IKEA is investing over £35m in the financial wellbeing of its staff across the UK through a combination of pay increases that reflect the true cost of living, as well as year-end bonuses based on the retailer’s FY23 performance.
In line with IKEA’s commitment to offer a fair and sustainable rate of pay, hourly-paid staff will receive a +10% increase in 2024, with salaried staff receiving a rise of +5% on average – together representing an investment of almost £10m.
Through the One IKEA Bonus programme, eligible employees across the UK will receive a year-end bonus of at least a month’s pay in time for Christmas. The £25.6m bonus pot recognises their contribution to IKEA’s strong business performance in FY23, despite challenging market conditions.
As the largest accredited Living Wage Foundation retailer, IKEA has pledged to meet the new Real Living Wage (RLW) - a voluntary rate paid by employers who choose to go beyond the Government-recommended National Living Wage (NLW). To that end, hourly-paid staff in London will receive the new rate of £13.15, and £12.00 for employees throughout the rest of the UK.
Last year, the retailer also introduced an ‘outer London’ rate for over 1300 emplyees based in its Lakeside, Reading and Milton Keynes stores, which will increase from £11.45 per hour to £12.60 in 2024, exceeding Living Wage Foundation rates in these regions.
Once fully implemented, full-time IKEA staff outside of London are set to earn £1136 a year more than those on the Government's new National Living Wage (NLW), while those in the new outer London range (Lakeside, Reading and Milton Keynes) will earn £2352 more and staff in London on the region-specific RLW will receive £3468 more a year.
This announcement follows a £12m investment in January 2023 that included an on average +6% pay increase and an enhanced benefits package to support employees during the cost of living crisis.
Darren Taylor, country people and culture manager, IKEA UK & Ireland, says: “At IKEA, we’ve always been committed to caring for our co-workers, particularly during challenging times, which is why we’re announcing further investment to enhance their financial stability and security.
"Although we see inflation starting to ease, the cost of living continues to have a very real impact. We recognise that when our co-workers grow, so does IKEA, and our aim is to ensure that co-workers feel supported and valued through a variety of benefits that contribute to their financial, mental and physical wellbeing – supporting our vision to create a better everyday life for the many people.”
IKEA also rewards staff through its loyalty scheme, TACK (meaning ‘thank you’ in Swedish), which provides employees with extra payments to their pension funds after five years with the company.