Dive Brief:
- IKEA staff at the furniture maker's Perryville, MD distribution facility came close to striking last Friday before the company and its workers agreed to extend contract talks for two weeks, the Baltimore Sun reported.
- Local I-460 of the International Association of Machinists and Aerospace Workers represents the workers, who are seeking $1 raises and holiday leave, which would include Thanksgiving. Workers currently earn between $13.65 and $20 an hour.
- While talks continue, the distribution center will remain open. It currently supplies and transports unassembled products to 39 IKEA stores in the United States and Canada.
Dive Insight:
Warehouse workers are in demand like never before, and the competition to hire increasingly includes added benefits.
On August 2, Amazon held a mid-year job fair at various strategic locations with the goal of hiring 50,000 new workers. Full-time positions included benefits, while workers completing at least 20 hours received life and disability insurance, dental and vision, and contributions toward medical expenses. Higher pay is part of the perk package, with the industry average growing 6% from 2016 to 2017, with the mean recently rising to $12.15 this past February, as reported by logistics staffing firm ProLogistix.
IKEA's resistance to higher wages and holidays is a push back against present industry conditions. Though their hourly wage is slightly higher than average, an effective, experienced team is increasingly valuable as demands on warehouse performance rises. The addition of union support lends credence to the workers' demands, especially as negotiations grow heated in the face of management resistance. A united team of experienced warehouse workers could be snatched up by any number of busy distribution centers, including those of retail competitors. If IKEA resists compromise and protracted talks return to the possibility of a strike, its peak season performance may be put at risk.
