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Welcome to Mercer's podcast series on the New Shape of Work. I'm Kate bravery, Mercer's advisory and insight leader. And today, we'll be diving into the number one priority for many is on the call. And that is enhancing the employee experience. Specifically, we'll be chatting about the role that benefit evolution can play in that critical employment deal. And I'm so excited to welcome Andrew Pilbeam, head of global total rewards at Ericsson. Andrew, it's wonderful to have you on the call today.

Very happy to be here, Kate. And I'm looking forward to it.

Yeah, me too. I'm looking forward to catching up on all that you've got going. I know it's been a monumentous transformation evolution of the total rewards proposition, so I'm looking forward to learning a bit more about the specifics on the call. Well, Andrew, why don't we actually just get going? Your benefit evolution has touched many different areas and for me, the excitement really comes from how interconnected it is.

I wonder if you wouldn't mind just maybe level setting on what is Ericsson doing as a firm, and how does the journey that HR is on sit within it. OK. All right. So Ericsson is providing the network solutions for the enablement of the technology developments that we're all witnessing at the moment. So we're an important part of the rapid development that we're all experiencing in the technology space.

And what's very important part of our business is the ability to innovate, to constantly keep moving forward. In other words, we need highly skilled people, talent availability, et cetera. And that's a core part of what we're doing. Of course, the remit within that is around how do we enable the attraction, the retention and development of this-- our employees and to meet the business needs.

So we have a strong requirement from the business around skills and talent. We also know employee expectations are changing, Kate. People are looking for much more from an experience perspective. They want clear understanding of the purpose of their work. But increasingly, we are seeing expectation of flexibility, how and where they work but also in how-- flexibility in how they're rewarded and supported. And that also combines with the need for career growth, development, et cetera.

Given the industry that you're in and the huge tech transformation going on, and if I wasn't sitting in HR listening to this call, I might think that's a pretty tall order. Tech talent-- attracting, retaining, focusing on the AX, making sure that we're galvanized with the purpose and flexibility all to boot. So I'm really excited to do one click down. Tell us a little bit about this, which I would describe as a large transformation that your currently leading in total rewards. Maybe we can start with what was the catalyst for this work and then give us a feel for the shape and breadth?

Yeah. So just to build on what you're saying, it's a lot of ongoing, but then we have the general environment around us has changed rapidly. It's extraordinarily fluid the last few years, and the operating environment that we're all in has adapted really fast. We've gone from having the COVID pandemic. We all saw changes in the people movements. Our attrition levels started going up. We then hit inflationary pressures. We've had other economic challenges coming at us over the last 12 months as well.

And of course, that-- all of the time we know the availability of skilled, talented resources is still tight. So the world we're operating in is really rapid and fast changing. So we all know compensation is forming the key baseline for how we manage attraction retention, but we also know we need to clarify and expand on our employee experiences that we offer. We don't have unlimited budgets from the compensation perspective so we need to make sure that we understand how and where to invest from the employee experience perspective.

So when we went through the lockdown period, we saw much greater attention and ability to discuss topics like flexible working and well-being but whilst the business leaders all understood we need to do these sorts of things, they also struggled to acknowledge and to make available the funds to do some of that investment, even though in the scheme of things maybe not so large, but because we kept talking about things on an individual basis, we kept seeing that yes, the desire was there but the ability wasn't always there and that causes a challenges.

So we get back, and my team and I, we started thinking we have a vast pension and benefits spend. So we also knew that we were operating in quite a fragmented way, so we had same vendors in multiple locations, not on one contract. We had global benefits management in place, but was it really getting the best value that we wanted out of things? We also knew we're not using digitalization and tools consistently everywhere.

And so we actually started to realize that through smart approaches, we could bring in quite substantial savings into the organization. So when we start looking at things from a holistic perspective, we were able to build a very strong cost case, saving tens of millions of dollars if we were smart and wise. So we also knew that actually by having a more consistent approach, we will reduce the risk levels to the organization in the areas of benefit pensions, but we also could clearly see we would be able to enhance our offerings to employees.

So we managed to build a case that got approved through the business from a financial perspective, but also ensuring that we reduce risk and enhance the employee experience. So that's really the links to the catalyst, and then how we brought the case forward.

That's wonderful, because one of the things I really wanted to dive in today was just how did we get that ambitious agenda over the line with executives. And I think the thinking around what are some of the savings that we can have by being more digital, more efficient, more connected I think is really interesting. But anything else you would share around how you pitch that to executives? Cause this is a multi-year program.

It is a three year program. So we pitched it as a huge opportunity for us that met several of the business requirements-- cost control, right? Everyone wants to control of costs, but we need to improve the employee experience. So we were able to show, through case examples, where we would be able to get benefits. So I'll pull one out. So for example, we have employee assistance programs operating in several of our countries. We're in over 180 countries, by the way, so it's a vast footprint. So all of those are negotiated on a very local basis.

So what we realized was A, we had a series of employees not getting access to that type of support. But actually, if we went for a more consistent usage of one or two vendors, we can negotiate a better deal, get offering out to everybody and actually have the opportunity to be cost neutral or potentially even save costs. So all of a sudden when you start thinking about it in that lens, we're ensuring all of our employees get access to the same platform, but we're also bringing in those elements of control and risk management that the business is also interested.

Now how important was technology to being able to deliver on that?

So of course, all of-- when we start rolling this out, we're looking at the technology in terms of how we do that. So technology is wide in this area, right? So we have tools for the sort of employee benefits management, the total reward statements. So things like that-- the Mercer Darwin. So we've actually set about rolling that out as a platform across the business. Some of our countries already have tools-- that's fine-- but we've got a lot of countries who don't.

So digitalization forms a key part. It improves the employee experience. It means we can be consistent in our communication of the linking into our culture, linking into what do you receive from us. It means that people can actually have access to much more choice when it comes to the employee benefits or pension retirement offerings, et cetera. You can do the total reward statement, et cetera.

So digitalization forms a key part of what we're wanting to achieve at the moment as well. So building out the platform and the environment that's consistent across the business to give people understanding of what they're getting from us.

And it's interesting that the example you gave was the employee assistance program, or EAP. That's one that I think has been under a lot of pressure over the last couple of years, just because of what we've gone through in the last couple of years. And it really has only been the last couple of years. I was listening to you talk there and I was thinking, gosh, it's almost bookended by the pandemic and now ChatGPT. That has only been two and a bit years. It's absolutely stunning.

But I'm just curious. Health and well-being is a topic that became absolutely critical during the pandemic, and now I think people are making some changes there. Since you brought up EAP, can you share just what your thinking is around the well-being aspect?

Yeah. So it's a core part of what we're committed to giving to our employees. We're clear on that in our various statements. Health, safety, well-being of our employees is a key focus area for us. There's multiple reasons for that. Firstly, the empathy humanist part. We want everyone to be fit and healthy, but we also know that people who are fit and healthy are going to be more productive.

And so that's the angle we take with the business and on the investment into these things and how to make sure we got the support out there for people in the various forms, whether it's physical, mental, financial or social being.

OK. Great. A broad proposition. Well, bring us up to date. I mean, you did kick this off two years ago, which at the time was a really interesting time to be revolutionizing the value proposition, but I would say earlier than many other companies were doing that. I'd love to hear what the journey has been. What have you already achieved, and maybe what's left on that roadmap?

Yeah. OK. So-- well, I'll start with saying is it's been a fascinating experience. And I think we're justifying that this has been a worthwhile venture. First year was 2022. We had clear savings targets there which we achieved. We also managed to build out our team-- number of team members and the level of expertise in the organization around this. We were able to really focus in on the structural approach, the systematic approach taken to build out the program.

So for example, we put a lot of emphasis on improving how we look at global benefits management, the insurance programs, et cetera. We looked at how we make sure where we've got the same vendor on multiple agreements, bringing it into one agreement, negotiating through that. So we worked through carefully de-risking some of our pension plans. We negotiated broker fees.

So systematically working through a series of things to help us achieve those savings targets. From a risk perspective last year, we were strengthening our governance around pension and retirement, making sure we're better understanding of what's going on in the organization and reducing the risk there. But we also wanted to help employees from that risk perspective. So we did education sessions around pensions in multiple places, et cetera, and what employees should be looking at in terms of what they get from us and where they can make choices.

So how do you help people understand that landscape? So risk from employer perspective, risk from employer perspective. And from an engagement perspective, not so much about benefits, but also a core part of experiences, we launched a global recognition platform. We launched a global volunteering program. So that comes more into the benefit space. But we also promoted access to a global online being app. We launched that through COVID times, but we've continued with it, and we continue to promote the usage of that and so that employees know they've got the support around them.

That's very much the global perspective, but we also were driving lots of local programs too where they're reviewing their employee benefit offering, making sure they're relevant, meaningful. Can they be adjusted? Can they be improved? Can we bring savings on those as well? So it was really run globally, but also into the local elements too. And how do you keep thinking through the elements of cost management, risk management, employee experience.

I really like the way that you've balanced risk for the company and risk for the employees, really extending that duty of care. I wonder if you could give some examples of maybe also some of those cultural differences that you talked about? And you and I have had many conversations about cultural differences around the world when I was in Asia. And yeah, I was just curious, when you start to look at flexible working, when you start to consider people who take leave and don't take leave, where have you tweaked some of your policies to make sure it resonates locally?

Yeah. So that part is work in progress. We have a stream that's coming through in year two and year three around flexible working. And so we're starting to look at parental leave. We're starting to work out minimum expectations on parental leave so that we have one voice across the organization, our stance around parental leave, for example, but also understanding the differences you called out.

So for example, places like Hong Kong or India is going to have very different structure to the European countries. So how do we understand what's normal in say, Sweden where we're headquartered and is not so normal in some of these other countries? And how do you help the business understand these are worthwhile investments? And again, like many of us strong diversity inclusivity agendas as well, and of course parental leave feeds into how we have a balanced workforce from the inclusivity perspective.

So how do these things form? And how when we come out with global minimum levels, how do we make sure we've got the balance across the organization? And people understand why, if it goes beyond their market practice, it's still a good thing, and it helps them attract and retain coming back to our earlier challenge of making sure we've got the skills and the talent. So how do you fit that alongside?

As you walked through the range of activity that you've got going on, some of it to optimize costs, some of it to enable workers to make better decisions about their lives and some of it to actually enhance the employee experience, how are you tracking the impact on employees? I'd be curious to know what metrics you're looking at because you said it is about these global commitments, and so as we talk about how you've made progress there, I'd be just curious on the mechanism.

So you have the common metrics-- your employee engagement, your attrition levels, your time to higher levels, mothers returning from maternity leave, parental leave. And so using all of that type of data and of course, no one element of this program is going to be the only thing that drives those things. It's the sum of all of the parts of what we're doing. So constantly tracking ourselves against other companies, constantly tracking ourselves within Ericsson around do we see differences of employee attrition or these different aspects and can we learn from one another.

Can we learn, externally, what's going on as well. And how do you promote that sense of the Ericsson culture and how that impacts into this. So data-- all of these data points and many others really critical for us to understand what's going on.

Fascinating. As you're talking there, obviously a lot of this sits within your team and the broader HR team to execute but also as these new programs are coming out, it's a lot for employees to recognize and appreciate some of that. So I'd be just-- coming up time and time again in our research is just how many internal projects and the amount of information and how that actually holds people back in effective transformation. So I'm curious, how did you clear the airways? What learnings have you had about how best to position this with employees or maybe even some advice you might give for others embarking on a similar journey?

So we're still on that journey, right?

Yes, of course.

But we have to work with our talent acquisition colleagues, making sure the proposition is understood when we're attracting people into the organization. But from the retention aspect, employees in the organization, to their motivational part, the tools, the platforms, the digitalization are really critical because that is a space where we can make sure the messaging is clear and succinct at a global and country level, and you're joining up the parts.

So you need to be able to communicate through tools that employers will access. We have our intranets. We have the internet. We need to have those platforms communicating too, but we also need to, increasingly in my view, we need to make sure managers understand that the offering that Ericsson gives to the employees too, so they're comfortable as best as possible to talk it through with the employees as well, or at least know where to steer them, and whether it's the Ericsson for me digital tool that's coming out or whatever.

So we're trying to build that ecosystem which makes it more easier for people to get access to what we have. Because to your point, we offer a lot, right? Like most companies. So making sure people have the accessibility into what we actually offer.

I think we're all waiting for the day when there's large language models will just give us the answer of benefits that are going to actually give us the best long-term health or wealth, but we're not quite there yet. And you mentioned a couple of stakeholders there. Obviously the people manager population and employees. I'd just be curious, what are the segmentation's do you specifically look at or personas within the organization?

Yeah. Again, so we're over 100,000 employees. So we have a wide diverse workforce. So again, we know the retirement benefit, flexible working, well-being offerings need to be geared up for the different personas you talk about. And how do we make sure we have offerings that attach to different types of personas because one size doesn't fit all. In this space, it never has and I don't think it ever will. So therefore, you're into how do you make sure flexibility and choice can come through to enable that sense of the different personas having what they require from this.

So Andrew, if I had been one of your team members or been an employee on the ground over the last couple of years, what would I have seen? What would be different in my day to day world? Was this something I would hear about once a year in open enrollment? What would change for me?

I think what we're transforming is the accessibility to consistent platforms, tools and offerings. So for example, the employee recognition platform, same platform everywhere. Before managers with teams in multiple countries, I've had to use multiple platforms or they had to use Excel. So now they're able to access through. So it's very subtle. But I think that these sorts of changes, and as we bring other things through. It's more this accessibility is getting cleaner.

The other bit that we're able to do, which I think is really important is we're able to have one voice on these employee experiences, whether it's volunteering, which rolled out, again, globally last year, the recognition, whether it's the stance we will take in the future around potentially parental leave or the minimum life insurance levels or the EAP. So what that enables us to do is talk about things consistently across the group and knowing that everyone's receiving the same offering through the same platforms. So I think that's really important, and it means it's very subtle, but it's that's what's changing and the environment that people receive information through.

There's almost a balance because you've got that kind of subtle evolution, and then you've got this rather loud vocality around what you actually care about and what you stand for. And you and I have had many conversations on the Good Work Alliance and some of the mission there to raise the voice on what companies really do commit to their employees. And I think this is very much in the similar vein. Very exciting.

--feeds into that, Kate. And you and I have had that conversation before where you're like, oh, it fits very much into that agenda, and that's not always been our start point. But what's fascinating about this whole area, it feeds into so many different aspects. The touch points from a company perspective is very wide, whether it's a sustainability agenda and focus, the D&I side, whether it's being a great place to work type thing, the employer experiences. But all of what we're talking about here touch so many different aspects of what we're all working on in our organizations.

I totally agree. And I think you and I are both very passionate about this sort of connected up proposition. I agree with you. I think people are really grappling with how do we define the S in ESG? And how do we make progress on the experience and sustainability and affordability at the same time? And maybe you could come off mute a little about why is it just so damn hard to actually deliver on that sort of connected total rewards as part of a broader employee experience?

Yeah. So-- I mean, I think we're coming-- I'm coming from rewards, compensation, benefits. A lot of what we're talking about here we're moving on beyond that original definitions, and we're talking much more about employee experiences in a holistic way. Doesn't mean total rewards owns all of those things. But we are a voice that is able to connect and work with our colleagues around volunteering programs or well-being, et cetera, which not necessarily owned by us, but from an employee experience perspective, we have a big understanding of in the reward space, but also the ability to do the change programs as well.

So I do see-- I do see the work we're doing or able to do can be much more from the employee experience perspective and joining into those elements.

And last question only because we're coming to the end of our time, Andrew. Where do you think total rewards is heading? I mean, total rewards in the way you describe it where it is very much connecting compensation and benefits and flexible working retirement altogether actually hasn't been around that long, but where do you think its next evolution is? Or if people want to move into that area, where should they be building skills and thinking about orientating their career?

Yeah. So I do think it's the coming together of all of these different aspects from your compensation, pensions, benefits, retirements, well-being. But I do think that when you think about the proposition to employees, we can go so much wider than that, and what I would like to see happen. And I hope will happen is that the experience of the total rewards teams can get expanded a little bit into more of this employee experience perspective and aligning on that and working with our colleagues across the business around sustainability or D&I, and how does this stuff all connect together.

And ultimately, this is about how do you position the experiences to the employees to help them be aware of what they get. So I think the total reward space can certainly bring a lot to the table in those perspectives.

As I'm listening to you talk today and your passion for the employee experience, that word connector really does resonate for me, and I probably haven't seen total rewards in the light of being that connector that delivers on the promise of the EVP in a really practical way for the people. So thank you so much for sharing those insights and learnings today, Andrew. It's been great. I'm really glad I finally was able to get you on here. So thank you for joining me. I made a few notes of the things that I think stood out for me.

One, if we're going to get some of these big evolution's or transformations over the line, we've got to be able to show the commercial benefit to the business as well as the risk benefit and some case endpoints can certainly help with that. It can't just be good for the employees. We've got to demonstrate that benefit which I think was really key. We talked about the importance of digitization to bring some of those savings in, but also the communication piece so that people experience them.

You mentioned having the right team to deliver. And I do know from other conversations that we've had getting that in place early so that we can actually execute appropriately. It was really important. I loved your commentary about one voice. This gives us a chance to say what we stand for and come off mute with that, but we've got to balance that with local understanding. Metrics can certainly help so that we can see how we're tracking and where we're going.

And just balancing that, got to make it accessible and a subtle evolution so we don't overwhelm people, but actually be pretty loud about where we're heading purpose and strategy wise. I love it. And you've got me thinking, again, about if we really are employee experience driven, and we're looking at the different personas. We just need to make sure that our functional silos don't get in the way of delivering up that connected proposition everyone's looking for.

That's very good. Yeah.

Thank you. I hope everybody else on the call also has lots to think about coming out of today's call. Listeners, thank you for taking some time out of your busy days as well to join us. If you'd like to hear more on today's topic or indeed other issues related to the New Shape of Work, please do check out mercer.com where you'll find lots of other points of view, and our other interviews in the series. Wishing everyone a great onward day. And thank you again, Andrew, for joining us on the call today.

My pleasure. Thank you, Kate.

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