Wondering how ERGs can bring new life to your company culture? Here’s everything you need to know, according to Fabian Sandoval.

Employee resource groups (ERGs) have become increasingly popular with organizations looking to cultivate inclusive and healthy working environments for every employee, especially those that belong to groups that have been traditionally underrepresented in corporate environments. 

Although the concept of an ERG seems to be a newer phenomenon, that statement couldn’t be further from the truth. The first ERG groups came out of the 1960s, most famously when black workers at Xerox organized to discuss racial issues in their environment. So, ERGs are not new—they just have become increasingly relevant today as race, gender, personal identity, and politics have come to the forefront in every aspect of life.

As ERGs become increasingly popular in the corporate world, it is critical to understand why they are important and what kinds of benefits they can bring to an organization. 

Let’s take a deep dive into the importance of implementing ERGs within an organization, the advantages of having these types of groups, and the various ways in which leadership should work to support ERGs to ensure their success. 

What are employee resource groups?

Employee resource groups, or ERGs, are groups that come together based on a common interest or shared background to exchange ideas on how the company they work for can better foster diversity, equity, inclusion, and belonging (DEIB) efforts in the workplace. Some examples of the goals of an ERG may be developing ways to cultivate inclusion, improving diversity, and promoting external initiatives that drive social impact within local communities through volunteering, supporting local charities, and taking part in community outreach programs. 

ERGs also include groups that are formed around race, ethnicity, gender, disability, sexual orientation, parental status, national origin, faith, generation or age. 

Why are employee resource groups important, and what are their benefits?

Employee resource groups are important not only to the people who comprise the groups but to an organization as a whole. ERGs can build high-trust relationships that help companies flourish. Through fostering a sense of belonging, inspiring conversation, and introducing new ways to look at issues and drive innovation, ERGs consistently demonstrate their value to the companies that decide to create them. 

True innovation within an organization can only occur when employees feel safe bringing their true personalities to work on a daily basis. With that in mind, here are some of the main benefits of creating employee resource groups within an organization.

Improves work conditions

One of the primary goals of an ERG is to improve the work-life for underrepresented people in the workplace. This goal often can lead to revamped and improved working conditions. For example, an ERG that advocates for people with physical disabilities can work with leadership to ensure that the workplace is well-equipped with accessibility features. This can help ensure that events like company picnics and team-building activities are created in a way that allows all employees to be fully engaged. 

Creates a welcoming workplace

When companies utilize ERGs to encourage acceptance, employees will feel safer interacting with their peers, be more engaged in the workplace, and feel more inclined to contribute to the overall success of the company. In turn, when employees feel included, they’re also more likely to establish better relationships and human connections in the workplace, further enhancing company culture. 

Enhances experiences for everyone

ERGs can help ensure that underrepresented groups have access to the same opportunities and resources that their peers have. Having access to equal opportunities and resources can create a more positive employee experience for everyone, regardless of age, gender, faith or any other category. 

Encourages honesty

ERGs can help surface issues that some employees may feel might be too risky for an individual to mention alone. By bringing issues up in an ERG, a person can feel more comfortable sharing their insight and experiences while building consensus before bringing forth the issues to leadership. This can help address problems more quickly while alleviating toxic environments. 

Promotes diversity and cultural awareness

If a company focuses on diversity, the influx of new talent can help improve the brainstorming process and innovation by allowing teams to approach issues and create solutions and products from diverse viewpoints. 

Identifies and develops leaders within an organization

By creating safe spaces for underrepresented people to share their ideas and demonstrate their drive and initiative, a company can identify employees with leadership potential that they may not have been able to identify without the ERG being in place. This can increase leadership opportunities for underrepresented groups while improving diversity across all levels of the organization.

Increases brand awareness in the community through external impact initiatives

ERGs can be effective tools for increasing brand awareness in local communities by being actively involved in volunteering opportunities and working with local charities. For example, if an ERG participates in a volunteering opportunity while wearing company gear, it can increase the visibility of the company, while at the same time, truly giving back to the community and making a positive impact. 

Helps employees create bonds around non-work-related issues

One of the best parts of an ERG is that not every topic discussed or initiative that is created needs to be work-related. There may be external issues that are important to particular groups that ERGs can address through external impact initiatives, community outreach programs, or group education. 

For example, when it comes to Black Americans and saving for retirement, according to the Federal Reserve, only 44% of Black Americans have retirement savings accounts. When you also realize 65% of their white counterparts enjoy the same benefits, the discrepancy becomes even more staggering. 

To tackle this wealth gap as it pertains to retirement savings, an ERG composed of Black Americans could create a group education program for its members to encourage investing in the company 401k program and/or identify the best Roth IRAs to contribute to. 

A well-developed internal educational program could then be used to help educate others within the local community about their own options for saving for retirement using a community education initiative. 

ERGs should be used to tackle both work-related and non-work-related topics that affect the people participating in the groups. 

How can business leaders support ERGs within an organization?

Effective ERGs are both top-down and bottom-up, which not only have buy-in from the employees whom the group is meant to serve but also have support from leadership and the executive management team. For an ERG to be successful, leadership needs to support, fund, and endorse it. 

This includes ensuring that all employees and ERGs have access to proper communication channels through employee engagement platforms as well as properly recognizing the contributions of each group to the company culture when appropriate. Effective recognition can lead to increased engagement as well as contribute to the overall success of the ERGs and the organization as a whole. 

Here are some ways that business leaders can help support ERGs within an organization.

Invest resources into ERGs

Investing resources and giving ERGs a budget demonstrates that a company truly values them. If funds are tight, leaders need to be transparent about limitations and allocate funds correctly. Additionally, investment does not always have to be financial; business leaders can contribute company resources like materials about data theft protection, threat mitigation protocols, and even hypothetical scenarios. If your employees know what to do on their own in such cases, it could be a worthwhile investment for the company as well.  

Empower employees to join an ERG

Some employees from underrepresented backgrounds may be apprehensive to join an ERG in case it marginalizes them even further. That is why management should actively encourage employees to join ERGs, framing them as a way to improve careers and build relationships all while enhancing company culture through DEIB initiatives. 

Track ERG initiatives and measure progress

It is important to track and measure the progress that ERG initiatives are making to understand their impact. ERGs will want to create regular objectives and key results to track progress against their goals. Also, leadership should properly recognize the contributions of each group when appropriate.

Involve executive sponsors

One way that companies can make sure ERGs get the support they need is to involve leaders from executive management to act as sponsors. The executive sponsors can advocate on behalf of the group and link the ERG’s strategy to business goals. 

Types of organizations that could benefit from ERGs

Although ERGs are much more common in large enterprise companies, they can also benefit smaller organizations and companies with a work-from-home culture by providing better opportunities for employee recognition. 

Likewise, with the proper use of communication tools like employee engagement platforms, even work-from-home organizations can benefit from having ERGs. 

The truth is that all companies could benefit from having some type of ERG implementation. This even includes people relying on gig jobs, such as driving for Uber, Doordashing, or being a freelance contributor to an online magazine. Although these employees aren’t on a fixed salary and have flexible working hours, they still need to remain engaged and feel like their voices are being heard. 

By providing a safe space for workers from diverse backgrounds to collaborate on ways to enhance company culture by improving diversity, equity, inclusion, and belonging, everyone can benefit.