IKEA, a home furnishing retailer, has announced that it will pay its staff the living wage from 1 April 2016.

The announcement comes as part of a holistic transformation of basic co-worker conditions. All co-workers across the UK employed by IKEA will receive a minimum of £7.85 per hour, those employed in London will receive £9.15 per hour. It is estimated more than 50 percent (roughly 9,000) of IKEA’s staff will be impacted by the wage increase.

Gillian Drakeford, IKEA UK and Ireland country manager says:

“As a values-driven organisation, we are guided by our vision to create a better everyday life for the many people, which of course includes our co-workers. We believe our people are the inner strength of our company, so it is only right to ensure we provide a meaningful wage that supports the cost of living.

“Introducing the Living Wage is not only the right thing to do for our co-workers, but it also makes good business sense. This is a long-term investment in our people based on our values and our belief that a team with good compensation and working conditions is in a position to provide a great experience to our customers.”

The change is part of IKEA’s plan to ensure employees not only have the right level of pay but also a schedule that works well for both parties.

Rhys Moore, director of The Living Wage Foundation comments:

“We are delighted with this momentous announcement that IKEA will be accrediting as a Living Wage employer. This is a historic moment in the life of the Living Wage movement, as IKEA become the first national retailer to announce their commitment to the Living Wage and they will reward all their staff with an hourly rate of pay that covers the cost of living. This is a huge step for the British retail sector and we hope that many other businesses will follow the leadership IKEA is showing on the issue of basic pay.”

Melanie Stancliffe, employment specialist and partner at Thomas Eggar LLP, comments:

“IKEA’S commitment to pay all employees the living wage is a significant step for the retail industry so soon after the Chancellor’s Budget, and sets a benchmark for retailers seeking to be socially responsible.

“The IKEA brand is already synonymous with making design-led homes and furniture affordable; this commitment as an employer reinforces the retailer’s credentials as an ethical employer.

“With some commentators questioning the affordability of the living wage for employers, IKEA’s move will no doubt be scrutinised carefully by other retailers. Far from being punitive, this first mover advantage is much more likely to pay dividends for the IKEA brand, supporting staff recruitment, retention and building good will.”

Title image credit: Håkan Dahlström