Ericsson's Commitment to Their People

Originally published in Ericsson's 2021 Sustainability and Corporate responsibility Report

Ericsson is committed to placing its workforce at the center of everything the Company does. Ericsson strives to create a people experience that enables employees to realize their full potential and, in doing so, creates long term value for the business.

This people experience is shaped by Ericsson’s purpose, vision and values. In 2021 the Company added integrity to its existing three values of professionalism, respect, and perseverance. This reflects Ericsson’s commitment to ethical, responsible, and sustainable practices and its pride in making transparent, honest, and uncompromising decisions. Ericsson embeds its values in its business through the Company’s ongoing culture transformation program, Ericsson on the Move. This program has five focus areas: Empathy and humanness, Cooperation and collaboration, Executing speedily, Fact based and courageous decisions and Speak up.

Ericsson is committed to ensuring that its workforce has the diverse skills and capabilities necessary to create value. In 2021 Ericsson invested in enhancing talent attraction, providing targeted learning and development and strengthening retention of talent. This was paired with action to protect workforce well being in the context of the continuing challenges of COVID-19.

Identified risks and opportunities

As Ericsson moves into 2022, it is mindful of the following risks:

COVID-19: COVID-19 continues to create challenges for the health, wellbeing, and worklife balance of all of Ericsson’s workforce. In particular, the impact on schools and family life are disproportionately impacting women, potentially increasing attrition rates. This is occurring at a time when Ericsson is seeking to increase gender balance as part of its strategy to ensure access to the whole talent pool to meet future business demands.

Talent attraction and retention: According to external reports, approximately 40% of the global workforce is considering changing jobs in the next three to six months¹). Ericsson is already in a highly competitive market with skills shortages, and there is a risk that the Company cannot hire sufficient people with the key competencies and skills required by the business. To mitigate this, in 2021 Ericsson launched a new segmented recruitment model, which leverages the latest artificial intelligence technologies, to improve the candidate hiring experience.

Ericsson is also focused on capitalizing on opportunities including:

Upskilling for the future: Ericsson’s business growth requires that it has world-leading capabilities connected to its strategy. Moreover, it is important for Ericsson to build these critical skills in anticipation of their relevance to future development. This is the basis for its focus on broad and deep upskilling in the workforce, which creates a strong employee value proposition in the market.

Attracting new and diverse talent: Ericsson has the opportunity to attract new and diverse candidates through an employee value proposition grounded in a human and empathetic experience of work. The Company’s recent investments in cultural transformation (Ericsson on the Move) and its revised purpose, vision and values put Ericsson in a good position to attract new candidates.

Enhancing workforce well-being: Ericsson is well positioned to support its workforce in maintaining their productivity and wellbeing during challenging times. In 2021, Ericsson built on its systematic approach to well-being through the Ericsson Care program with tools and assets that are easy for employees to access. To support the workforce through the challenges of COVID-19, Ericsson also provided additional financial flexibility in locations where this was most needed, for example, salary advances. An Ericsson survey revealed that 90% of employees believe that a genuine interest has been taken in their well-being. This further enhances its employee value proposition.

Delivering on our People Strategy 2021

With its People strategy, Ericsson seeks to enable the future success of its business as the Company gears for growth, with a focus on three strategic people areas detailed here.

Talent and Skills: Ericsson works to ensure that it has the best talent in its business, where people are performing at their best. This is grounded in data-driven insight through global People analytics and workforce planning. Ericsson is committed to accessing the whole talent pool to meet future business demands. To deliver on this, in 2021, Ericsson launched a program of work to enhance the candidate hiring experience, including ensuring both that candidates from different backgrounds are represented in Ericsson’s hiring process and that the hiring process is tailored to the many different roles the Company recruits at any one time. This complements Ericsson’s ongoing work to increase representation in Science Technology Engineering and Math (STEM) fields, which includes partnering with organizations such as Black Girls Code in the US to increase the diversity of the future workforce.

Ericsson works to ensure that, once in the Company, people can perform at their best. In 2021, Ericsson delivered on this by clearly signalling the global, critical skills necessary to execute on its 2025 growth strategy and providing learning and development opportunities that enable the workforce to upskill and reskill in these areas. The critical skills identified are a mix of technology, including 5G, Internet of Things (IoT), artificial intelligence and sales and commercial as well as power skills such as transformation, design thinking and communication.

In 2021 over 97,000 employees actively used Ericsson’s learning platform to upskill, completing 3.1 million learning sessions and earning more than 10,000 new credentials, such as digital badges. This represented a 64% year over year increase in the amount of learning. Employees together with their managers set individual career and learning plans and follow up on these throughout the year.

Diversity and inclusion: Ericsson aims to ensure that people from different backgrounds can succeed in the Company, and in 2021 there were a growing community of Employee Resource Groups to support this. The Company also continued its work to achieve greater gender balance with its leadership acceleration program for women, ALTitude. Since the program started, 26% of the 257 participants changed roles, and 23% had a change of job stage (seniority). Ericsson will scale the ALTitude program in 2022 alongside expanding a leadership training program piloted in 2021 to embed inclusive behaviors.

Ericsson matches its commitment to diversity and inclusion with public targets, and in 2021 the Company reviewed and reiterated its target of 30% representation of women in the total workforce, among line managers and in the executive population by 2030. Representation of women is currently at 25%, 21% and 36% respectively. This target is driven by the Executive Team, alongside greater focus on representation of nationalities and age groups and is underpinned by targets for each Business Area and Market Area.

To ensure it attracts and retains candidates across the whole talent pool, the Company is addressing the gender pay gap, which at the global level equates to an unadjusted average pay gap of women in relation to men of 18%. Among other things, this figure reflects the higher proportion of men in senior leadership positions and in technical roles. To ensure Ericsson continues to make progress in this area in 2022, it will continue to make inclusion and fairness a focus in training for leaders and a review criterion in reward processes.

Culture and Leadership: Ericsson supports all employees in being courageous and ethical. The addition of integrity as a new value, including performance metric, complemented the existing Ericsson on the Move global culture transformation program, which, to date, has engaged more than 80% of Company leaders in workshops on how to embed Ericsson’s culture and values in the business. The Company also launched the revised and enhanced Code of Business Ethics, which was embedded in the business through a new approach to compliance training.

The impact of these actions is reflected in Ericsson’s employee survey, where the highest score is in Ethics and Compliance, with 91% of respondents stating that they agree that Ericsson is showing a commitment to ethical and responsible business.

Future of Work: Ericsson is focused on being an attractive company for which to work, where everyone feels included and proud to belong to a caring technology leader.

In 2021, Ericsson worked to drive engagement, with a particular focus on preparing for the future of work. This included supporting more flexible ways of working, particularly through COVID-19, and providing wellbeing support for employees in challenging situations. Ericsson adjusted local rewards policies to better fit changing needs. For example, the Company provided enhanced support and coverage for COVID-19 cases, enhanced Employee Assistance programs and access to telemedicine and IT support.

In preparation for a phased return to the office, when and where it is safe to do so, Ericsson’s leaders have been trained in new ways of working and leading that promote flexibility, well-being, belonging, and performance in the hybrid workplace.

The impact of these actions is apparent in Ericsson’s employee satisfaction score, which is currently at 81 and has been stable and above 80 the last two years. This is above average for the technology industry (73). After several years of steady increase in different employee engagement dimensions, Ericsson saw a stabilization of scores in 2021, with a slight decline in some dimensions in Q4. This decline is consistent across industries and may be linked to pandemic fatigue. While being above average of the technology industry for all areas measured, Ericsson is addressing the outcome through its cultural transformation to avoid a downward trend.

Governance

Ericsson’s People Strategy is governed by Group Function People, with the Global People Leadership team having responsibility for strategy formulation and execution. Subject matter experts develop Group-wide processes that are embedded throughout business and market areas, and other group functions by unit people leaders. A global people services function supports the delivery of the people process in an efficient way, ensuring consistent practices across the business.

The People Strategy is anchored on Ericsson’s Code of Business Ethics and summarizes the fundamental Group policies. The People Group Policy states that all activity relating to the workforce, including employment, development, compensation, and benefits, will be carried out without discrimination and with equal opportunity for all.

¹ ) https://www.mckinsey.com/business-functions/people-and-organizational-performance/our-insights/great-attrition-or-great-attraction-the-choice-is-yours