Want to build employee belonging, recruit and retain diverse talent, improve company policies, and drive organizational progress? Here's everything you need to know about how to support ERGs.
Posted March 3, 2023 by the Future Forum team
Reading time 9 min
The first thing you need to know about employee resource groups (ERGs) is that they’re not a new concept.
Employee resource groups are voluntary employee-led coalitions organized around a shared characteristic. Many ERGs represent groups that have historically faced discrimination based on race, sex, sexual orientation, or disability. Others focus on shared experiences (such as military service or remote work), life stage (including working parents and young professionals), or interests (like community service or climate advocacy).
ERGs have expanded and proliferated in the half-century since: today, they’re a fixture at 90% of Fortune 500 companies. As ERG membership has grown and diversified, so has these groups’ power to recruit and retain diverse talent, shape company policies, and drive progress toward business goals.
But what value do ERGs provide to employees and companies today, and what do business leaders need to know about how these groups are continuing to evolve?
From building belonging to helping recruit and retain diverse talent to improving product development, ERGs are becoming increasingly central to reaching end exceeding business objectives.
Benefits of ERGs
ERGs originally arose as a way for members of underrepresented groups within a company to connect, support one another, and exercise their collective power. While effective ERGs continue to focus on the needs of their members first, many have evolved to align with business objectives, becoming indispensable sources of innovative ideas and rockstar talent while pushing companies to deepen their commitments to social impact.
Career advancement: ERGs connect employees across teams, functions, and levels, creating networking opportunities that can supercharge talented employees’ growth through the company. Many ERGs also offer formal mentorship, connect employees with external career coaching, or help fund professional development like workshops and conferences.
These career-boosting opportunities pay off. A survey of ERG members from dozens of major corporations presented at the USC Marshall Center for Effective Organizations showed that ERGs had a “high impact” on members’ professional development. Data from a 2017 summit on ERGs found that 73% of ERG members benefitted from mentoring, advice, and career planning. And research from the Institute for Corporate Productivity showed a particular boost for employees who step forward to lead ERGs: these leaders were three times likelier to strategically impact business, twice as likely to get to know senior corporate leaders and build their external reputations, and 1.5x likelier to be included on interesting or challenging projects.
Belonging and inclusion: “Usually, people join ERGs because they are missing a sense of belonging at work, and they really want to feel respected, heard, and valued,” says author, corporate coach, and ERG consultant Christine Michel Carter. A survey of 1,000 employed Americans from the Center for Talent Innovation found that 40% feel physically and emotionally isolated in the workplace.
In part by creating safe spaces where employees who share common experiences can find one another, ERGs can be a crucial tool in closing these stark belonging gaps. Respondents to the USC Marshall Center survey cited “Creating a company environment that is inclusive” as the top benefit their ERGs provide, with “Making this a great place to work for me” a close second. A 2017 article in The International Journal of Human Resource Management found that “LGBT employee networks help mitigate LGBT isolation at work,” and can directly and indirectly provide LGBT employees with a “voice in the organization.”
Diversity, equity, and inclusion: By nurturing career growth and helping employees who belong to groups that have been historically underrepresented among knowledge workers find a sense of belonging at work, ERGs help recruit, retain, and promote a diverse and highly motivated workforce.
According to a case study from Catalyst, women’s ERGs at the healthcare tech provider Medtronic played a central role in an initiative that saw the share of women vice presidents increase from 25% to 30%; women directors increase from 30% to 36%; and women in R&D increase from 24% to 29% between 2015 and 2019. And Human Resource Management has found that members of Black, Hispanic, and Asian ERGs had “reduced turnover intentions,” making ERGs “useful tools for helping companies retain managerial-level minority employees… thereby assisting them in meeting their diversity goals.”
“We have over 10,000 alumni of our programs, and approximately 65% participate in ERGs,” says Tina Gilbert of Management Leadership for Tomorrow, a nonprofit focused on workplace equity and a founding partner of Future Forum. “Many people compliment their ERGs and the sense of belonging it adds to their experience. But others take issue with putting the work of diversity on the backs of those who experience the greatest pain.”
To counter this, Gilbert says leaders should seek to extend accountability for DEI-centered community and business outcomes beyond ERGs and into the broader organization. “This is hard work,” says Gilbert. “ERGs help, but they are not a silver bullet.”
Equitable product design: As ERGs have increasingly been sought to shape business strategies, they’ve become important sources of ideas and advocacy to ensure that their companies’ products don’t perpetuate longstanding biases and inequalities. For instance, the Disability Alliance at Google advocates for greater focus on inclusive design, pushing to make Google’s ubiquitous products more accessible to people with disabilities. Drew Lewis, VP of global diversity & talent at ADP, said the company’s Pride for LGBTQ+ Group pushed for adding the option for users to state their pronouns to the platform. Members of Amazon’s Black Employee Network launched the platform’s Black haircare store, Textures & Hues. And since its founding in 2020, members of Indigenous at Microsoft have curated collections of games, movies, and TV inspired by Indigenous creators, culture, and protagonists that users can access through the Microsoft store.
Social impact: ERGs don’t just benefit employees and organizations. They’re also helping steer their companies’ resources to creating a more just, equitable, and sustainable world for all. For instance, ERGS can build beneficial connections between corporations and communities. Warriors@Amazon partners with Habitat for Humanity and Toys for Tots to support veterans and their families. Microsoft’s Hispanic/Latinx ERG awards five scholarships to Hispanic/Latinx high school students with an interest in engineering, computer science, business management, or marketing. And in Harvard Business Review, Aiko Bethea wrote that when Amazon pledged $10 million for social justice and supporting Black communities in the wake of George Floyd’s murder, the company’s Black Employee Network (BEN) weighed in on fund recipients. And members of the Black@DoorDash ERG directed the company’s $500,000 donation to state and local organizations benefitting the Black community in 2020.
How to get started with ERGs
Executive sponsorship
ERG leaders can come from any level of the organization—but these groups require strong executive support to fulfil their missions and promise. “ERGs can only be successful if an executive sponsor is a member of the group, and if the executive leadership team as whole participates in and believes in the mission and vision of that ERG,” Christine Michael Carter says.
Often, the executive sponsor is a member of the group that the ERG represents, though Aiko Bethea makes the case for selecting a sponsor who identifies as an ally: “In the case of Black ERGs, I believe the sponsor should be a non-Black person so that they model active learning, cultural stewardship, and advocacy across cultures. Too often, the few Black leaders are drafted to lead the Black ERG instead of recognizing that cultural stewardship is the responsibility of all leaders.”
Budget: From hiring outside experts to funding scholarships and grants to hosting networking events, ERGs need funding to reach their goals. But research from Great Place to Work found that more than half of ERGs have annual budgets of less than $5,000. “We’re talking about Fortune 500 companies with huge budgets!” says Carter. “Five thousand dollars would be like the cost of running one ad on one website, but that’s what many of these companies are giving ERG leaders to run the entire organization for a year. It really doesn’t go that far.”
Align ERG participation with KPIs: On top of the duties listed in their job descriptions, ERG members volunteer their time and occasionally their money to meet the groups’ needs. And among the reasons employees cited for not joining an ERG? Not enough time.
ERGs are increasingly central to their companies’ success—which is just one reason that leaders should embrace and incentivize their reports’ participation. “If your company’s KPIs include some sort of people- or mission-focused pillar, ERG participation could ladder up to that and be one way that individual employees can meet those goals.” In Harvard Business Review, Bethea suggests making ERG leaders eligible for bonuses or at least compensating them for the time they devote to the group by formally dedicating a portion of their role to ERG participation.
Keep an open mind about what an ERG can be: ERGs can be a way for allies to learn about their colleagues’ experiences and advocate for policies and culture changes that benefit underrepresented groups. Fairygodboss writes, “Though it may not make sense to create an ERG for employees whose experiences have always been at the forefront of the conversation (e.g. having an ERG for white men), giving those employees the support and resources they need to best understand and be an advocate for diversity within the workplace is key.”
“We’ve had contentious moments with the broader corporate community where we felt like we weren’t being heard,” one member of a LGBTQ+ ERG told Catalyst. “That was when I really came to this aha moment about being an ally. I had folks that would listen to me because I was a straight white guy. I had a broader voice to advocate for people that they might not listen to.”
Since their start in the civil rights era, ERGs have remained steadfast sources of support and opportunity for members of groups that have historically faced discrimination in the workplace. What’s more, they’ve proliferated from groups based mainly on shared identities to those that embrace common interests, choices, or lifestyles. “People don’t want to be identified as just one thing anymore,” Carter says to explain the expansion of what an ERG can be. “I’m not just a Black person. I’m a Black millennial working mom of two kids and I live in a city. There are so many ways you can slice and dice me as a person.”
