The Keys to Successful ERGs

Employee Resource Groups (ERGs) are invaluable for enhancing the employee experience and creating inclusive cultures. The social injustice movements of 2020 forced many organizations to analyze their DEI efforts, only to realize they were missing the mark. From reactive statements in response to protests to hiring chief diversity officers without providing them resources to implement change, the line between performative DEI and change-making is thin. With DEI spending projected to reach $15.4 billion by 2026, many organizations now realize that DEI is an integral part of operations.

What are ERGs and how can organizations promote them?

ERGs are internal groups that connect employees of similar backgrounds and lived experiences. ERGs can also include allies as well as executive sponsors. ERGs can encompass many identities, such as groups for Black and Indigenous employees to populations such as young professionals, veterans, LGBTQIA+, and women. Even though ERGs have become a post-2020 near-mandatory component of an effective DEI strategy, the concept is not new.

According to Diversity Inc., the first version of an ERG in the U.S. was created in 1964 by Xerox. The Xerox National Black Employees Caucus amplified Black voices to help push the needle on culture change. Since then, 90% of Fortune 500 companies have implemented ERGs. Looking for ideas on how to make ERGs core to your organization? Here are some tips from Forbes:

• Establish ERGs across a wide range of identities.
  In addition to traditional groups based on gender, race/ethnicity, and identity, consider ERGs for additional areas such as disabilities, caregivers, and more tenured employees. At the organizational level, provide all ERGs with a budget, meeting space, and access to company resources. ERGs must be inclusive, so ensure they are open for all to join and that their mission aligns with company values as a requirement for their creation. 
• Maintain a connection to the ERGs.
  ERGs can be a big culture driver for your organization. Having diverse voices within the group can help foster innovative ideas moving the company forward and enhancing inclusivity. They can help facilitate difficult conversations and provide a close-to-home resource for struggling employees. Consider utilizing them as a sounding board for new initiatives before rolling them out. Encourage leaders to support employee interest in pursuing leadership or active roles within their ERGs. 
• Celebrate the good works of your ERGs.
  Encourage executives and leaders to participate in ERGs and actively promote the group’s efforts internally and externally. Modeling leadership buy-in and engagement normalizes the ERG and can encourage reluctant employees to join. This buy-in also allows them to hear directly from underrepresented employees about their experiences at the company and how the organization’s DEI efforts impact their feelings of engagement and belonging.

How do ERGs enhance DEI efforts and the employee experience?

ERGs help drive effective DEI strategies. At a time when only 39% of companies have DEI-focused roles, ERGs can help bridge the gap. From helping underrepresented employee populations to attracting the next wave of talent, ERGs are good for business. ERGs give employees a shared space to share their stories and feel empowered. They also help non-marginalized employees learn more about the lived experiences of their colleagues and how they can move from passive to active allies. 

In addition to providing employees with a psychologically safe space, ERGs are vital for creating feelings of inclusion at work. A 2022 Ipsos study found that 88% of working Americans agree that belonging fosters increased productivity. They also noted that 76% of respondents felt belonging includes just and respectful treatment. Studies like these highlight the importance of creating a company culture that is employee-centric and helps employees feel comfortable bringing their authentic selves to work.

How can organizations better support ERGs?

Great Places to Work (GPTW) conducted a study on ERGs and noted a disconnect between how well executive sponsors felt the organization was doing compared to ERG leads. Their research found that while 100% of the interviewed executive sponsors believe that their organization actively supports ERG participation, only 52% of ERG leaders feel the same. These figures remind us of the age-old story—the disconnect of organizations that talk the DEI talk but don’t walk the walk. One of the primary indicators of an organization that doesn’t prioritize ERGs as part of its DEI strategy is where they allocate resources. The GPTW study noted that 51% of respondents said they have an annual budget of $5,000 or less. 

According to The Rise Journey, only 5% of ERG leads get additional compensation for the role. On top of their actual job, they are responsible for recruiting, engaging, and organizing activities for the ERG. With tasks ranging from organizing volunteer days and running the ERG’s meetings to sourcing a guest speaker/training opportunity or putting on an all-company activity, this is no easy task. This additional responsibility creates the “perfect” environment for ERG leads (who tend to be members of the underrepresented group) to feel burnout, face pushback and microaggressions from unsupportive colleagues, and feel frustrated from a lack of support from executives.

In addition to financial support for ERGs, organizations can also offer continuous learning opportunities that help foster cultures of inclusion. By incorporating lessons on topics such as active listening and emotional intelligence, ERG members can feel seen and supported and allies receive resources to educate themselves on the challenges their underrepresented colleagues face and become stronger change makers. This training can also serve as discussion starters for ERG meetings and arm employees with tools to navigate difficult conversations.

Companies can no longer coast on passive DEI policies—DEI is a business imperative and Environmental, Social, and Governance (ESG) necessity. The data speaks for itself: diverse companies outperform their less diverse counterparts in profitability by 36%. Start making investments in your people now by supporting and funding your ERGs. Your underrepresented employees and their allies will thank you.