A Look into Employee Resource Groups

If implemented the right way, ERGs can empower employees and create sustainable change for organizations.

Diversity, equity, and inclusion have been a part of company culture for decades, but after the social reckoning of 2020, DE&I efforts are finally taking a front seat for many companies as they begin to work towards an inclusive work environment for all employees. One way that companies are doing this is with employee resource groups (ERGs). ERGs, also known as affinity groups and business resource groups, are voluntary, employee-led groups formed around employees and allies with shared characteristics, life experiences, and common bonds. ERGs can be formed from employees who share the same ethnicity, gender identity, sexual orientation, religious affiliation, disability, social/economic background, nationality, and more. ERGs help foster community and inclusivity, and provide professional and personal support to its members. ERGs are a way for companies to provide inclusivity and grow a healthy work environment. They work to empower employees, help them meet key leaders, and develop professional opportunities.

For companies, ERGs are beneficial because they help leaders learn how to better support their employees and help spread awareness of workplace issues affecting specific groups. They also help attract a diverse workforce, which improves company innovation. About 90% of Fortune 500 companies have ERGs, and ERGs are a great way to retain employees. For example, AT&T’s Black ERG, The NETwork, has more than 11,000 members and as a result of AT&T’s ERG efforts, the company has seen an 86% retention rate for its black employees. Sodexo, a global French food services and facilities management company, has nine ERGs in place for its salaried employees, and has seen these ERGs help with employee retention. The cost of replacing a single employee can range from one-half to two times the employee’s annual salary, but employees who benefit from ERGs generally don’t leave, meaning companies have less turnover and less of a hit on their bottom line. “When you have a revolving door of employees, that impacts the bottom line,” says Gloria Puentes, Sodexo’s director of DE&I External Strategic Partnerships. “But putting money towards employee engagement and professional development where employees feel they’re receiving opportunities for growth, feel their voices are being heard, and are being treated with fairness and respect is worth the investment.”

ERGs don’t come without their share of challenges though. Since ERGs are usually volunteer based, there’s often little budget, making it difficult to coordinate ERG events and employee functions. These volunteers are also not usually compensated or recognized for their work with ERGs, meaning they might miss other career opportunities as they try to navigate a full-time role while managing an ERG. ERGs can also create the false perception that a company’s DE&I issues are solved, as leaders sometimes think that the only assistance their underrepresented employees need are the ERGs, which is false. Companies still need to monitor their DE&I efforts within and beyond ERG groups, and continue to have conversations about DE&I and how to move towards a more inclusive culture.

There are things that companies and leaders can do though to implement ERGs successfully. First and foremost, company leaders have to be supportive of ERGs so that members and allies of ERGs don’t begin to feel alienated and divided from the rest of the company. Top management and leaders need to be open to listen and learn from ERGs, which will further demonstrate that they’re game for creating positive change and inclusivity.

Nikki Symmons, PMI’s Head of Events and Programs for the company’s LGBTQ ERG STRIPES Global, says that companies should ensure that senior leadership buys in. “By doing this, the very core of the business will be inclusive of all. Not only do you need senior leadership, but you also need to work bottom up; when this approach is taken, the mid-point will be the sweet spot, where every single employee feels part of the movement toward a more inclusive company and culture,” she says. Symmons also writes that leaders should lead from the front. “When setting up an ERG, align your ERGs with executive leadership sponsors to enhance your DE&I in the workplace. Sponsorship from an executive team shows that the organization stands with the ERGs and offers their support.” She also notes that LGBTQ initiatives should be a part of the everyday work environment, rather than just during Pride Month. Aysha Alawadhi, a global culture and organization effectiveness specialist who recently spoke at BlogHer and Inclusive Future’s event on DE&I and mental wellbeing, echoes this statement. “If an organization is not creating a platform for these people who have collectively faced the same kind of discrimination … then quite frankly they’re just further insulting these people by saying ‘how about all of you get together in this room and quietly play in the corner.’ If you’re not giving some kind of voting power or transformative ability where they’re part of transformation or a team that’s making changes to the existing structure that’s been oppressing them, then you’re not solving anything.” Sodexo’s Puentes agrees, “If you’re going to do it, do it to enrich your employees, the company, and improve where there are gaps. Not just to check off a DE&I box.”