Ikea Stores in Malaysia End Ties with Labor Provider Over Recruitment Fees

Ikea, the world’s largest furniture retailer, has parted ways with its security services supplier after reports emerged of a labour policy violation. The decision highlights the retailer’s commitment to ensuring ethical standards and workers’ rights are met throughout its operations, including its supply chain. The move comes at a time when businesses are being scrutinized for their practices, and it raises important questions about the role of companies in upholding ethical standards across their partners and contractors. In this article, we delve into the reasons behind Ikea’s decision and what it means for the wider business community.


The Malaysian Ikea stores have cut connections with a labour provider due to a violation of the furniture store’s policies that were discovered through an internal investigation. Ikea’s investigation began after campaigners reported that Nepalese workers had paid high fees to obtain jobs as security guards in Malaysia. Several security guards in Ikea’s Malaysian stores paid fees to secure jobs, according to the investigation, which was led by Inter Ikea and Ikano Retail. Ikano Retail has confirmed that many security guards in their Malaysian business had paid recruitment fees, which contradicts their code of conduct. Ikano Retail confirmed that the matter was reported to the local authorities and the Nepalese embassy. They have also secured a new supplier that will directly recruit workers rather than through subcontractors. Recruitment fees are common in many developing countries, and workers usually take out loans to cover the costs. Multinational brands that rely on local agents are often unaware of issues in their supply chains.


In conclusion, Ikea’s decision to sever ties with its security services supplier over labour policy breach is a significant step in upholding ethical labour practices in the retail industry. While the decision will come at a cost to the company and may impact its operations in the short-term, it sends a strong message that corporations have a responsibility to ensure that their suppliers uphold fair labour practices. Hopefully, this move by Ikea will encourage other companies to take a closer look at their supply chains and work towards eliminating unethical labour practices. By creating a culture of accountability and transparency, we can ensure that no worker is subject to exploitative labour conditions in the pursuit of profit.