A recession is on the horizon, and inflation is sky-high across Europe and in the US. It has triggered a cost of living crisis, which is squeezing employees financially.
Workers are worried about paying for essentials (57%), not getting a pay rise (25%) and having to take on a second job (21%), according to European research by Personio. Their concerns are linked to the fact they do not trust that their employer will continue to invest in its people in this challenging environment.
These feelings are largely validated – 36% of the businesses surveyed by Personio said they were unable to provide support due to lack of budgets.
However, 51% are doing something:
The latest company to take action amid the looming recession is the Ingka Group.
Ingka is IKEA’s largest retailer overseeing 392 IKEA stores (it represents around 90% of IKEA retail sales). It employs more than 150,000 people in over countries.
Inside Ingka’s cost of living support package
While many of the other brands are embracing cost of living bonuses and salary hikes, Ingka is taking a different route.
It has launched a €10 million social fund that supports those employees most in need, as well as doubling employees’ discount to 30% on groceries and energy saving products.
Talking about the social fund, Ingka’s global people and culture manager Ulrika Biesèrt tells UNLEASH: “This is a global fund that will be made available to each Ingka country for co-workers who may require extra support during the current cost of living crisis this financial year.
“It is for ’one-off costs’ a co-worker may have.”
She adds that each Ingka country will choose “how to make the best use of the lump sum”, which will be dependent on the particular nature of the cost of living crisis in that location.
UNLEASH was keen to learn why Ingka decided to take the social fund route, rather than introduce bonuses for all employees.
Biesèrt explains: “We know things are tough at the moment, the cost of living crisis is affecting all of us in very different ways – some more than others.
“We are guided by the vision of creating a better everyday life for the many people. And first and foremost, we are committed to a good life for our own co-workers. We want to stand by our co-workers during these tough times.”
Biesèrt is clear that the social fund is only an Ingka Group initiative for now. Only time will tell how the rest of IKEA’s business will respond to the cost of living crisis.
Ultimately, supporting employees in the cost of living crisis is not just the right thing to do, but it is good for business.
Global research by Qualtrics found that because of their financial concerns, many employees are looking for new, higher paying jobs. They are not afraid to take a risk and find a new job if it will be mean more financial security.
Therefore, it employers want to thrive in the recession and avoid an attrition crisis in ongoing ‘Great Resignation’, they need to step up and do something.
Biesèrt concludes: “For us, people are our priority, and taking care of our co-workers is our guiding star.
“People are at the heart of our business, and, as always, we are guided by our values as a culture as a values-driven company. It is more important than ever that we meet our co-workers where they need help the most.”
She believes that Ingka’s cost of living package will be positive for retention and morale at the retailer; “hopefully co-workers will feel that there is support to get from Ingka Group as an employer and that we really do care about people with concrete actions, not just words.”
Are you ready to follow suit?
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