Kitchen cabinet fronts made at Ikea’s factory in Älmhult.
Photograph by Andrew Hetherington for Fortune

Company is already reaping the benefits of the last pay hike.

By Daniel Roberts
June 24, 2015

Last June, Ikea announced it would raise its hourly minimum wage in U.S. stores from $9.17 to $10.76, a 17.3% hike. Now, almost exactly one year later to the day, Ikea is doing it again.

The Swedish furniture giant says the pay will go up to $11.87, a 10% increase for Ikea and a whole $4.62 above the current U.S. federal minimum wage of $7.25. (There is a movement underway to bring that up to $12 by 2020.) The hike will take effect on the first day of 2016 and will have an impact on 30% of Ikea’s U.S. employees.

 

This is a smart business move by Ikea, which has been expanding globally at a rapid pace, and it is one that will inevitably reap good P.R. The last time around went well for the company: Rob Olson, Ikea’s U.S. CFO, told the Huffington Post that in the six months since the last hike, Ikea has had 5 percent less worker turnover and is already attracting better talent.

Ikea was one of Fortune’s Best Companies to Work For in 2006 and 2007, but then dropped off the list. Perhaps its continued attention to better worker wages will get it back on.

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