International Journal of Multidisciplinary Research and Publications
ISSN (Online): 2581-6187
74
Yanning Li, “Business Insight: Leadership and Human Resource Management Analysis for IKEA,” International Journal of
Multidisciplinary Research and Publications (IJMRAP), Volume 3, Issue 1, pp. 74-81, 2020.
Business Insight: Leadership and Human Resource
Management Analysis for IKEA
Yanning Li
School of Strategy and Leadership, Faculty of Business and Law, Coventry University, Coventry, UK
Email address: liy281[AT]uni[DOT]Coventry[DOT]ac[DOT]uk
Abstract— This paper aims at evaluating the management of IKEA
from two perspectives: the leadership of leaders and managers and
the human resource management inside the firm. Part 1 focuses on
analyzing the leadership of leaders in IKEA and providing
suggestions for the challenges faced by the leaders. Part 2 focuses on
the human resource management issues of IKEA and also provides
relative suggestions.
Keywords— HRM, Leadership, IKEA, Herzberg’s Theory, Maslow’s
Hierarchy Theory.

1.1 Introduction of the Organization
IKEA is the world’s largest furniture and household goods
retailer from Sweden, founded in 1943. As of December 2008,
IKEA had 292 large stores in 36 countries and regions around
the world. Most of the stores are located in Europe, while
others are located in the United States, Canada, Asia and
Australia. The IKEA brochure, which prints up to 100 million
copies a year, contains about 12,000 items and claims to be the
most widely distributed book besides the Bible (IKEA 2018).
1.2 Introduction of Leader and Manager and What is the
Organizational Mission and Vision
1.2.1. Leader and Manager
Leaders are committed to motivating subordinates and
creating personal vision and energy. Leaders should set up the
future development direction of the enterprise and strive to
turn the company’s plan into reality. They influence others
with their charm and behavior. In contrast, the responsibilities
of managers are more practical and specific. They need to pay
attention to the daily operation of the enterprise. Planning,
organizing, problem solving and evaluation are their regular
work structures (Ibrahim and Cordes 1996). Although there
are some differences in hierarchy and power between leaders
and managers, leaders also play the role of managers in some
special situations. Leaders and managers have the same goal.
When the company faces some difficult challenges, leaders
need to take into account the role of managers and make
detailed strategic plans and employee arrangements.
Jesper Brodin was born in 1968. He began to work at
IKEA in 1995 as a Pakistani purchasing manager. Over the
years, he has held various positions, including assistant to
IKEA founder Ingvar Kamprad and assistant to IKEA CEO
Anders Dahlvig. In addition, he also served as regional
manager of China and chief executive officer of Sweden
headquarters. IKEA Sweden is responsible for the
development, design, production and supply of all products in
all stores worldwide (World Economic Forum n.d.).
Therefore, it can be said that Jesper Brodin has accompanied
IKEA’s growth for nearly 30 years. He was officially
appointed CEO (chief executive officer) of IKEA in
September 2017, which is also the leader of IKEA (INGKA
n.d.).
1.2.2. The organizational mission and vision
“Creating a Better Daily Life for Most People” is the
direction that IKEA has been striving for since its
establishment. IKEA has always been associated with
improving people’s quality of life and adhering to the business
principle of “providing as many customers as possible with
household goods that they can afford, are well designed, fully
functional and cheap”. While providing a wide range of
household goods that are beautiful and practical and affordable
to the public, IKEA strives to create a business model that
focuses on the interests of customers and society and is
committed to environmental protection and social
responsibility (IKEA 2020).
1.3 Structure of the Essay
In the introduction section, the paper introduces the
background information of IKEA and CEO Jesper Brodin, and
also includes the conceptual comparison between leaders and
managers. In the main paragraph, first of all, the paper
analyzes Jesper Brodin’s leadership style with theory.
Secondly, it expounds the challenges and consequences faced
by leaders. The third part of the paper critically analyzes how
leaders deal with difficulties. This is followed by a brief
conclusion.
2.0 Main Body
2.1. Explanation of Leadership Style and Leadership Skills of
Leader
2.1.1. Leadership Style
Jesper Brodin’s leadership style is transformational (Bass
and Riggio 2006). Burns and Bass define transformational
leadership as leaders who can give more incentives to
subordinates and pay more attention to their needs (Stewart
2006). As a leader, Jesper Brodin attaches great importance to
the unity and faith of the team. He said: “The power is where
the people are. Believe in yourself and your strength, but don‟t
forget to rely on other people‟s strengths, too. Because we‟re
truly stronger together. (INGKA n.d.)” IKEA publicizes job
vacancy information to staffs so that they can evaluate their
personal ability and start to manage their own career
development independently by comparing with the
requirements of a better job. In addition, in order to motivate
International Journal of Multidisciplinary Research and Publications
ISSN (Online): 2581-6187
75
Yanning Li, “Business Insight: Leadership and Human Resource Management Analysis for IKEA,” International Journal of
Multidisciplinary Research and Publications (IJMRAP), Volume 3, Issue 1, pp. 74-81, 2020.
staffs more effectively and help their career development,
IKEA provides various opportunities to encourage staffs to
learn professional skills and knowledge in practice. IKEA not
only helps employees realize their self-worth by encouraging
them, but also meets the needs of them as much as possible
according to the other four aspects of Maslow„s Hierarchy of
Needs Theory, including physiology, safety, belonging and
self-esteem.
Regarding the arrangement of working hours, IKEA not
only requires headquarters staff to freely allocate working
hours, but also opposes employees working overtime in stores.
IKEA believes that if co-workers work too hard, efficiency
and productivity will decrease. At the same time, IKEA
provides a comfortable working environment for its coworkers. For example, IKEA stores and office buildings are
built according to the design of co-workers. Free drinks are
provided throughout the day to quench thirst, and there is no
specific meal time for lunch. IKEA also provides special
lounges and smoking rooms. In particular, IKEA co-workers
and their superiors are treated equally. It is usually impossible
to identify managers or employees by their clothes. In a word,
these measures reduce the pressure of employees and
strengthen the relationship between subordinates and leaders,
thus meeting the needs of employees and stimulating their
enthusiasm for work (Wesley et al. 2015).
To sum up, Jesper Brodin is considered a transformational
leadership style because he has been paying attention to the
needs of employees and inspiring them to face new
challenges. Not only that, but he is also a laissez-faire leader
because he gives his employees a high degree of freedom.
Sometimes, excessive stress at work will lead to a decline in
productivity, but this leadership style can generate high
motivation and provide effective quality output. In addition,
Jesper Brodin’s leadership style can also be defined as
paternalistic leadership style in relation to Maslow’s hierarchy
theory (Maslow, Stephens and Heil 1998). He gave his
subordinates enough respect and patiently listened to the needs
of the employees and worked hard to realize them
(Managementikea 2015).
Figure 1. Administrative Skills (Katz 2009:33-34)
2.1.2. Leadership Skills
When evaluating a leader, not only the leadership styles
but also the leadership skills should be analyzed. Leadership
skills are usually divided into three categories: technical skills,
human skills and conceptual skills (Northouse 2019).
As the leader of IKEA, Jesper Brodin belongs to top
management (See figure 1). IKEA is not a technical enterprise,
so it does not need specific practical skills. He can be
respected by the co-workers and the co-workers are willing to
work at IKEA, which shows that he has human skills. He also
has conceptual skills because he knows the relationship
between each department to keep IKEA running stably under a
clear organizational structure.
2.2. Explanation of the Challenge that the Leader Deals With
In February 2020, an official news from IKEA announced
that the store in Coventry would be closed this summer. The
store cost 35 million pounds when it was built. However, since
it opened in 2007, it has sustained losses and fewer people
visited than expected (BBC News 2020). Ikea attributed the
closure of the store to the scale of construction. The shop has
seven floors and paid a high construction fee. At the same
time, its geographical location is not good either. It is located
in the downtown of Coventry, but it is next to the ring road.
High construction and operating costs have not been able to
form a positive proportion with profits. Although this is
IKEA’s first store in the UK, it is obvious that it is difficult to
continue to operate because there is no stable profit for many
years.
2.3. The Consequences of the Challenge
IKEA‟s announcement that it will close the store in
Coventry is devastating news for co-workers. The news shows
that 352 co-workers will face unemployment, although IKEA
said they would try to help these co-workers facing
unemployment find new jobs.
In addition, according to data provided by the Altus Group,
IKEA’s departure may put Coventry’s finances in a crisis that
cannot be ignored. IKEA is the 11th largest commercial
interest rate payer. Nearly 1 million pounds will be paid each
year (Joanna 2020). The closure of IKEA means that the
government will lack this part of income for urban
development and construction, which will slow down the
development of Coventry.
3.0 Critically Analyze and Explain How Leader Executes and
Leads the Organization to Deal with this Challenge
Regarding the closure of IKEA’s largest store in downtown
Coventry, IKEA’s priority task is to arrange employee transfer.
Minimize mandatory layoffs and strive for the best treatment
for 352 employees facing unemployment (Tracey 2020). First
of all, IKEA will look for job opportunities within the
company for these co-workers, such as changing jobs or new
workplaces for them. In addition, Usdaw, one of Britain’s
largest trade unions, offers some help and advice to IKEA
members during this difficult period. At the same time, IKEA
is also looking for new job opportunities through Jobshop for
employees facing job losses (Tom 2020).
In addition, IKEA’s new CEO Jesper Brodin will focus on
the transformation of traditional marketing strategies. He
gradually realized that the popularity of e-commerce and door
International Journal of Multidisciplinary Research and Publications
ISSN (Online): 2581-6187
76
Yanning Li, “Business Insight: Leadership and Human Resource Management Analysis for IKEA,” International Journal of
Multidisciplinary Research and Publications (IJMRAP), Volume 3, Issue 1, pp. 74-81, 2020.
to-door delivery has weakened the attractiveness of IKEA’s
warehouse stores to customers. IKEA has generally
established its stores in remote locations in the city center.
Customers have to drive for miles, which makes them have to
pay high transportation costs (Reuters 2017). With the rise of
online shopping, consumers have become accustomed to
sellers delivering goods directly to their homes. This is
undoubtedly the key reason why IKEA customers are
decreasing year by year and are facing annual losses.
More specifically, Jesper Brodin’s plan is to build small
IKEA showrooms in the city center. IKEA’s first city store
was built in central London.
For customers, city stores not only solve their
transportation problems, but also provide online shopping
platforms. The number of visitors to the IKEA website
increased by 10% to 2.4 billion after the online platform and
city stores were put into operation. Store customers increased
3% to 838 million (BBC News 2018). The idea of city stores
not only saves the construction cost, but also develops
diversified businesses of IKEA, realizing initial transformation
and entering digital commerce.
Obviously, the transformation of enterprises will face
extremely high risks. This may be an opportunity to promote
the development of the enterprise, or it may be an
unprecedented threat. This transformation has almost updated
IKEA’s traditional marketing model, which is undoubtedly a
great challenge. In response to this, Jesper Brodin said, “It‟s
an era where what we‟re doing is we‟re allowing ourselves a
greater degree of entrepreneurship. There‟s a risk of
fragmentation or you might even say brand damage. But we‟re
not seeing it at all like that. The speed of change and with
consumers is speeding up and we need to keep up. (Richard
2019)”
To sum up, it is not difficult to see that Jesper Brodin is a
leader with a transformational leadership style. Faced with the
closure of Coventry stores, his first task was to help
employees solve the unemployment problem. Secondly, he
constantly adjusted IKEA’s operation strategy. Changing
IKEA’s long-term development goals according to the needs
of consumers shows that he is a visionary leader.
4.0 Conclusion
This paper analyzes the leadership style of the current
CEO of IKEA, Jesper Brodin, based on the news that IKEA
closed the Coventry store released in early 2020. Closing the
Coventry store is a challenge for IKEA. In the main part, a
brief introduction to this challenge and its consequences are
written. Most of the contents of the paper are analyzed around
the leadership’s approach to solving this challenge, thus
deducing the leadership style of Jesper Brodin. In the future
development of IKEA, Jesper Brodin should maintain the
current transformational leadership style. Pay attention to the
needs of subordinates and become respected leaders.
Encourage and lead followers to realize IKEA’s goals, mission
and vision through faith and innovation.
II. PART 2 – HUMAN RESOURCE MANAGEMENT ANALYSIS
The part mainly discusses four HRM issues faced by
IKEA. The Part 2 is divided into two subparts: main section
and summary. The main section of the paper lists four issues
concerning human resources management. After introducing
each problem, a detailed analysis is made from the
perspectives of advantages and disadvantages. Then, a feasible
changing plan is given, and the advantages and disadvantages
of the plan in the implementation process are evaluated. The
last paragraph is a conclusion which conceptually reviews the
structure and content of Part 2.
1.0. Human Resource Issue and Changing Plan
There is no doubt that employees are the core labour force
of the enterprise, so the management, evaluation and
motivation of employees become increasingly important,
which is the responsibility of the human resources department
(Chowhan et al. 2017). The human resources department will
inevitably have some mistakes in its daily management. The
following will list and analyze four problems in the human
resources management of IKEA in recent years.
1.1. O4G Policy
 Brief Introduction of the Issue
O4G policy was officially launched and implemented at
IKEA US on October 15th, 2017. This policy is intended to
readjust the role of employees and reorganize the department.
As a result of the reorganization, many employees were told
that they would be promoted while being reduced in salary.
The employees realized that their salaries would be cut and
offered to resign despite the promotion.
After some co-workers resigned due to dissatisfaction with
the policy, IKEA US faced problems such as shortage of coworkers and insufficient training (Áine 2019).
 Types of Human Resource Issues
O4G policy is linked to two kinds of human resources
issues, retention and employee queries. The responsibility of
human resources is not only to recruit new employees but also
to retain existing talents. The release of this policy has led to a
high turnover rate of staff because they think the policy is
unfair. In addition, the policy calls for a reduction in
employees’ salaries, which will be classified as salary issues in
employee queries. Whether employees are satisfied with the
salary they earn and whether they receive the salary on time.
 Deep Analysis
Some employees reflect their real feelings about the
implementation of the policy and the phenomenon caused by
O4G policy anonymity to Business Insider. Many co-workers
facing thousands of dollars in salary cuts are already secretly
looking for new job opportunities and planning to leave IKEA.
Even more exaggerating, it is calculated that IKEA managers
may be affected by the policy to reduce their salaries by nearly
US$ 30,000 per year (Cain 2019).
Although this policy will promote the positions of
employees, they will still choose to leave due to their
dissatisfaction with wages. Employees generally believe that
O4G policy is a rejection of high-income employees. This
kind of cognition of employees will worsen the working
environment and make the atmosphere no longer harmonious,
which will hinder the cooperation between departments or
teams (Cain 2018a). The implementation of the policy has also
International Journal of Multidisciplinary Research and Publications
ISSN (Online): 2581-6187
77
Yanning Li, “Business Insight: Leadership and Human Resource Management Analysis for IKEA,” International Journal of
Multidisciplinary Research and Publications (IJMRAP), Volume 3, Issue 1, pp. 74-81, 2020.
caused IKEA USA to lose many experienced management
staff (Cain 2019). IKEA needs to train more new co-workers
to replace the old ones, which will undoubtedly result in high
training costs and staff rotation costs. If the training of new
employees is not progressing smoothly, or they cannot afford
more work, it will easily become an obstacle to the company’s
operation and lead to loss of profits (Cain 2018a). The change
of the employee’s role is shown in Figure 2. In fact, not all
employees are satisfied with the new role. Some jobs do not
conform to their skills. It is difficult for them to perform well
in their new roles. Over time, they will become insecure and
lack motivation (Cain 2018b).
Figure 2. Changes in IKEA Roles (Áine 2018b)
If the O4G policy is analyzed from a positive point of
view, it can be carried out from both employees and the
company. For employees, the promotion of their positions can
give them a broader vision and more practical opportunities in
their work. Especially for low-level employees, they have a
lower salary base and fewer responsibilities, so they have
greater development prospects. If they continue to work at
IKEA, although their wages have not increased, they can enter
a higher level and even become a manager (Tadesse 2017).
Therefore, O4G policy is a good opportunity for them to
promote their personal career development. In addition, there
are two points about the benefits of the policy to the company.
First, the company can get a clearer organizational structure
after the implementation of the policy (Castro n.d.). The
organizational structure of the company is the prerequisite for
good operation. Second, the company’s profit share will
increase. The reduction of employees’ wages means that the
proportion of the company’s expenditure will be greatly
reduced. Assuming that the company used to use 30% of its
monthly income as employees’ wages, the proportion may be
reduced to 20% after the O4G policy is implemented.
Therefore, the company will have more funds for market
development or investment projects.
 Changing Plan
Although O4G policy is beneficial to employees and
companies, the disadvantages it causes still outweigh the
benefits. According to Herzberg’s two-factor theory, an
improved plan was designed.
Herzberg’s two-factor theory holds that motivation can be
improved through motivating and hygiene factors (Alshmemri
et al. 2017).
Figure 3. Two Influencing Factors of Herzberg’s Theory (EPM 2018)
As shown in Figure 3, incentives include employee
progress, higher achievement or some interesting work. Its
existence makes employees work harder. Hygiene factors refer
to wages, working environment, welfare, etc. Lack of hygiene
factors will cause employees to lose their enthusiasm for
work, thus resulting in dissatisfaction with work (EPM 2018).
The aim of O4G policy is to reorganize the structure of the
company. To maximize the value of the new organizational
structure, the contribution of employees should be improved
first. If employees do not perform well, no matter how clear
the organizational structure is, the company’s operation cannot
be improved. IKEA US has reached the motivation factor in
Herzberg Theory, giving employees higher positions or new
responsibilities they have never been exposed to, but they
neglect the hygiene factor. IKEA should give employees
higher salaries so as to stimulate their enthusiasm for work. In
the policy, IKEA should promise each staff a basic salary
which is balanced with the position to treat them equally. If
employees want to strive for higher salaries, they need to
contribute more, such as completing more tasks or playing
more roles. The internal working environment of the company
will become positive and relatively competitive.
Competitiveness can make employees work harder under a
good effect. Enterprises should provide employees with good
working conditions, which can not only motivate employees to
work more effectively but also retain experienced employees
and improve their loyalty to the enterprise.
1.2. Fernandez’s Death
 Brief Introduction of the Issue
International Journal of Multidisciplinary Research and Publications
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Yanning Li, “Business Insight: Leadership and Human Resource Management Analysis for IKEA,” International Journal of
Multidisciplinary Research and Publications (IJMRAP), Volume 3, Issue 1, pp. 74-81, 2020.
Joaquin Fernandez, a 41-year-old engineer from Spain,
died on October 18, 2016, while working on a hydraulic lift at
IKEA Reading store. His colleague Gomez De Sola did not
put the elevator into maintenance mode, which resulted in the
elevator falling accidentally. De Sola said that if Fernandez
hadn’t moved his body to try to save himself, he wouldn’t lose
his life, because the elevator was at a distance from the
ground. The elevator pressure broke all ribs in Fernandez’s
chest and broke his spine and shoulder bones. It was finally
identified as traumatic asphyxia death (Joshua 2018).
 Types of Human Resource Issue
The accident is a health and safety issue. For legal reasons,
the company must record the details of health and safety
information, such as equipment maintenance or employee
health. Health and safety records are to ensure the safety of
employees and help the company to fulfil its legal obligations
to employees and the public (Reese 2018).
 Deep Analysis
Fernandez’s death in a work accident was unexpected and
tragic. The incident brought great negative influence to
colleagues and the company.
More employees will worry about their safety at work,
especially technical employees. They may be doing the same
job as Fernandez or in the same working environment. Some
people even quit their jobs and left IKEA because they feared
for their lives. In the long run, some job seekers planning to
work at IKEA will also give up because of the accident.
Today, workplace health and safety procedures are of
paramount importance to employees and employers. The
casualties are incalculable and intolerable. This kind of
accident will cause heavy losses to the employees’ families
(Medium 2018). At the same time, the occurrence of this
tragedy also reminds IKEA that it should pay attention to
equipment maintenance and update and perfect the safety
system to avoid future troubles.
The IKEA store in Reading was built at a cost of 10
million pounds and officially opened on July 14. In fact, it has
only been in operation for three months and is facing this
serious employee death accident. It was forced to close down
due to on-site investigations by the police and doctors (Walker
2016). Profits from short-term operations cannot match
expenses. There is no doubt that the store is in a state of loss.
Although only the Reading store has been closed, IKEA still
needs to maintain stable profits by increasing the income of
other stores.
 Changing Plan
In order to avoid similar accidents in future work, IKEA
should make some improvements according to Maslow’s
hierarchy of needs theory.
Maslow’s hierarchy of needs is a theory of motivation in
psychology, including a five-level model of human needs.
Starting from the bottom of the hierarchy, the needs are
physiology, safety, love and belonging, self-esteem and selfactualization. The demand is met step by step. As a basic
condition, the company can help its employees achieve their
personal achievements only after ensuring their necessary
physiological and safety needs (Fallatah and Syed 2018).
IKEA can start from the following three points to meet the
needs of co-workers for work safety:
1. Provide employees with all-round work insurance.
2. Increase the technical staff’s professional knowledge
training.
3. Timely overhaul equipment and update system.
Starting with insurance, IKEA should purchase
commercial insurance for new employees and reflect it in the
contracts signed. Insurance is very important in order to be
fully prepared for accidents in life. As happened in the
accident, if the employee dies unfortunately at work, the
compensation provided by life insurance can at least protect
the employee’s family living expenses (Sharma 2017).
The second improvement plan is to provide more
comprehensive training for employees. According to normal
procedures, employees become regular employees of the
company after signing contracts, and they need to be trained
after joining the company. The staff of the technical
department have to control a lot of equipment every day, so
they should be trained more carefully. The training should not
only include theoretical knowledge and operation
specifications but also include some practical exercises and
even rehearsals of some emergency situations. The purpose of
training is to improve the professional quality and professional
level of employees. Employees’ participation in training also
helps to increase their cooperative relationship (Noe and
Kodwani 2018).
Finally, IKEA should overhaul and update the safety of the
equipment in time, although the death of Fernandez was not
attributed to the equipment. Providing safe equipment for
technicians will greatly reduce the unknown risks in their
work. In particular, high-risk equipment should be overhauled
more frequently, from monthly to weekly. Although the
frequent inspection will increase the cost of equipment
maintenance, whether it is human labour or materials, it will
well ensure the safety of equipment use.
1.3. IKEA gives India employees six months paid parental
leave
 Brief Introduction of the Issue
According to the survey, about 25% of women with higher
education in India have decided to quit their jobs after
pregnancy and become full-time mothers (Assocham 2015).
IKEA India offers 26 weeks of paid parental leave to coworkers like Sweden (Iyengar 2017). The effect of this policy
did not reach the expectation. In fact, most Indian female
employees are temporary workers who do not meet the
conditions of maternity leave or paid leave.
 Types of Human Resource Issue
According to the summary above, this problem can be
attributed to cross-cultural management. Specifically, it is
caused by cultural differences between countries.
Multinational companies usually need to flexibly change their
operation strategies according to regional and cultural
differences in management. Lack of understanding of cultural
differences will lead to improper decision-making. For
example, individualism culture (e.g. English) emphasizes
independence, while collectivism culture (e.g. Venezuela)
emphasizes common interests (Randi n.d.). Transnational
International Journal of Multidisciplinary Research and Publications
ISSN (Online): 2581-6187
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Yanning Li, “Business Insight: Leadership and Human Resource Management Analysis for IKEA,” International Journal of
Multidisciplinary Research and Publications (IJMRAP), Volume 3, Issue 1, pp. 74-81, 2020.
corporations should realize that according to these cultural
differences, the management of regional branches should be
different.
 Deep Analysis
Mothers will be entitled to 26 weeks of vacation with full
pay, compared with 12 weeks previously. On the positive side,
this puts India ahead of several richer economies, including
the United States, Japan, Germany and France. In addition, a
good working policy for workers may represent a high
retention rate (Pell 2017). When female employees are
extended their paid maternity leave, they can have more time
to concentrate on taking care of their children. They can also
pay attention to the growth of babies without quitting their
jobs. During the period of maternity leave, female employees
can still earn income to support their families’ daily expenses.
This policy helps them to solve their problems and gives them
an additional choice besides resigning, so they will be more
willing to work at IKEA. With the help of IKEA’s warm
policy, female co-workers will also work harder and perform
better. Improving the personal work efficiency and quality of
employees means that the company will develop more
smoothly.
Although from a long-term perspective, this policy has
brought many positive effects. However, a prerequisite that
cannot be ignored is that many Indian employees are not
suitable for this policy. According to the annual employment
and unemployment report, temporary workers account for
one-third (33%) of India’s employment (Natarajan 2018). This
is the most common form of employment. The income or
status of daily wage earners is obviously different from that of
permanent employees. In this case, the same policy may
benefit all female employees in Sweden and only two-thirds of
female employees in India. In addition, change another
negative impact assumption. If female employees can enjoy up
to six months of maternity leave, the company’s losses are
incalculable, both in terms of capital and labour. First, paid
leave means that workers are paid for not doing any work.
Second, everyone else has to take on extra work, because
employers may not be able to provide extra staff to replace job
vacancies (Gaille 2015). Therefore, this policy needs to be
changed.
 Changing Plan
The fundamental reason why the policy of extending paid
maternity leave has not achieved good results in India is that
the market flexibility of IKEA’s labor force is relatively low.
Flexibility in the labor market refers to the reaction of the
labor force to changes in market conditions (Economics
Online n.d.). In India, the common job of employees is
temporary, and temporary contracts are generally
recommended to improve flexibility.
In order to benefit all types of Indian female co-workers,
first, IKEA should design a special policy for temporary
workers. For example, temporary employees can sign a
contract with the company to continue working at IKEA when
they know they are pregnant. After signing the contract, IKEA
can define the salary of paid maternity leave according to the
performance appraisal ratio of co-workers (Mohrman and
Lawler 2017). This method not only meets the needs of
employees but also will not lead to a significant reduction in
staff turnover rate. The second plan is that female employee
can be assigned some simple tasks that can be completed by
computers when they take maternity leave, such as publishing
some online publicity posters or becoming online after-sales
customer service (Christensen 2019). In this way, the salary
paid by the company to them will become more valuable.
1.4. IKEA to cut 7,500 jobs globally by 2020
 Brief Introduction of the Issue
IKEA plans to cut 7,500 jobs worldwide by 2020,
including 350 in the UK (Chapman 2018). The reason for this
massive layoff is that IKEA will change its overall operating
strategy. In order to keep up with the changing shopping
habits of consumers, IKEA has shifted its main operation to
online platforms and built more small studios in urban centres
(Monaghan 2018). At the same time, IKEA also announced
that it would create 11,500 new jobs worldwide while cutting
jobs, with Britain accounting for 500 (Chapman 2018).
 Types of Human Resource Issue
The layoff is part of IKEA’s biggest transformation in
history (Milne 2018). It will focus on the central
administrative departments of the 30 countries where IKEA
does business (Monagham 2018). These employees are
usually at a higher level and have corresponding rights. To
sum up, this problem can be classified as talent retention and
management.
Figure 4. Talent Management Process Model (Prarthana 2019)
As shown in figure 4, the talent management process
involves identifying talent gaps and vacant positions, finding
suitable candidates and joining the workforce, developing the
skills they need, training their relevant professional
knowledge, and retaining and motivating them to achieve
long-term goals and business objectives (Ghosh 2019).
Talent management and retention have always been
recognized as the most important factors for organizational
success. Facing the increasingly high turnover rate of
employees, retaining valuable employees has always been a
problem that managers need to pay attention to (Collings et al.
2018).
 Deep Analysis
IKEA’s profits in the UK plunged nearly 40% in 2017 to
about 87 million pounds. IKEA attributed the substantial loss
of profits to the high salaries paid to the administrative staff
International Journal of Multidisciplinary Research and Publications
ISSN (Online): 2581-6187
80
Yanning Li, “Business Insight: Leadership and Human Resource Management Analysis for IKEA,” International Journal of
Multidisciplinary Research and Publications (IJMRAP), Volume 3, Issue 1, pp. 74-81, 2020.
and the investment costs of shops and websites (Monagham
2018).
Jesper Brodin, the current CEO of IKEA, said IKEA
needed to simplify its organizational structure because they
found that some co-workers were actually doing the same job
(CNBC 2018). That is to say, IKEA paid two salaries for the
same job. They avoided this kind of repetitive expenditure by
laying off staff. Cutting the expenses on employees’ salaries
will enable IKEA to concentrate more funds to better support
the development of online platforms, thus meeting the online
shopping needs of more customer service.
The previous paragraph mentioned the advantages of
large-scale layoffs. However, layoffs are also lossy. The
massive loss of experienced talents will paralyze IKEA
operations (Lawrence 2017). If the laid-off employees have
the ability to develop the company’s projects, the company
will lack high-efficiency and high-quality output, which may
eventually have a negative impact on the company’s long-term
development (Harrington 2016). Although the human
resources department can provide professional training for
new employees, ignoring the training cost, the trainees still
need to take over the responsibilities of the former employees
of the administrative department for several months or years
(Lawrence 2017).
 Changing Plan
The sensible and effective cost reduction method should
not be mass layoffs, but to provide more diversified and
innovative job opportunities for employees after realizing their
characteristics (Harrington 2016). It is boring for employees to
always do the same job. Trying new jobs can make them more
energetic and stimulate employees’ creativity, thus realizing
higher self-worth and achieving new achievements in their
career. In particular, if talented people get a challenging
position that they have not tried before, they will come up
with a variety of novel ideas, which will be more helpful to
IKEA during the transition period. To sum up, IKEA can try
to transfer those employees in the administrative department
who are about to be laid off to new jobs, such as the managers
of regional studios. This will not only prevent large-scale
layoffs from destroying the fragile structure of the company
during its transformation but also save the cost of rerecruitment and training.
2.0. Conclusion
The main content of the paper is about four real IKEA
human resources issues. The first issue is O4G policy. This
issue is classified into retention and employee queries, and
suggestions for improvement are given based on Herzberg’s
two-factor theory. Subsequently, the death of hydraulic lift
worker Fernandez reflected the safety of health and safety for
employees, and a changing plan was designed according to
Maslow’s hierarchy of needs theory. The third issue is IKEA
provides paid maternity leave for Indian female staffs for up to
six months, but this policy cannot be widely used as in
Switzerland. This issue reflects the cross-cultural management
problems caused by regional differences. The last issue is
about talent retention and management. The case cited is
IKEA’s massive layoff of 7,500 people in 2020. Every human
resource problem is analyzed from both advantages and
disadvantages, and a changing plan is given.
After summarizing the main contents of the paper, the
following paragraphs are some suggestions for the future
development of IKEA.
IKEA’s large-scale transformation is taking place. It should
use the Internet to better promote online marketing so as to
cater to mainstream consumption patterns. IKEA, as a retail
company, employees’ service to customers and contribution to
the company are the core factors supporting the development
of the enterprise, so employees should be paid more attention.
To provide them with better policies, safer and more
comfortable working environment, and higher personal
development opportunities, so as to encourage employees to
have higher efficiency and higher quality at work.
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