1. Benefits: the hidden gap<\/strong> <\/p>\n\n\n\nOne of IKEA’s key early learnings was that benefits were the least consistent, and least understood, part of their reward offering \u2014 yet they had a real impact on fairness, noting that ‘benefits is often the thing that creates the gap’. While pay had historically been managed centrally, benefits were handled at a local level, making them harder to compare and benchmark across markets. <\/p>\n\n\n\n
IKEA also recognized that employees often underestimated the value of their total reward package, meaning these gaps weren’t always visible. <\/p>\n\n\n\n
As a result, IKEA has shifted its approach: treating benefits as a core part of pay, rather than a separate set of perks, and bringing them into a more consistent and transparent total reward conversation.
2. Managers, not systems, should lead conversations<\/strong>
One of the clearest choices IKEA made was to put managers at the center of pay conversations. In practice, it\u2019s managers who shape how most employees experience the organization day to day. When questions about pay come up, that\u2019s who they turn to.
IKEA invested in helping managers really understand how pay decisions are made, what data sits behind them, and how to explain that clearly. Just as importantly, they created space for managers to practice having these conversations.
3. A simple pay philosophy is more effective than a complex one<\/strong>
In contrast to highly engineered frameworks, IKEA anchored its approach in two factors: <\/p>\n\n\n\n\n- Competence\u00a0\u00a0<\/li>\n<\/ul>\n\n\n\n
\n- Performance\u00a0\u00a0
\u00a0<\/li>\n<\/ul>\n\n\n\nThis simplicity is intentional. It allows for clearer communication and reduces the risk of misinterpretation. <\/p>\n\n\n\n
4. Transparency depends on explanation, not just disclosure<\/strong>
Making pay visible is only one part of the equation. IKEA placed equal emphasis on ensuring employees understand: <\/p>\n\n\n\n\n- The full value of their total reward\u00a0\u00a0<\/li>\n<\/ul>\n\n\n\n
\n- The rationale behind it, and\u00a0\u00a0<\/li>\n<\/ul>\n\n\n\n
\n- How they can influence future outcomes\u00a0\u00a0
\u00a0<\/li>\n<\/ul>\n\n\n\nThis moves transparency beyond disclosure toward something more constructive \u2013 a shared understanding of progression. It also addresses a persistent issue: Employees often undervalue their total reward, reinforcing the need for clearer communication.
5. Perceived fairness is driven by clarity<\/strong>
Transparency will inevitably highlight differences in pay. What matters is whether those differences can be explained.
By linking pay to factors such as experience, capability and role scope, IKEA focuses on making those explanations clear and actionable. When employees understand both the rationale and the path forward, pay transparency becomes less about comparison and more about progression.
6. This isn\u2019t only about compliance <\/strong>
As Konstantinos Karavidas, global head of reward at Ingka Group (IKEA), put it, pay transparency isn\u2019t something they\u2019re doing because they have to. It\u2019s something they believe they should be doing anyway.
Rather than treating it as a compliance exercise, IKEA has framed transparency as part of a broader goal: improving fairness and employee experience. The regulatory requirements are seen as a baseline and not the end goal.
This mindset will feel natural to many Nordic organizations, where trust between employer and employee has traditionally been high, and where fairness is a cultural expectation rather than a legal obligation.
7. You don\u2019t need everything fully aligned to begin<\/strong>
It’s easy to assume that pay transparency requires everything to be perfectly in place: aligned data, consistent structures, and clear answers across every market. In practice, that’s rarely the starting point. <\/p>\n\n\n\nIKEA acknowledged that, like most organizations, it is working with a mix of legacy decisions, local variation and evolving frameworks. Rather than trying to resolve every inconsistency upfront, the focus has been on building understanding and improving clarity over time. <\/p>\n\n\n\n
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