IKEA Invests £35 Million in UK Co-workers' Financial Wellbeing Amidst Market Challenges

In a bold move to prioritise the financial stability and welfare of its employees, IKEA has announced an impressive investment exceeding £35 million in the United Kingdom.

This substantial commitment encompasses various initiatives aimed at improving the lives of its co-workers, aligning with the company's ethos of fair compensation and support.

The heart of this investment revolves around a comprehensive strategy that involves both immediate pay increases and year-end bonuses. Acknowledging the escalating cost of living, IKEA has taken a proactive stance by implementing significant pay hikes.

Hourly paid co-workers are slated to receive an impressive 10 per cent increase in 2024, a clear demonstration of the company's dedication to offering a fair and sustainable wage. Complementing this, salaried co-workers are set to enjoy a commendable 5 per cent rise on average, constituting an overall investment of nearly £10 million.

Furthermore, IKEA's commitment to recognising and appreciating its employees extends to the One IKEA Bonus program. Eligible co-workers are in line to receive a year-end bonus equivalent to at least a month's pay, a timely gesture of gratitude for their invaluable contributions to the company's robust performance during the challenging market conditions of FY23. This bonus pot, totalling an impressive £25.6 million, underlines IKEA's appreciation for its workforce.

Emphasising its dedication to equitable wages, IKEA proudly stands as the largest accredited Living Wage Foundation retailer. It's committed to not just meeting but exceeding the government-recommended National Living Wage (NLW) by pledging to uphold the new Real Living Wage (RLW). This translates to hourly-paid co-workers in London receiving an impressive £13.15 per hour, while those elsewhere in the UK will earn £12.00 hourly.

Taking their commitment a step further, IKEA has introduced an 'outer London' rate for over 1,300 co-workers based in specific regions, elevating their hourly wages from £11.45 to £12.60 in 2024. This move serves to surpass Living Wage Foundation rates in these areas, demonstrating IKEA's intent to not just meet but exceed industry standards.

Once the planned wage adjustments are fully implemented, the impact will be substantial. Full-time co-workers outside of London will earn £1,136 more annually than those on the government-recommended NLW. Meanwhile, individuals in the 'outer London' range will see a notable increase of £2,352, and those in London, subject to the region-specific RLW, will experience a substantial boost of £3,468 annually.

This recent announcement builds upon IKEA's previous investments in January 2023, where they allocated £12 million towards an approximate 6 per cent pay raise and an enhanced benefits package.

Darren Taylor, IKEA UK & Ireland's Country People & Culture Manager, underscored their commitment, stating: "We've always been committed to caring for our co-workers, particularly during challenging times." Taylor emphasised IKEA's vision to ensure their employees feel supported and valued, contributing to their financial, mental and physical well-being.

IKEA's dedication to its employees extends beyond financial measures. The company operates the TACK loyalty scheme, expressing gratitude to employees by supplementing their pension funds after five years of service, reinforcing their appreciation for loyalty and dedication.

This significant investment in the UK comes on the heels of IKEA's global expansion plans. Earlier in the year, the company announced plans to invest over $1 billion in France and unveiled a substantial $2.2 billion expansion initiative in the United States.