Here in Australia, in February this year, Ikea released a statement regarding its employee-focussed measures. It noted that the Ikea Australia median gender pay gap is 6.1 per cent, significantly below the national average.

As of February this year, 52.9 per cent of the total IKEA Australia workforce were women, while 47 per cent of all manager roles across the business were held by women (above the national average of 42 per cent).

It also has made available its parental leave policy from the first day of employment, meaning there is no minimum tenure limiting access to those benefits. “Up to 26 weeks paid leave is available for all co-workers, regardless of family formation, and superannuation will now be paid on any unpaid parental leave a co-worker elects to take – up to 26 weeks,” it said in a statement.

Ikea Australia added that it has also made it possible for any retail store co-worker to work on a fixed roster. “We recognise the imbalance that exists with women primarily carrying the burden of childcare, and believe offering fixed rosters releases a barrier for women with families considering retail as a career, and gaining financial independence through that career. All co-workers within IKEA Australia can request a Flexible Work Arrangement to better manage their work/life balance in a healthy way. This can include hours of work, start and finish times, patterns of work or changes in normal work location.”

It noted that as part of its Family Friendly Workplace Action Plan, it is also encouraging men to access flexible work arrangements and leave entitlements “to normalise men increasing their caring responsibilities, help change the narrative around accepted gender norms and further reduce our gender pay gap.”



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