Ikea’s Voluntary Pay Raise Experiment Deemed a Success

This photo taken Wednesday, June 3, 2015, shows an IKEA store in Miami. (AP Photo/Alan Diaz)
This photo taken Wednesday, June 3, 2015, shows an IKEA store in Miami. (AP Photo/Alan Diaz)

June  25, 2015– In March of 2015 this forum reported that regardless of the contentious minimum wage battles that have been plaguing the City, State, and Federal governments this year that some major corporate employers were voluntarily implementing pay increases for their hourly workers. (http://newyorkovertimelaw.com/blog/10-companies-that-have-vowed-to-raise-their-minimum-wage/)  Ikea, the furniture giant,  was one of the employers on that list.  The preliminary results of their voluntary wage experiment have been examined and what they reveal is dramatic and enlightening.

Ikea’s Chief Financial Officer, Rob Olson, has announced that as a result of the positive consequences of their voluntary wage increases that they intend to implement a second round of such wage hikes.   Ikea’s pay increase structure was based upon the relative cost of living in the various jurisdictions where it maintained stores.  Stores where the cost of living was the highest implemented more aggressive increases, creating greater financial parity among its U.S. Employees.

Olson made the announcement after summarizing what Ikea saw as the noticeable benefits to their company following the  implementation of the increase.   The first was a dramatic decrease in employee turnover from prior to the increase.  This factor alone reduced the company’s spending on the recruitment and training of new employees, whereby, balancing the cost increases of higher salaries.  Perhaps less tangible but, maybe, more significant was what Olson cited as the ability to recruit more qualified candidates for open positions.   The increase resulted in a noticeable increase in the hiring of more qualified applicants, which resulted in better employees, according to Olson.

So, while others debate the positive and negative consequences of wage increases and their impact on corporate employers Ikea seems to have settled the question as to whether major employers can sustain the impact of wage increases for their lowest earners.  They, clearly, can.

To view the entire article: http://www.huffingtonpost.com/2015/06/24/ikea-minimum-wage_n_7648804.html

10 Companies That Have Vowed To Raise Their Minimum Wage

(SAUL LOEB/AFP/Getty Images)
(SAUL LOEB/AFP/Getty Images)

March 5, 2015– As Congress and many State legislatures are busy debating the merits of increases in the minimum wage for working families, at least 10 major corporate employers have committed to voluntarily raise their employees’ baseline pay from the Federal minimum standard.  Some skeptics might argue that this commitment stems from large scale protests by employees that are working full time jobs but are still unable to survive economically without the aid of public assistance.

The companies, however, have expressed the desire to improve their customer experience through making employees feel more invested in the corporate culture and the success of the organization as a whole.  They see wage empowerment as a tool to achieving that goal.

Regardless of the reasons behind the decision, the impact will be to increase the wages, and discretionary income, of a significant number of U.S. workers because of the sizable market share of each of the companies involved.

The companies include:

1.  Walmart

2.  T.J. Maxx

3.  Starbucks

4.  Ikea

5.  Gap, Inc.

6.  Costco

7.  In-N-Out Burger

8.  Shake Shack

9.  Ben N. Jerry’s

10. Whole Foods

 

To read more please visit: http://www.huffingtonpost.com/2015/02/26/companies-minimum-wage_n_6754070.html

Ikea raises minimum wage for U.S. retail workers

THE ASSOCIATED PRESS
Published: June 26, 2014

NEW YORK – Ikea’s U.S. division is raising the minimum wage for thousands of its retail workers, pegging it to the cost of living in each location instead of to local competition….

For the entire story visit:  http://tbo.com/ap/business/ikea-raises-minimum-wage-for-us-retail-workers-20140626/