The American retail industry has an average yearly turnover rate of about 70 percent, with some companies approaching three digits. In 2001, in an attempt to stem this exodus, Aon Consulting and the National Retail Federation Foundation teamed up to survey 60,000 retail employees. They were asked to rank five factors, conveying how important each one was in keeping them attached to their jobs. The most important factor was safety and security on the job. Number two was pay and benefits. Fifth and last was work/life harmony. Diversity was not among the choices.
At various times during his long career, Ikea founder Ingvar Kamprad surveyed himself and then wrote down bits of management philosophy. One nugget is "By always asking why we are doing this or that, we can find new paths. By refusing to accept a pattern simply because it is well established, we make progress. We dare to do it a different way! Not just in large matters, but in solving small everyday problems, too."
By the late 1990s, Pernille Spiers-Lopez, Ikea North America’s president, had already found out firsthand, via a health scare caused by overwork, how disharmony between her work and home lives affected both drastically. It validated her decision to do things differently. Instead of putting energy into things like installing metal detectors to manage employee shrinkage or dangling year-end bonus payments to stem turnover, she would land good employees with "softer" incentives like flexible schedules, generous health benefits and a diversity program that quickly progressed past mission statements.
Today, the company has perhaps the happiest and quite possibly the most productive workforce in the American retail industry, Ikea management insists. "We really don’t have any hard numbers on ROI," says Sari Brody, Ikea’s manager of leadership and diversity, who cites the company’s low-for-retail 36 percent turnover rate and employee-satisfaction surveys that she says are off the charts.
But the numbers don’t matter much anyway. Everyone at Ikea takes it on faith that a happy, diverse workforce boosts profits. "And it’s also about Ikea’s values," Brody says. "Everywhere you go, everything you do, it’s not about ‘me,’ it’s about our values. Freedom. Lack of hierarchy. Respect for each other as individuals."
Ikea’s human resources executives, Brody says, are responsible for answering one central question: "How should we treat people who are part of us?" Or, as founder Kamprad also once wrote: "We must look after each other and inspire each other. Those who cannot or will not join us are to be pitied."
Workforce Management, August 2004, p. 30 -- Subscribe Now!