IKEA is investing over £35 million in the financial wellbeing of its co-workers 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 co-workers will receive a 10% increase in 2024*, with salaried co-workers receiving a rise of 5% on average; together representing an investment of almost £10m.
Through the One IKEA Bonus programme, eligible co-workers 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 co-workers’ important contribution to IKEA’s strong business performance in FY23, despite challenging market conditions.
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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 co-workers 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 1,300 co-workers 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 co-workers outside of London are set to earn £1,136 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 £2,352 more and co-workers in London on the region-specific RLW will receive £3,468 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 & Culture Manager, IKEA UK & Ireland: “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 co-workers 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, as a thank you for their loyalty and commitment.
