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Employee Resource Groups - are they working for you?

Diversity, equity and inclusion have no doubt been a key topic on the agenda in many workplaces over the last 2 years, and given the increasing focus on DEI initiatives, it’s no wonder that Employee Resource Groups (ERGs) are on the rise.

In 2023, attracting and retaining talent is a CEO's top priority, as per a Gartner 2023 CEO survey. One of the most effective strategies to attract and retain employees is investing in operationalizing Employee Resource Groups (ERGs), otherwise known as employee networks or employee committees. Companies that operationalize their employees' networks and that invest in educating their ERG Leaders attract and retain talent significantly better than companies that do not.

ERGs have been around for many years, with the first ERG, The National Black Employee Caucus at Xerox created in 1970, but in recent years they have increased significantly in popularity. According to a report by McKinsey around 90% of Fortune 500 Companies have an ERG.

So first off, how exactly is an Employee Resource Group (ERG) defined? Well, an ERG is a group led by employees often on a voluntary basis, which aims to support the creation of a diverse and inclusive workspace. An ERG connects members who share similar backgrounds, identities and interests. ERGs, sometimes known as employee networks or affinity groups, can have varying objectives, but their main aims are to foster a diverse and inclusive workplace culture and to build supportive communities at work.

What are the benefits of an Employee Resource Group?

  • ERGs can promote inclusion because they help their members to feel like they are part of a community and instil that sense of belonging that employees strive to feel. Employees feel heard, accepted and represented. This can have a potentially positive impact on the organisation as employees have improved morale and employee retention is higher.

  • Employees in an employee resource group can meet and connect with other employees including leaders which can support their professional development through mentoring, improved visibility and career progression opportunities.

  • ERGs can give members a shared voice to communicate about issues within the workplace and advocate for change.

  • Some ERGs work closely alongside HR in order to support talent attraction initiatives particularly of underrepresented groups by participating in interviews and recruitment events.

  • Nearly all respondents in a survey by Salesforce found that “ERGs boost company culture and champion DEI initiatives.”

So with a clear business case for ERGs, why is it that some organisations are still struggling to get their ERGs right? Why do some ERGs fail to thrive? From speaking to many organisations and in our research we’ve listed below our top common pitfalls of ERGs.

  • A misalignment between leadership and the ERG in terms of role, aims and objectives. According to a McKinsey article, sometimes the role of the ERG set by the DEI department doesn’t coincide with the role the ERG sets for itself. Essentially the DEI department believes the ERG is established for one purpose whereas the ERG thinks it is established for another. This can lead to disconnection and members actually feeling less included.

  • Often ERGs don’t have a clear purpose and therefore no clear plan to achieve goals. The ERG can end up running a lot of different initiatives and events but not really contributing towards the achievement of its goals.

  • ERGs try to do too much. Establishing and joining an ERG can be exciting and full of promise and possibility. So it’s easy, therefore, for the ERG to end up making a huge list of things that it wants to improve. However, this can lead to feelings of overwhelm and underachievement among members.

  • A lack of budget and support from leaders is also a common challenge among ERGs and can make achieving goals and really change very difficult. ERGs need a budget to be able to run workshops, bring in speakers and host events. Often we find that organisations don’t formally recognise the amount of time some employees dedicate to the ERG and therefore do not compensate them accordingly.

  • Occasionally, an organisation can end up having too many ERGs and employees often wonder where they belong. In a Forbes article, Elaine Montilla says, “I remember at times asking myself which ERG I should go to: the one for women in leadership, the one for LGBTQ employees, the Latino group or the women in tech group?”

  • Usually, ERG Leaders and members are not given any additional time, on top of their day jobs, to run the ERG. As a result, ERG leaders and members are burnt out due to working late at night or feeling more frustrated with the lack of time than fulfilled by the ERG work.

To help you avoid these common pitfalls and to help you operationalize your ERG, we’ve created a list of best practices for ERGs.

  • First and foremost, an ERG needs CEO buy-in and DEI buy-in. It is critical to ensure that the priorities of the ERG align with those of DEI and leadership. The activities of your ERG need to support the business strategy. Leadership, DEI leaders and the ERG should all be clear on what their main purpose is which requires clear and concise communication. Expert consulting companies can help you build a strategy to get leadership buy-in and commitment.

  • Make sure that your ERG has a clear structure and guidelines for operation. Who is leading, what is the reporting structure, what are the ERGs main goals, what channels are you using for communication, how often do you meet, etc? Answering these questions from the outset means that ERG members know what to expect and how they can participate effectively.

  • Communication - effective ERGs need to have a clear communication plan for all and all members should be encouraged to contribute. Make use of the organisation's communication channels to share information.

  • Formal recognition - ideally those who lead and run an ERG should be recognised and rewarded. This should be formalised as part of their role and compensated accordingly.

  • Track your progress - in order to demonstrate the success of your ERG and its contribution towards objectives such as employee retention and talent attraction, it is important to track your progress and achievements. ERGs could gather data on number of members, number of events held, allies joined, participation in activities, etc.

  • Partner with an expert organisation on operationalising your ERG. The most successful organisations partner with a consulting firm, like Inspired Human, to help them elevate their ERGs and make them more efficient in their goals related to employee retention.

ERGs can be hugely beneficial for both employees and organisations and can contribute significantly to DEI in the workplace - particularly belonging and inclusion. So it is important to avoid the common pitfalls many ERGs make and establish best practices from the outset. At Inspired Human, we have a track record of partnering with companies to improve their talent attraction by operationalizing and standardising their employee resource groups. Get in touch with us to discuss how we can help you elevate your employee resource groups!


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