case study: employer branding at IKEA.

Discover what makes IKEA stand out as one of the most attractive companies to work for. Every company can learn from IKEA's employer branding.

IKEA: home is where the heart is

Some people are put off working in retail because of its reputation (fair or unfair) for low pay and unsocial hours. Yet home furnishing giant, IKEA, stands out as one of the most attractive companies of any sector to work for. Lars-Erik Fridolfsson, Talent Manager, IKEA Sweden Retail, believes that the key strength of the group’s employer brand is a shared passion for home furnishing and how this can contribute to “creating a better life for the many”. As IKEA continues its rapid growth and moves into new markets, how is it looking to sustain the ideals that are so crucial to its talent appeal?

IKEA was founded in 1943 by the then-17-year-old Ingvar Kamprad, whose initials make up the ‘I’ and the ‘K’ in the company’s name – the ‘E’ comes from Elmtaryd, the farm he grew up in, and the ‘A’ from Agunnaryd, his home town. In the 70 years since, IKEA’s combination of form, functionality, quality, sustainability and affordability – what it calls ‘democratic design’ – has helped it to become the world’s biggest furniture chain, operating in more than 300 stores and employing over 150,000 staff (referred to as ‘co-workers’) in 27 countries worldwide.

“We don’t just want to be a company that sells things and where success is defined by sales figures alone,” says Lars-Erik Fridolfsson. “By helping our customers to make a good home, we can help to improve their everyday lives.”

The democratic design principles at the heart of IKEA’s mission are also the values that define its employer brand. “Values and attitude are more important than the CV,” says Mr Fridolfsson. “One of the advantages we have in seeking out recruits who share our ideals is that most people can relate to the importance of a good home in creating a better life. As part of our selection process, we encourage candidates to come to the interview with a photo of their living room and ask them to talk about what they like about the room and what inspires them. From these conversations you can quickly identify people who have a real passion for home furnishing and good design, and how they can make a difference to our customers’ lives – these are the co-workers we want and the co-workers who can grow together with us.”

return on investment

Once on board, IKEA recognizes the importance of investing in its co-workers. IKEA constantly tries to improve the working conditions and the total package of remuneration. IKEA’s focus on co-worker welfare is evident in the fact that it was the first retailer in the UK to commit to paying the ‘Living Wage’, a higher amount than the statutory minimum wage, which is independently set to reflect the cost of living. In Sweden, it has opted not to use ‘on call employment’ contracts as it wants to ensure that co-workers have guaranteed minimum hours of work.

IKEA is also determined to ensure that co-workers can fulfill their individual potential. “Everyone has something that they’re particularly good at. We want co-workers and their managers to identify what that special strength is. Managers can then assign the right training and ensure co-workers have maximum opportunity to develop these skills within their work – the more they do, the more we’ll support it,” says Mr Fridolfsson. “We encourage our co-workers to tell their career stories during our annual talent week and through our website, which helps to inspire others of what’s possible.”

It’s a winning formula. IKEA was voted the company people in Sweden most want to work for in the Randstad Awards 2015, ahead of Sveriges Television and the Volvo Car Group in second and third. The motivation and satisfaction within the workforce helps to sustain above average retention and strong corporate growth. And the more IKEA grows, the more it sells, and the more it sells, the more it’s able to hold down and even reduce prices.

faith in the IKEA way

And as growth within the business continues to accelerate, IKEA’s talent strategy and the employer brand that underpins it are going to be more important than ever. 

“If I’m asked why we focus so closely on employer brand, the answer is simple – we need to hire an additional 75,000 people over the next four years to sustain our expansion plans. And it’s not just numbers we need. We need people we can fast track to leadership positions. We want people who share our values and who can appreciate the way we do things,” says Mr Fridolfsson. “Our informal approach can seem quite alien in countries that tend to be more hierarchical than Sweden. While we fully respect different cultures, we want to maintain ‘our way’ as much as possible. So if someone at a management interview says ‘will I get my own office’, we have to politely say ‘no, you’ll sit with your co-workers’. We also expect managers to spend time working in the store so they can get a better idea about what customers want, the challenges co-workers face and, ultimately, where the money that pays their salaries comes from. A lot of people find our approach quite refreshing, even if it’s not what they’re used to – co-workers have more of a say and managers enjoy the sense of togetherness.”

the new face of retail

“Worldwide, we also need to keep pace with shifts in technology and customer expectations,” says Mr Fridolfsson. “As more of our repeat and basic product sales gravitate to our digital channels, our stores will increasingly become knowledge centers. Customers come in with an idea about what kind of look and feel they want for their bedroom or kitchen. They look to our co-workers for advice on how to turn these ideas into reality. What are the options available? How does this fit with the available space and budget? This kind of active selling is a specialized skill, which takes experience, engagement and deep product knowledge. The need to develop these capabilities underlines why investing in our co-workers is so important, but it also offers them more interesting and rewarding work.”

daring to be different

So what can other companies learn from IKEA? Even relatively low-skilled work requires meaning. IKEA thrives because its co-workers know they can develop as people and contribute to a better life for their customers. IKEA is also prepared to stand up for its values and ways of doing things, even if this means sailing against the wind. These distinctive qualities have always been important in helping the company to attract the people it wants. And they will be even more important as digitization changes what’s expected from retail staff. While they’re likely to spend less time on stacking, picking and taking payment, the importance of their product knowledge and ability to project the brand will increase. This requires people who are motivated, quick to learn and prepared to commit to a company for the long-term. By investing in staff and giving them a compelling mission, IKEA is going to have a critical edge in attracting and retaining these high value employees.

employer branding at IKEA

Globally, retail was ranked 14 out of 15 in the sectors respondents would like to work in. But in Sweden, retail is fourth, reflecting the high regard with which a number of leading Swedish retail groups, including IKEA, H&M and ICA, are held. IKEA was the most attractive and admired employer in the Randstad Award Survey 2015 & 2016 across all sectors in Sweden, its home market. It was ranked number one for strong leadership, environmental and social awareness, good training and development, job security, financial strength, pleasant working environment and a good work-life balance.