The Power of Employee Resource Groups and How to Create Them

Updated Dec 21, 20225 min
The Power of Employee Resource Groups and How to Create Them

The Power of Employee Resource Groups and How to Create Them

Updated Dec 21, 20225 min
The Power of Employee Resource Groups and How to Create Them

Progressive companies are talking a lot about Employee Resource Groups, or ERGs. These groups are composed of employees who share a common interest or background and who want to advocate for common goals. The groups are being supported more and more by organizations because they reflect an inclusive organizational culture, which is beneficial in many ways.

Read on to find out what an ERG is, why ERGs and inclusive leadership are causing so much buzz, why an ERG might fail, and how they can be successfully formed.

What Is an ERG?

An ERG is an employee-led group composed of people with a common interest or background, such as their gender, ethnicity, or race. The groups are supported by the employer and the executive sponsor. The goal of an ERG is to provide support and opportunities to its members.

ERGs are initiatives to promote an inclusive organization and are also called business resource groups, affinity groups, network groups, or inclusion resource groups.

Why Are the Advantages of an ERG for Employers?

ERG leaders help their organization understand the changing demographics within their own workforce and among consumers. According to the United States Census Bureau, the nation will be “minority white” by 2045. That year, whites are expected to represent 49.7 percent of the population, and other demographics will make up the remainder. Hispanics will represent 24.6 percent, blacks will represent 13.1 percent, Asians 7.9 percent, and multiracial populations 3.8 percent.

These demographics are changing consumer markets and forcing companies to adapt. According to the Society for Human Resources Management (SHRM), ERGs help them do this in various ways.

  • ERGs help companies better understand their customers.

  • ERGs help companies understand and serve employees so that there is better morale among workers and less of a revolving door.

  • ERGS help organizations do business with diverse suppliers, stimulate partnerships, and attract a wider pool of potential recruits.

  • ERGs provide feedback on an organization’s performance from the perspective of different demographics helping shape business strategy.

Why Are the Advantages of an ERG for Employees?

For employees, ERGs offer support during onboarding, help them assimilate to a new organizational culture, and improve employee engagement. A positive onboarding experience ensures that new hires are productive sooner and likely to stay longer.

ERG programs can support young professional development, provide mentoring, guide leadership development efforts, and align diversity efforts with company strategy benefiting everyone involved. It’s easy to see why companies that don’t leverage ERGs can lose a competitive edge.

Why ERGs Sometimes Don’t Work

ERGs aren’t always successful. Empowering one group can cause another to feel disempowered. According to SRHM, there have been instances where, for example, white men complained of exclusionary practices when ERGs for women and minorities were created.

ERGs can be more successful if they are supported by executive leadership and their mandates and goals are specific. This can encourage greater buy-in by everyone, particularly minorities, who may unfortunately already feel targeted and hesitant to join a group that will attract greater attention to their cause.

Also, just creating ERGs does not magically create an inclusive workplace. Concrete policies and actions need to be followed through on if people are to continue to contribute to diversity and fairness initiatives. This lack of follow-through and measurable results often marks the downfall of ERGs.

Related: “Inclusive Leadership: What Is It and How Do You Cultivate It?”

How to Create ERGs

As alluded to in the previous section, ERGs need the full support of senior leaders. So, one way to ensure that support is to include an executive in each group. Also, the operative word for successful ERGs is “inclusiveness,” so no one should be excluded from a group in the work environment. 

Let’s say a group is created for women to represent fair pay, any individual, regardless of gender or sexual orientation, should be welcome because they can act in a supportive capacity.

Some examples of initiatives an ERG might engage in are:

  • Analyzing feedback to identify workplace improvements.

  • Organizing initiatives to engage with the external community.

  • Identifying training and development opportunities for employees

Here are a few suggested steps to create an ERG.

1. Gauge the Level of Interest

For an ERG to be successful, there has to be a core group with a passion for the initiative. An employee survey might help determine which ERGs have the necessary support to sustain themselves.

Groups that a company might start with are a group for young professionals, women, people of color, an LGBTQ network, a group for working parents, a veteran’s group, a group for people with disabilities, and a mental health support group.

2.  Get Leadership Buy-in

A strong presentation with arguments backed up by data can secure executive buy-in. Data and a cost-benefit analysis should support the reasons why the organization will benefit from the group's work. 

The responses from an employee survey could show the leadership team that there is great support for a group among the worker body. Other topics to present and discuss are the new group's goals, budget, and required resources.

3. Create a Mission Statement

Like any company, a new ERG group should create a mission statement so that employees understand the group and decide whether they want to be included. A plan with goals and initiatives should be written and made available to all employees.

4. Find Members

To recruit members, market the group within the organization, its intranet, and social media like LinkedIn. Raise awareness of issues and provide a safe space for their disucssion. Lay out the plan to address issues. Host an initial event to introduce members and set the tone giving a sense of belonging to potential members.

5. Identify the Leaders

All groups need leaders to keep business objectives on track. You may also need to find bodies to fill other roles like secretary or treasurer. Set policies for voting people into leadership roles and other positions. Also, set policies for how to call meetings, how the group will communicate, and other administrative matters. Set benchmarks so that progress can be tracked.

Real Business Case Examples of ERGs

The marketing agency BluLeadz gives five examples of ERGs supported by leading companies.

1. Ernst & Young Professional Networks

2. Community NETwork at AT&T

3. The Young Professionals at TIAA

4. Women at Microsoft (W@M)

5. Military Support & Assistance Group (MSAG) at Bank of America

In Summary

A staff survey that collects employee feedback is a good place to start when considering the formation of ERGs and inclusive company culture. 

To some extent, an ERG may form organically, but achieving ERG goals requires executive support, leadership, and organization to be effective. Moreover, without results in the form of metrics, interest, support, and motivation for an ERG are likely to wane.

Because ERGS are so tightly linked to employee well-being, which influences everything from productivity and innovation to recruitment and retention, it is in an organization’s best interests to promote ERG leadership, ERG success, and an inclusive culture. Perhaps that’s why, according to Top MBA, ERGs are found in 90% of Fortune 500 companies.

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