An Employer's Guide to Employee Resource Groups

The first employee resource group, or ERG, was organized by black workers at Xerox in the 1960s to share concerns about racial tension in the workplace. ERGs are more relevant today than ever as events in our country continue to put a spotlight on issues of diversity, equity, and inclusion. Today ERGs are in 90% of all Fortune 500 companies, according to a Bentley University study, and an average of 8.5% of all employees at U.S.-based companies belong to an ERG. 

As companies strive to effectively integrate values of diversity, equity, and inclusion into their culture and practices, successful employee resource groups are helping by supporting both individual workplace satisfaction and corporate excellence. But if ERGs are supporting initiatives that are important to businesses and their success, how should those businesses be supporting ERGs? That is an important question within today’s workplace diversity conversation.

What Is an Employee Resource Group?

Employee resource groups are voluntary, employee-led groups that bring individuals together with common characteristics, interests, or life experiences. They provide a safe space for employees to share concerns and ideas about their experiences in the workplace and offer career support, education, and advocacy. 

ERGs may also invite allies to join, in order to spread opportunities for understanding and support. 

Employee Resource Group Examples

Common resource groups that address the needs of a diverse workplace include networks for:

• Women

• People of color

• LGBTQIA+ employees

• Religious groups

• People with disabilities

• Neuroatypical individuals

• Working parents

• Veterans

• Young professionals

Why Are Employee Resource Groups Important?

ERGs have multiple roles. 

1. They help create a culture of inclusion by providing an opportunity for underrepresented or interest groups to be recognized and heard. When employees have a place where they can feel comfortable sharing their experiences and ideas, this boosts job satisfaction, personal development, and innovation. 

2. They may help educate the workforce at large about the customs, issues, and challenges unique to that group and on how other employees can be respectful and effectively supportive to members of that group.

3. ERGs also offer ideas for process and policy improvement to their companies. They provide leadership with a ground-level view of potential problems and the creative solutions of a dedicated internal group. 

Potential Impact Areas

ERGs can have an impact in:

• Improving working conditions for underrepresented workers

• Creating a physical work environment accessible and welcoming to all 

• Recruiting and retaining members of underrepresented groups

• Building camaraderie and community across physical offices, departments, and organizational levels

• Lowering suppressed frustration in the workforce

• Identifying and developing young talent for future leadership opportunities

• Guiding appropriate product and marketing development for diverse markets

How to Support Successful Employee Resource Groups

A successful employee resource group can provide invaluable assistance to a company in transforming company culture and seeing DEI initiatives through. What can you do to ensure their success? The two most important things are to demonstrate that their activities and goals are important to the company year round, not just on special holidays or at special events, and ensure they have the financial resources to achieve their goals.

Leader Recognition and Rewards 

The leaders of your ERGs are taking on leadership roles and additional work, over and above their regular jobs. They are applying energy, imagination, and time to solving problems for your company. This has value, doesn’t it? Yet few ERG leaders receive any compensation for their extra efforts. In the past year, this has begun to change as companies like Twitter, Justworks, and LinkedIn have begun rewarding their ERG leaders with cash compensation, stock options, etc. in addition to including their ERG work in formal performance reviews.

Recognition and rewards are not only fair for these individuals, but also signal to the entire company, plus shareholders, customers, competitors, etc. that your organization recognizes — and is willing to do so in a tangible way — that these efforts are not just valuable, but directly impact an organization's mission and financial goals. 

Budgets 

If you’re looking to your employee resource groups to play a role in the challenging work of change management, they shouldn’t be expected to do so without the proper financial support. This support is key for the success of an ERG, just as it is for any other function or department within your organization. However, ERG leaders often find themselves scraping together budgets by turning to sponsors or raising small amounts of money for each separate project. An effective solution is to allocate ERG budgets from a centralized company resource. Money could come from the Diversity department, from the budget of an executive sponsor, or from a fund contributed to by HR, communications, marketing, and/or general corporate funds. 

If a budget is established and funds are allocated, be sure to establish metrics and KPIs that measure the performance of your ERGs. This would be similar to performance indicators your organization uses for any other budget-funded line item.

However, if your organization can’t fully fund your ERGs, you can support their fund-raising efforts. You can help spread the word about ERG initiatives, public workshops, and fund-raising events to your workforce and community. You can also offer space and in-house assistance with t-shirt design, banner printing, or other support for events. 

Kanarys is Your DEI Champion

At Kanarys, we are the diversity, equity, and inclusion people with the data-driven approach. Since 2018, Kanarys has aimed to change the world by creating equitable workplaces where everyone belongs. We guide your organization’s DEI path every step of the way with courage and collaboration. It starts with data, analytics and insights, and continues with recommendations and implementation. 

Our mission, as your partner and champion in the ever-evolving DEI journey: Help you understand what it takes to foster lasting, systemic change today and for tomorrow. Because when you succeed with DEI, your employees can thrive—and so can your organization.