Chief People Officer, Tanja Fratangeli of IKEA Canada with Hardlines President Michael McLarney

Hardlines President and podcast host Michael McLarney interviews Tanja Fratangeli, Chief People Officer of IKEA Canada.

Listen in for some profitable wisdom.

 

Key Takeaways:

 

[:28] Michael welcomes Tanja Fratangeli, Chief People Office at IKEA Canada to What’s In Store. Tanja celebrated her fifth anniversary with IKEA in January. Working at IKEA is exciting for Tanja; it brings together her passions for home design and people. Tanja has worked in people, culture, and human resources for almost 30 years.

 

[1:30] Before IKEA, Tanja was with Conagra Foods for eight years in a similar role. It’s a different sector but with people, there are a lot of transferable skills. It’s understanding the business and how to apply people strategies to support the business. That’s exciting!

 

[2:53] IKEA handled the COVID-19 shutdown by changing its business model from in-store to online in 24 hours. Sales of office furniture for homes skyrocketed. Early on, IKEA committed to protecting the jobs of all its coworkers. There was not one layoff during the pandemic lockdowns.

 

[4:30] IKEA retrained coworkers to support coworkers in an online capacity, through delivery or Click and Collect. IKEA developed and upskilled coworkers online to do new jobs. In addition to training, IKEA focused on mental health. People were concerned about their well-being, and their families’ well-being and wanted to know what was happening.

 

[6:16] In Canada, the government supported IKEA in its commitment not to lay anyone off. IKEA had the resources to lean in on coworkers’ mental health and provide solutions that would support coworkers in difficult times. IKEA partnered with Maple (owned by Telus) to provide online physician services when it was hard to get into a hospital.

 

[7:14] IKEA Canada is continuing to focus on mental health challenges around astronomical inflation, the cost of living, mortgages, and putting food on the table. There’s a program for leaders to help understand the struggles of their coworkers. The IKEA coworker benefits package has about $1K dedicated to each coworker for mental health support.

 

[9:08] One in four Canadians is suffering from bad mental health. It could be anxiety; it could be depression or a number of different challenges. IKEA has invested in training its joint health and safety committees with a mental health/first aid facilitator who can respond in a crisis to complement traditional first aid support. This is an evolving area.

 

[10:24] Tanja says silent quitting was more common years ago than now. IKEA has not seen too much of it. IKEA has been focusing on turnover and retention strategies such as upskilling and reskilling. IKEA has 21 units across Canada with different turnovers. In Quebec, the turnover was close to 70%. In other areas, it was up to 45%. Now it’s under 30% and dropping.

 

[13:02] One of Tanja’s most important jobs is to listen to coworkers. From the head office perspective, leaders are there to serve their coworkers. It’s about paying attention to what’s important to the coworkers. Tanja believes that will help her to be successful in connecting with coworkers and have an impact on turnover.

 

[15:02] IKEA addresses affordability for customers and coworkers. IKEA recently announced an $80 million investment in lowering prices on over 1,500 products during these difficult economic times. More price lowering will be coming. During the holidays, IKEA offers additional employee discounts. IKEA offers subsidized meals. There is a comprehensive benefits package.

 

[18:10] IKEA owns a lot of the chain locations. Lowering prices is about choice. Going into this fiscal year, IKEA decided it was necessary to lower prices. IKEA wanted to get back to its roots. It has been a challenge in terms of being able to continue to grow.

 

[18:53] IKEA is about ensuring the right visitation, attracting consumers, and ensuring the volume of visitors to the stores; that’s how IKEA manages low costs. It boils down to choice.

 

[19:59] Canadians want to shop with purpose-led brands. They expect accountability and transparency from those businesses. They want to find employers and retailers that align with their values. IKEA has always put this in the foreground, who we are and how we operate.

 

[21:07] About Jeld-Wen’s JWC8500 Series Windows.

 

[22:06] To help coworkers during this financially difficult time, IKEA provides coworker discounts and additional holiday discounts. IKEA provides competitive compensation. IKEA Canada has introduced some financial services recently for customers and coworkers to support a payment plan for purchases.

 

[23:27] Tanja says that IKEA is a purpose-led organization with its values and caring about its coworkers setting the company apart. Tanja enjoys her job because people are prioritized together with business. People and business are discussed together. Tanja’s role leading the People agenda at IKEA is extremely fulfilling. IKEA’s genuine care is felt in everything it does. 

 

[25:45] Tanja discusses balancing IKEA’s values against profit. By leading with values and purpose, IKEA chose to support its coworkers, which led to being able to sustain the business. Tanja believes if you take care of your people, they will take care of you. IKEA has made value-led choices of where to invest, and where not to invest.

 

[27:16] Four years after the pandemic started, IKEA is still feeling the repercussions of that monumental event. It’s about working together, which is one of IKEA’s key values, across all functions, with people at the center, that will drive success.

 

[28:26] Keeping turnover down is a goal because losing a coworker is a difficult cost to calculate as it is a multi-dimensional loss, including replacement and competence loss. Without keeping turnover sustainably low, it is not possible to make investments in the business.

 

[28:59] At IKEA, meeting the customer is one of the most important parts of the coworkers’ jobs. Having that competence is critical to IKEA’s success.

 

[30:12] Having managed compensation strategies for many years, Tanja says wages typically tracked inflation. At the end of 2022, coworkers were getting offers of up to $5.00 more, going to other employers. The wage battle began. Tanja had never seen such an increase in wages: 6% to 7% in retail. Still, it was not in keeping with the inflation rate!

 

[31:29] To buck the trend of turnover and ensure that IKEA was being competitive, there was no choice but to increase the wages to match. IKEA’s growth and sales were not at the same pace because people didn’t have the discretionary income to spend on home furnishings. Industry growth is not yet in line with inflation but it’s getting closer.

 

[32:09] Employers need to pay attention to trends so their coworkers are earning competitive wages. The challenge comes in the correlation to inflation. Wage increases are not enough to combat inflation. At a point, wage increases start to impact company profits. Profits are necessary for investments in benefits and upskilling. Coworkers support company growth.

 

[33:19] It will be interesting to see, over the next year or so, where inflation rates land. IKEA continues to hear from coworkers that it’s still not enough but they recognize that IKEA is taking care of them. Tanja works with coworkers to understand their needs and challenges the management team to continue to make investments to balance values and business.

 

[35:02] It’s a matter of differentiating IKEA from its competitors. With a purpose-led approach and values, IKEA captures the hearts and minds of its coworkers and they are proud to be  IKEA coworkers.

 

[35:21] Michael calls out to other retailers to get on board to address those pressures for their companies to keep wages up or they will lose a competitive advantage to companies like IKEA, that do.

 

[36:19] Looking ahead, Tanja says IKEA is going to continue on its affordability journey with customers and coworkers. IKEA is looking at strategies to grow the business for the future and take care of its coworkers. IKEA is identifying priorities now for the next three to five years to ensure the right strategies going forward, keeping IKEA affordable for the many.

 

[37:30] Michael thanks Tanja Fratangeli, HR Lead at IKEA Canada, for joining us on What’s In Store and sharing insights on how to take care of customers and staff through trying times.

 

About Us: 

What’s in Store is a podcast series of the Hardlines Information Network. Today’s episode is brought to you by Jeld-Wen.

Resources:

Hardlines.ca

Michael McLarney

Guest: Tanja Fratangeli

Sponsor: Jeld-Wen

 

Quotes:

With people and culture, there are a lot of transferable skills. You’re dealing with people. There are a lot of commonalities. It’s just understanding the business and how to apply people strategies to support the business. — Tanja Fratangeli

 

As we all know, there is one in four Canadians now that is suffering with mental health. It could be anxiety, it could be depression, it could be a number of different challenges. — Tanja Fratangeli

 

One of my most important jobs is to listen to my coworkers. From a service office perspective — that’s what we call our head office — we believe that we’re there to serve our coworkers. It’s about making sure you’re paying attention to what’s important to them. — Tanja Fratangeli

 

Our customers want to shop and work with purpose-led brands. They expect greater transparency and accountability from those businesses. — Tanja Fratangeli

 

We wouldn’t have a business without our people. In all conversations at the table, we talk people and business together. That makes me really proud. — Tanja Fratangeli