Ericsson brings down hiring cost using incentive-based employee referral programme


The programme has not only helped the company reduce cost per hire but also increase retention rate.

Ericsson, the Swedish telecom equipment maker has been getting the best out of its employees through the incentive-based employee referral programme, since 2013. Not surprisingly, the company plans to continue with the successful initiative. The ‘Get Connected’ – Ericsson Employee Referral Programme has so far been a talent churner for the company. 45 per cent of the people added to its workforce in 2015 were through the same, and the figures have certainly risen since its launch in 2013.

The incentive-based employee referral programme has been aiming at encouraging the employees to refer qualified applicants for the roles that Ericsson opens up for external hiring. The company truly believes that employees can help in the best ways to create a talent pool for organisations.

Sameer Khanna, V-P and head-HR at Ericsson, says, “We believe that some of the best recruitments are made through referrals. An existing employee knows the organisational values, culture, and role expectations well. Besides, such programmes help speed up the recruitment process”.

Khanna also shares that Ericsson has a comparatively lower attrition rate in the industry. The programme enables them to retain and engage the best talent, as referrals are rated as one of the most productive sources for quality hires.

In addition, Khanna states that, “Employee referral programmes are a great source of passive candidates—individuals who are not actively looking for a job”. With a staff of over 21,400 people, India is the largest employee base for Ericsson globally, even more than Sweden.

Sameer Khanna

An employee referral programme of this scale not only helps cut costs for an organisation, but is also the biggest driver for building a strong employer brand.

Talking of the win-win situation created by such initiatives, Khanna says, “Employee referrals not only reduce the cost per hire, but also give employees an opportunity to earn some extra rewards. Referred employees have higher retention rates and increase employee engagement”.

The success of an employee referral programme is a reflection of how its people perceive an organisation. This is why, Khanna believes that employees are true brand advocates and a good referral programme starts with creating a work culture that has a positive employer brand.
“By attracting top talent and engaging employees to boost sourcing channels from their connections, employees provide the best authenticity for an employer brand”, he says.

Looking at the increase in percentage of people added into the workforce since the ‘Get-Connected’ programme began, one can easily vouch for such an initiative.

“The increase in referral percentage clearly shows that a large number of our existing workforce believes in us and wants their colleagues/friends to join Ericsson”, Khanna concludes.

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