Ikea is investing more than £35 million in pay and bonuses for its UK workforce.
The retailer intends to boost the financial wellbeing of its staff by offering wage increases that are in line with the cost of living and year-end bonuses that reflect the company’s performance throughout 2023.
Hourly-paid employees will benefit from a 10% rise next year, which Ikea says is in line with its “commitment to offer a fair and sustainable rate of pay”, while salaried staff will gain an average increase of 5%, representing a combined investment of nearly £10m.
Additionally, the One Ikea Bonus scheme allows eligible UK workers to receive a year-end minimum bonus of a month’s wages before Christmas.
According to the company, its £25.6m bonus pot “recognises co-workers’ important contribution to Ikea’s strong business performance in FY23, despite challenging market conditions”.
The business, which is the largest living wage accredited retailer, has also pledged to pay employees the new real living wage rate of £13.15 in London and £12 across the rest of the UK.
Last year, it also launched an ‘outer London’ hourly rate for more than 1,300 staff at its Lakeside, Reading and Milton Keynes sites, which will rise from £11.45 to £12.60 next year, exceeding the rates set by the Living Wage Foundation.
The latest announcement follows January 2023’s £12m investment which included an average pay rise of 65% and an enhanced benefits offering to support the workforce throughout the cost-of-living crisis.
Darren Taylor, country people and culture manager, Ikea UK & Ireland, said: “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’s loyalty scheme, TACK, also provides extra pay towards employees’ pension pots for after five years of employment in recognition of their commitment and loyalty.