McKinsey reports that 90 percent of Fortune 500 companies have employee resource groups and most DEI (Diversity, Equity, Inclusion) strategies will tell you should be prioritizing them too. But what are employee resource groups? What do employee resource groups do? ERGs refer to internal communities within an organization where employees are able to connect with like-minded individuals and build a support network at work. Some employee resource groups can be based on shared identities while others rely on common interests, but their main aim remains to build unity within a company. If you’re wondering how to create employee resource groups within your own organization, here are some things you need to consider before you get started.
Image credit – Pexels
What Are Employee Resource Groups?
Boston College Center For Work and Family suggests that the first employee resource group was set up in 1970 at Xerox—the National Black Employee Caucus. The group was started in support of race-based unity for employees of the organization and eventually expanded to a women’s leadership group at the company as well. Since then employee resource groups have been set up for multiple communities where employees can voluntarily come together to create a shared space for themselves with the approval of their management teams.
Businesses are often afraid to allow the establishment of ERGs for the same reason that unions are often feared—they worry about the weaponization of unity against them. When a community is formed within an organization, it can become very easy for the dissatisfaction of one employee to be adopted by everyone in the group. This can lead to uncontrolled rebellions and backlash within the company, escalating issues to unmanageable levels. Despite these fears, however, these problems rarely manifest, and if companies are supportive of these initiatives, there are only benefits to be found from supporting employee resource groups.
What Do Employee Resource Groups Do?
While employee resource groups are primarily recommended for DEI initiatives, there are many things that employees do that contribute to the well-being of the organization and ensure harmony within teams and departments.
- Creates a sense of community within a company where individuals with similar lived experiences can come together and find a safe space for themselves
- Promotes inclusivity in a space where employees might have otherwise felt isolated
- Provides mentorship opportunities where individuals can see support and solutions for problems that their seniors and colleagues have already experienced
- Increases interactions between employees who might not have otherwise had a chance to interact with each other
- Facilitates creativity and idea sharing that employees might be hesitant to bring up within their teams
- Creates a space for collective feedback generation that individuals might not realize on their own
- Allows the company to have a centralized point of contact when introducing new policies and looking for insights on their initiatives
- ERGs organize and participate in cultural celebrations, observances, and awareness campaigns
- Provides networking opportunities and allows for resource sharing within a company
- Simplifies the process of onboarding and provides a wider platform for employees to ask questions and have their doubts, bringing clarity to every aspect of work
- Brings a more positive tone to the workplace culture and helps it evolve more naturally
- Promotes intersectionality awareness as different aspects of an individual’s identity overlap within a single employee resource group
- Simplifies the process of generating community outreach ideas, team-building initiatives, and overall goal-setting for the company
Pros and Cons of Employee Resource Groups
Just like any other component of running a business, there are both pros and cons of employee resource groups. Not all organizations might be equipped to support an ERG right from the inception of the organization. Some might have sufficient support to handle a few but not enough employees or resources to take care of multiple resource groups at once. It is important to consider the company’s capacity before fully committing and supporting employee resource groups.
Pros of Employee Resource Groups
Considering the many points we just covered on what employee resources groups do, there is no denying that there are many pros of ERGs. They build a sense of community, facilitate the exchange of ideas, and allow employees to find a place for themselves within the organization. According to ZipDo, employee resources groups can assist in a 39 percent increase in job satisfaction from employees and satisfied employees are most definitely more productive—7 percent more productive to be precise. Employee resource groups also contribute to a 14 percent increase in retention rates for companies trying to hold on to their workforce and work on their turnover rates. ZipDo also reports that 35 percent of companies with ERGs increase in size.
Whichever way you look at it, employee resource groups result in an upward trend in numbers.
Cons of Employee Resource Groups
There can be downsides to employee resource groups if they are hastily put together or remain entirely unmonitored and unsupported by the employer. When ERGs are allowed to exist to serve as a bullet point in the company’s website and policy, employees remain unsatisfied and begin to push back against such underhanded practices. Companies that try to control and suppress employees through regulation of the employee resource groups are likely to cause more harm than good, pushing employees further away from them. Instead of uniting employees in support of the organization, it can instead unite them against the organization and force them to take company-wide action to fight back against their company.
There is also the possibility that overly lax regulations could lead to the creation of cliques that promote exclusivity rather than a sense of togetherness in the organization. Lack of communication from the organization’s side might lead ERGs to pursue their own goals instead of an alignment with company values so it is necessary for the company to be an active participant in the employee resource group.
Consider Compensation for ERG Leads
It is also useful to note that while participation in these groups is largely voluntary, it takes time and energy to lead ERGs and conduct events and activities that make the resource groups thrive. A majority of individuals who lead these groups are not compensated for their work and with the additional responsibility of handling their work without any accommodation and support from the company, these employee resource groups then run the risk of fizzling out, leaving a hole in the organization, leaving everyone worse off than before.
The Rise Journey’s annual survey found that only 46 percent of companies compensated their ERG leads. Now this is better than the estimated 6 percent who were seeing compensation in 2020, however, it is evident that their effort to bring the organization together goes largely unacknowledged.
How to Create Employee Resource Groups
Creating employee resource groups requires a team effort and no one individual can handle the task alone. Support from the organization is just as essential as interest from employees and both sides have to ensure that there is some planning involved in planning the employee resource group.
- Evaluate the organization’s readiness to initiate such a task and their commitment to the ERG goals
- Survey company interest in the ERG and establish what form of support employees are looking for from these employee resource groups
- Consider whether the employee resource groups will focus on a specific demographic (for example, women, LGBTQ+, ethnic groups) or shared interests (sustainability, wellness, etc.)
- Ensure there is a sufficient budget available and obtain support and commitment from key players
- Have regular discussions to establish guidelines and a structure for the group—it will require its own committee of leaders and planners
- Ensure employees in the planning are not already overburdened with tasks. Especially in the initial stages, it will require a serious investment of time
- Create a charter and mission plan for the ERG and determine what its function will be. Details like meeting time, expectations, tasks, etc might need to be laid out in advance
- Establish membership criteria, communication channels, application or joining processes
- Ensure the ERG goals match up with the organization’s goals
- Set clear criteria for how the ERG will be tracked, whether any measurable goals need to be set, when reviews will be conducted to ensure no policies are violated, etc.
- Start small—Establish one or two employee resource groups to test out how the organization is able to handle the additional dimensions and address challenges before launching new groups
Companies should openly communicate their intentions with their employees and provide regular updates to help employees see the genuine effort behind the initiative. Open communication can help employees be patient for the successful launch of ERGs and taking feedback from them will only serve to improve the process with every iteration of the ERG. With a sense of clarity on what employee resource groups do, you should be able to create successful ERGs for your own organization.