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Employee Resource Groups: Importance and Best Practices

Are there employee resource groups in your organization? If not, why not? We’ve got the info to make sure you establish yours correctly. Read on.
Written by: Penny Swift
employee resource groups
Published: January 18, 2024

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Understanding employee resource groups (ERGs) is crucial in the modern business world largely because of their significant impact on diversity, inclusion, and employee engagement. But ERGs also help foster a strong sense of belonging and enhance overall workplace culture by providing a forum for cross-cultural dialogue and understanding.

Achievers Workforce Institute’s 2023 Employee Engagement and Retention Report, The future is flexible, stresses that business leaders must find ways to improve a sense of inclusion in the workplace. It also acknowledges that 84% of HR leaders say diversity, equity, inclusion, and belonging are a “high priority” for their organizations.

DEI is a priority for organizations

In its fourth edition of Diversity Matters, Diversity matters even more: The case for holistic impact, McKinsey delivers a compelling business case. Despite the far-reaching changes in the global business environment over the past few years, “companies with diverse leadership teams continue to be associated with higher financial returns.” Furthermore this is valid across regions and industries, despite varied challenges, ambitions, and stakeholder expectations. Their data shows that the financial outperformance gap has grown from 15% in 2015 to 39% in 2023. 

The relevance of ERGs is palpable. They cultivate diversity, equity, and inclusion (DEI) by establishing a supportive community for employees with shared characteristics or interests, facilitating networking, professional development, and advocacy within the organization

There’s so much more to these business resource groups, and their importance mustn’t be underestimated.  

In this comprehensive article, we’ll explore what ERGs are, how they differ from affinity groups, and how they are structured. We’ll discuss the importance of ERGs, examine some of the different types, look at their benefits, and share some real life examples. As a bonus, we provide some best practices and suggest the basics for a handy toolkit you can use to set up effective ERGs within your organization.

What are Employee Resource Groups?

Employee resource groups are voluntary, employee-led groups that focus on shared interests, experiences, or underrepresented backgrounds. These groups are established within workplaces to provide support, foster diversity, and promote inclusion. They offer a platform where group members can voice their concerns without fear, share their experiences, and contribute to company-wide initiatives. ERGs are also a great best practice example of how organizations can empower internal communications and foster a connected workplace culture. 

what are employee resource groups

The concept of ERGs was initiated in the United States in the 1960s. Inspired by the civil rights movement championed by Martin Luther King, Jr, employees at Xerox established the National Black Employees Caucus. Its aim was to address issues of racial inequality and discrimination and create an environment that would help them thrive in predominantly white workplaces.

An advocate for equality, and 100% committed to ending segregation peacefully, King was assassinated in Memphis, Tennessee on March 10, 1969. But his vision of nonviolence and its power to change systems lives on. And he is remembered annually on Martin Luther King, Jr., Day, which is now a federal holiday celebrated on the first Monday of January.  

ERGs have evolved in the spirit of the non-violent civil rights movement. But they focus on a much wider, more inclusive DEI framework that incorporates multiple aspects including ethnicity, gender, sexual orientation, and other demographic factors that might impact an employee’s work experience and career advancement.

Integration of Employee Resource Groups in Organizations

Remarkably, employee resource groups are now seen as the second most frequently used communication tactic to promote diversity, equity, and inclusion. 

In its State of the Sector 2022/23 Internal Communication and Employee Experience report, Gallagher reveals that ERGs are one of the most frequently used “tactics” for communicating DEI. But their use varies radically between small and large companies, with major enterprises employing at least 10,000 people making most use of them. Overall 48% of companies use ERGs, but this reduces to 23% for small businesses and sky-rockets to 76% for major enterprises. 

In terms of effectiveness, 73% of organizations across the board find them very or quite effective. But only 23% of organizations are using ERGs to collect employee views and feedback. 

Affinity Groups vs Employee Resource Groups

While the terms affinity groups and employee resource groups are often used interchangeably, they are distinct from each other. An affinity group is a group of employees who share similar interests or characteristics, such as hobbies or job roles. For example, a company may have an affinity group for employees who love to read, or for those in leadership roles.

While ERGs are often referred to as affinity groups, their functionality is much more focused. ERG members certainly share characteristics, and often interests, but the makeup of these groups tends to focus on employees from underrepresented backgrounds. Quite simply, they aim to foster a more diverse and inclusive work environment. 

ERGs go beyond similar interests or characteristics and often offer resources for professional development, and mentorship programs. There is no doubt that they contribute to companies’ diversity, equity, and inclusion strategies.

Employee Resource Group Structure

Most leading companies structure ERGs to drive employee engagement, inclusion, and business results. As a result, a typical employee resource group structure encompasses sponsors, leadership, a DEI liaison team, and employees who are ERG members. 

  • Executive sponsors
    Senior leaders in an organization serve as executive sponsors for ERGs. They advocate for the group, provide strategic direction, and ensure alignment with overall business objectives.
  • ERG leadership
    ERG leaders, often elected by ERG members, are responsible for executing the group’s vision and plans.
  • DEI team
    The company’s DEI team may have a dedicated representative that liaises with all ERGs ensuring their activities align with the overall DEI goals of the organization.
  • ERG members
    These are employees who join the group voluntarily because they identify with the specific underrepresented group or are allies who believe in the ERG’s cause.

Every ERG is unique and may have a different structure. Ultimately this will depend on the needs of the ERG members and support from company leaders. Despite the variations, the essence of ERGs lies in fostering an inclusive and supportive environment for everyone from sponsors and leadership to the individual ERG members.

Why are employee resource groups important?

Employee resource groups serve multiple beneficial functions within an organization. They enhance the employee experience, foster community building, promote DEI, and can contribute positively to the company’s bottom line. 

Here are some of the crucial elements that make these groups so important:

  • Employee engagement
    ERGs provide a platform for employees to connect on a personal level, share experiences, and learn from one another. This interaction boosts morale and promotes a positive workplace culture.
  • Professional development
    ERGs often provide opportunities for career advancement in the form of workshops, mentoring programs, and leadership training. ERG members get the chance to develop skills that can propel them to higher roles within the organization.
  • Enhancement of diversity and inclusion
    ERGs have a vital role in promoting diversity and inclusion within the workplace. They ensure that employees from all walks of life are respected, heard, and included in pivotal decisions.
  • Improvement of company reputation
    Companies with active ERGs are more likely to be seen as inclusive and socially responsible, which can improve their reputation among customers, partners, and prospective employees.
why are employee resource groups so important

Given these benefits and the changing demographic workforce, ERGs are not just a nice-to-have addition. They’re a must-have component for any business.

Types of Employee Resource Groups

Today’s workplaces are becoming increasingly diverse. As businesses look to celebrate diversity and encourage inclusion, a key tool they often use is employee resource groups. As we have said, ERGs are employee-led groups that focus on shared characteristics or life experiences. They provide a forum for employees from underrepresented groups to connect and find support. 

But they aren’t all the same. Rather, there are various types of ERGs tailored to the unique needs of various employee segments. This provides a powerful means of enhancing employee experience and fostering a culture of belonging within each segment.

While most leading companies in the United States use ERGs, each organization has the discretion to create ERGs focused on different aspects. These are, by nature, based on their unique workforce composition and the needs of their group members. 

Let’s delve deeper into some of the different types of employee resource groups as well as their respective roles in community building and promoting inclusion.

Veterans’ Employee Resource Groups

Veterans’ employee resource groups are usually formed to support employees who are veterans of the military. These groups provide a platform where veterans can come together and discuss their shared experiences and the unique challenges they face in the workplace.

Many times, these ERGs will offer mentorship programs to help veterans transition smoothly from military to civilian life. They also work actively with company leaders to ensure the organization offers a great place for veteran employees, contributing to their career advancement. Senior leaders often act as executive sponsors assisting veteran ERGs in accomplishing their objectives.

Black Employee Resource Groups

Black employee resource groups aim to provide support for black employees who often face systemic barriers in the workplace. These ERGs contribute to DEI strategy by focusing on career advancement opportunities and promoting a work environment where black employees feel valued and comfortable.

These resource groups can help companies understand the unique experiences and challenges black employees face. They also engage in external engagement activities such as community services, that help bridge the gap between the company and the broader black community in the United States.

Disability Employee Resource Groups

Disability employee resource groups offer a supportive environment for employees with disabilities. They provide valuable insights to the company’s DEI team. They do this by shedding light on the myriad distinctive hurdles and necessities of disabled employees in the workplace, improving access, inclusion, and opportunities for all.

These groups also partner with HR and other company departments to shape policies and accommodate the unique needs of employees with disabilities. Disability ERGs go beyond office activities and often advocate for disability rights in the wider community.

Pride Employee Resource Group

Also referred to as LGBTQ+ ERGs, pride employee resource groups are committed to offering support for employees who identify as lesbian, gay, bisexual, transgender, or questioning. LGBTQ+ ERGs are essential in championing equality and inclusivity both within the company and in a broader society.

Activities of such ERGs usually include fostering a welcoming and inclusive workplace culture, providing personal and professional development resources, and conducting outreach to LGBTQ+ communities.

Mental Health Employee Resource Group

Mental health employee resource groups provide essential support for employees facing mental health challenges. They promote well-being and facilitate a culture that respects and understands mental health.

These groups work closely with HR departments to provide employees with resources for managing stress, dealing with anxiety, and improving overall mental health. They also often host workshops and seminars to educate other employees about mental health and reduce workplace stigma around the topic.

Women’s Employee Resource Group

Women’s employee resource groups center on the advancements and concerns of women in any business. They offer mentorship programs, networking opportunities, and leadership development initiatives to promote gender equality in the workplace.

These ERGs also facilitate conversations around issues such as pay equity and parental leave. Moreover, they foster an environment where everyone feels their voices and concerns are heard and addressed.

Employee Resource Group Examples

Employee resource groups have become vital parts of many organizations, enabling companies to engage better with their workforces and foster inclusivity and diversity. They can be very specific or broad in focus, tackling various issues, and catering to a multitude of underrepresented groups. Let’s look at a few successful examples.

We have provided links so that you can explore these examples in more detail. 

Shell’s Global LGBT

Shell’s Global LGBT+ forum is the global LGBTQ+ employee resource group within the multinational oil and gas company. It aims to offer a safe, supportive, and inclusive working environment for LGBTQ+ employees. Shell focuses not only on inclusivity within the organization but also actively advocates for LGBTQ+ rights in regions where the company operates.

Blacks at Microsoft

Microsoft’s Blacks at Microsoft (BAM) is a resource group that specifically targets black employees at Microsoft. It provides support, mentorship programs, and helps in the career advancement of black employees in the company. BAM also contributes significantly to Microsoft’s community-building efforts and DEI strategy.

Veterans Network @Comcast

The Veterans Network at Comcast is an ERG that provides resources and support to veterans and their families. Through mentorship programs, external engagement, and robust community building, it ensures veterans’ seamless transition into corporate careers.

Employee Resource Groups Best Practices

With the diversity of ERGs we have discussed, we need to talk about how to run them successfully. Establishing an ERG is one thing, but maintaining and leveraging it to foster diversity, inclusivity, and employee experience is another. 

Here are some best practices to help you:

#1 Clearly define the goals and objectives

The ERG should be created with a specific, well-defined purpose in mind. The objectives of the group should be in alignment with the company’s overall mission and values.

Alveda J. Williams, Ph.D., chief inclusion officer at Dow, agrees that strategic alignment to business goals is one of the most important factors of successful employee resource groups. Her views form the structure for an article, 7 Employee Resource Group Tips Every Company Should Know, published in Great Places to Work.  

Her advice is simple. Find a north star so that your ECGs feel connected to the greater purpose of the company. 

#2 Engage Senior Leaders  

Successful ERGs need commitment and support from senior leaders. Employee resource groups run best when leadership gets involved by advocating, supporting, and occasionally participating in the activities.

#3 Ensure Diversity within the ERG 

While ERGs generally target specific underrepresented backgrounds, this should not mean automatic exclusion of others. ERGs should be driven by diversity and inclusiveness to be truly representative and effective.

#4 Utilize Executive Sponsors

Assigning an executive sponsor to each ERG is a great practice. They can advocate for the group and help to bridge communication between group members and company leaders, enhancing the ERG’s impact on the organization.

#5 Measure Success

It’s crucial to have measurable goals and to consistently verify every group’s success. Measuring success could include tracking increases in recruitment, retention, and promotion of the ERG members within the company.

According to McKinsey, “common metrics tracked by effective ERGs include overall membership, event participation, member experience and sentiment, and intersectional demographics, such as race and gender within an LGBTQ+ ERG.”

#6 Train ERG leaders

It is essential to provide ERG leaders with the necessary support and training to successfully run the group. This really isn’t rocket science, and it applies to every aspect of any organization.

#7 Promote Internal and External Engagement

ERGs are not meant to segregate employees, but rather to facilitate engagement. Encouragement for internal collaborations and engagement with the broader community will further enhance the effectiveness of an ERG.

Walking through these best practices, it becomes clear just how beneficial, yet intricate, ERGs can be. They can play a significant role in sustaining diversity, equity, and inclusion (DEI) in an organization, but only when guided by efficient practices and strategies.

best practices of employee resource groups

Employee Resource Group Toolkit

Whether you’re planning to establish an employee resource group in your organization or seeking to revamp an existing one, an ERG toolkit can be a game-changer. A toolkit needs to be a comprehensive collection of resources, materials, and strategies designed to enhance the establishment, operation, and success of ERGs. But what exactly should this toolkit entail? 

A typical employee resource group toolkit should include:

  • Guidelines on forming an ERG
  • Operational best practices
  • Strategies for engaging group members
  • Case studies from the organization or other companies
  • Success indicators
  • Resources for ongoing training and development

These toolkits should be customized to fit the specific needs of different ERG groups and individuals from underrepresented backgrounds.

What’s Next?

Overwhelmed? Confused? Unsure where to start? Cerkl Broadcast has the ideal platform to help you improve internal communications and foster employee engagement. We also suggest a DEI communication checklist that you can access right now, with no charges involved. 

FAQ

What does an employee resource group do?

An ERG fosters diversity, equity, and inclusion by providing a supportive community for employees who share common characteristics or interests. In this context, the ERG offers networking, professional development, and advocacy within the organization.

What are the 4 Cs of employee resource groups?

The 4 Cs of Employee Resource Groups are: 
Connection – building a sense of community among members
Career – supporting professional development and mentorship
Culture – promoting inclusion and understanding
Commerce – contributing to business goals through diverse perspectives.

What are the disadvantages of ERGs?

Disadvantages of ERGs may include the risk of reinforcing stereotypes as well as the potential for exclusion of certain individuals. They also introduce the challenge of balancing organizational goals with group interests, which can lead to fragmentation.

How can HR support ERGs?

HR can support ERGs by providing resources and ensuring leadership support. HR can also help to integrate ERGs into broader diversity and inclusion strategies, and facilitate communication and collaboration between the ERGs and organization’s leadership.

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