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Global retailer of furniture and home goods Ikea faced a turnover problem in 2022 and 2023 that many senior living operators can sympathize with – and operators also can learn lessons from how the global furniture and home goods giant responded.
It’s an apt moment to focus on improving retention, as employers across the country continue to add jobs at a fast pace – resulting in a “blowout” jobs report last week. That report from the U.S. Bureau of Labor Statistics showed continuing care retirement communities (CCRCs) and assisted living communities added about 7,700 jobs between April and May.
To hold onto those new workers, senior living operators could consider the Ikea example.
The issue was that customer-facing workers were quitting Ikea in large numbers. About 62,300 staffers across the globe voluntarily left the company in 2022, with high turnover in the U.S. Each worker that left cost the company about $5,000 at the time.
As detailed in a newly published story on Bloomberg, the Sweden-based company got to work implementing new benefits and support for workers, including higher pay, more flexibility and technology in scheduling and better benefits.
Doing so has seemingly made a big difference. Last year, a little more than 51,000 workers voluntarily left the company across the world, which was about on par with turnover in 2021. In 2024, turnover had fallen to 17.4% globally, and 25.1% in the U.S., both markedly lower than two years prior.
I see many parallels Ikea’s efforts to what some senior living operators have undertaken in recent years to solve staffing challenges. But while I think Ikea’s story offers a valuable and important window to what operators are getting right about staffing, I also think it reveals what they are getting wrong about it.
In this members-only SHN+ Update, I analyze Ikea and compare and contrast it to senior living, including:
– How Ikea went beyond raising wages to pare down turnover
– What companies Ikea partnered with that made a difference closing the back door
– What senior living operators can learn from Ikea’s staffing challenges and fixes
Inside Ikea’s staffing turnaround
Ikea is known for its practice of selling fashionable furniture and other goods – including Swedish meatballs – at budget prices in more than 470 stores across the globe. But for all its popularity with consumers, that goodwill has not always extended to its staff. The company grappled with complaints from unions and protests from workers less than a decade ago, according to the Bloomberg article.
By the time the pandemic hit in 2020, the company was already hemorrhaging workers and turnover exceeded 30%. The problem reached a head in 2022, when turnover climbed to 33.6% in the U.S., according to Bloomberg’s reporting. For every worker that quit, the company incurred a cost of about $5,000.
So, Ikea implemented new efforts aimed at closing the company’s proverbial back door.
Wages were an early area of focus for Ikea. The company bumped wages up significantly in markets across the globe, including going from 11 pounds per hour, totaling about $14 at today’s exchange rate, to a wage of 13.15 pounds per hour, or a little under $17, according to Bloomberg.
Among the company’s biggest woes at the time was the fact that new workers were quitting soon after joining the company.
Ikea sought to solve its problem by improving onboarding and making shifts more flexible and easier to schedule and swap. In the UK, the retailer gave employees new start times that made their commutes easier, and added remote call center shifts for part-time workers who want to pick up extra hours.
In India, the company subsidized daycare and added 26 weeks of parental leave for parents and offered a five-day workweek instead of a six-day one, according to Bloomberg.
No doubt, the company had to compete with competing employers on benefits and wages in the U.S., but it was flexible scheduling that made a big difference to the company’s staffers here. Like in senior living, Ikea’s workers are hourly and did not always have the flexibility to call off a shift due to a personal or family emergency.
Bloomberg detailed how Ikea worked with a company called Shift Project to move all of its shifts online, and give workers the ability to swap shifts with one another without a manager’s permission. That method replaced a previous one where two workers and their respective managers needed to fill out and sign paperwork. Workers also can request not to work certain blocks of time using the online tool.
In addition to working with Shift Project, Ikea also used a retention tool dubbed Stay that uses data from staffers who have quit to predict when others might be approaching the same threshold. For example, workers with hours that often fluctuate are more likely to quit. Stores using the tool have reduced turnover on average by three percentage points compared with stores that don’t, according to Bloomberg.
All of these efforts resulted in significant reductions in turnover. In the U.S., turnover dipped to 25.1% in April 2024, a significant decrease compared to the company’s turnover rate of 33.6% in August 2022.
That turnover rate is not far off from what some senior living operators have cited for certain community positions, and the overall senior living turnover rate is almost certainly much higher. NIC cited data in the spring of 2022 that showed that the annual senior living turnover for workers across primary markets the organization tracks was about 85%. Given these numbers, I think there is much for operators to learn from the company’s ordeal and fixes.
Senior living implications
I think that Ikea’s journey reducing turnover is one that senior living operators should pay close attention to. For one, I don’t think Ikea is doing anything that senior living operators haven’t done on their own in some way.
Pay raises have been a common occurrence in senior living since the start of the pandemic, with many companies reporting a significantly higher floor for new wages. Senior living operators understand that challenge all too well, and have made onboarding and training workers in their first 90 days a bigger focus in the last few years. Flexible scheduling is also among the most common ways that I see operators trying to meet the needs of new workers, including companies such as Commonwealth Senior Living and Aegis Living.
Senior living operators also are offering financial assistance for workers and better mentorship, training and career paths. To that end, companies including Sinceri Senior Living, Ecumen and Health Dimensions Group have had successes reducing the rate of employee turnover.
I also see companies partnering with those in the staffing technology space to help make workforces more efficient. (Though that, too, has its risks.)
But in terms of lessons that senior living operators can take from Ikea, I was struck in particular by a few elements of the retailers’ approach.
One is how market-specific its staffing solutions have been. The changes that have been most effective for Ikea seem in large part to be those that speak to the specific values of its workers, and these values differ by location. Childcare-related benefits were particularly important in India, for example, while fixing the onboarding process was particularly important in the U.K. and the flex scheduling technology was important in the United States.
Not many U.S.-based senior living operators are managing workforces across different countries, but I think the point stands that successfully addressing turnover requires understanding the specific factors driving workers to leave – and those factors can differ dramatically from one location to the next. Given how stubbornly high senior living turnover rates have been, I wonder whether operators need to be more targeted in how they are deploying all the tools at their disposal – from wage increases to flex scheduling, childcare benefits to better onboarding and more.
In other words, as providers strive to create a more personalized resident experience, they also must be focused on creating a more personalized staff experience, gathering the data to know what needs and expectations workers have in a specific community.
I also was struck by this information about how Ikea is leveraging part-time staff:
“Part-time staff, who make up about two-thirds of Ikea’s UK workforce, often don’t get enough hours to make ends meet, so Ikea is now giving some of them additional hours working remotely, answering customer calls.”
I’ve heard several senior living providers speak to the potential for having more universal workers as helping to ease staffing pressures, but I can’t recall hearing of any providers offering hybrid on-site and remote work. I wonder if there is greater potential for this, particularly as more providers centralize certain job functions – introducing centralized call centers for sales, for instance.
Given that Ikea is a competitor for some senior living workers in certain markets, I think its efforts to reduce turnover might soon represent table stakes that will have to be matched by other employers. Senior living caregiving is also simply a harder job than working at a furniture retailer, although both I’m sure have perks and disadvantages. But this is to say that senior living communities might not only have to meet but surpass what a company like Ikea is offering workers.
Most notably in terms of how to go beyond Ikea, the Bloomberg article reported that the company is still falling short on supporting employee mental health. This seems a crucial area for senior living operators to invest in, in part because needs here are growing, making such benefits increasingly attractive and important to potential workers. But also, given the stresses of senior living caregiving versus retail and other types of jobs, mental health support seems particularly necessary for this sector.
I do think senior living operators must act quickly if they want to better compete for workers in the years to come, given the actions that well-resourced companies like Ikea are pursuing. I suspect that some operators are already exploring or have already explored joining forces with a partner on the staffing side to do exactly what Shift Project and Stay did for Ikea.
The challenge will be for operators to solve turnover at scale as deftly as Ikea did at scale – no easy feat. But the good news is that what worked for Ikea was relatively simple at the end of the day, and I believe that operators can get there too, with enough work and creativity.
