(Bloomberg) -- As Wal-Mart Stores Inc. faces a worker backlash over pay and working conditions, Swedish retailer Ikea Group is stepping up rewards to keep staff happy.
The flat-pack furniture chain said today it will contribute to the pension plans of employees who have been in their job for at least five years. The initiative follows this years introduction of a performance-driven bonus system as Ikea seeks to strengthen its credentials as an employer.
Called Tack!, meaning thank you in Swedish, Ikeas pension incentive is aimed at increasing loyalty among the chains 136,000 workers worldwide. The move comes only weeks after some Wal-Mart employees held demonstrations across the U.S. to demand higher pay and better working conditions.
Ikea is looking long-term, its sending out a message saying were looking after your long-term wellbeing and were thinking about you for the future, Richard Perks, director of retail research at Mintel in London, said on the phone. Its tying people in, in a way.
Ikeas pension contribution will apply to employees across all markets, with full-time workers getting the same amount regardless of position or salary level. The retailer will initially set aside 100 million euros ($137 million) to fund the program, with future financing to be decided annually.
We believe that these two programs will strengthen the Ikea Group as a great place to work, today and in the future, Chief Executive Officer Peter Agnefjaell said in a statement.
The retailer, which with 303 box-like stores in 26 countries owns the majority of the worlds Ikea outlets, has been working for two years to develop employee loyalty plans, Ikea Group spokeswoman Josefin Thorell said by phone.