Even the creators of delectable meatballs and affordable home-office furniture faced challenges during the Covid-19 years. Ikea’s Remote Customer Meeting Point (RCMP) teams faced particular issues, as they were charged with leading remote communications with customers. Kenya Jacobs, Ikea’s director of total rewards, referred to RCMP employees at a recent conference as “the frontline for us,” who often dealt with “irate” customers.
“Our journey started with us asking the question, how does a global brand icon provide a competitive total rewards value proposition for a diverse and dynamic workforce?” Jacobs said at the HR Retail conference in Seattle.
When Ikea started looking into this challenge in the summer of 2020, the Baltimore-area service center dealt with low employee engagement, declining productivity, and negative trends in customer service scores during the pandemic.
“We had just reopened all of our stores, we relied heavily [for customer service] on this one particular location [in the Baltimore area],” Jacobs said. “We also were experiencing a disruption in our supply chain…[employees] were facing financial uncertainty due to rising costs…social unrest, political unrest, or natural disasters. We were trying to solve [our customer service problems] in the middle of all this.”
To address the problem, Jacobs and a group of internal partners put together a three-pronged approach: Study the demographics of the workforce and labor market, use that data to create employee “personas,” and gain commitment from senior leadership to invest further in the RCMP group.
“We really wanted to know where employees were, what is the median household income, and some other things in their community,” Jacobs told the crowd of peers. “If you’re not familiar with personas, our buddies in marketing…segment customers by subgroups, and they assign attributes to [the subgroups]. And that’s what we did with our employee population.”
Given Jacobs’s role, her initial thought was that compensation or benefits could be altered to address the employee engagement issue. But what started as a search for issues in compensation grew into a larger project. She enlisted a cross-functional team to make the necessary improvements.
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“I partnered with the head of the [RCMP]...I partnered with talent acquisition, my business partner, and human resources, all of us got together and we talked about, what information do you need to really move the needle?”
The initial analysis found a group of around 90% hourly workers, 74% of whom were female with an average salary of around $46,000, average tenure of five years, and an average age of 38. The largest generation was millennials, followed by Gen X and baby boomers.
Jacobs said her team also looked at the external talent market, finding that the Baltimore area had a high number of other employers seeking the same kind of talent that RCMP was seeking.
“We can see that the market is saturated. And so that was another piece of information that informed this from a business perspective,” Jacobs said. Ikea ended up opening a new location on the west coast.
The persona exercise produced different worker profiles, such as young part-timers, brand enthusiasts-turned-employees, and retirees working to supplement their income. They began promoting targeted benefits and guidance for employees based on their different needs.
“[A certain group], they have families, so we talked about, how can you get the most out of your benefits? We have great childcare if you need it, if you need backup childcare, you have it, here’s our healthcare benefit. So again, [we’re] finding out the nuances of each group, and communicating to them in such a way that it resonates.”
As a result of these efforts, head count increased by 31%, leadership ratings and engagement scores rose by over 20%, and the centers’ performance scores improved by 13%, according to Ikea data in Jacobs’s presentation. This personalized approach is now expanding to other parts of the company.
“It was a very small group where we could have a case study,” Jacobs said. “Now we’re magnifying this in other groups.”