Whereas the impact of Employee Resource Groups (ERGs) can be far-reaching and have a ripple effect when it comes to inclusion and business impact, they are often still perceived as exclusive circles within an organization.
Part of this is a perception issue (which can become self-fulfilling) and part of this is the reality of untapped potential in most organizations to leverage ERGs as stronger agents of inclusive culture and business success.
How Have ERGs Changed?
ERGs are generally defined as "groups of employees who join together in their workplace based on identification with others similar to themselves and/or shared characteristics of life experiences.”
Having first gained momentum in the 1970’s, ERGs became mainstream as often grassroots, demographic-based voluntary groups in the 1980s. In the 1990s, these ‘affinity groups’ began to be initiated by administrators and focused more on recruitment, retention, development and networking. In the 2000s, they began to gain executive membership and sponsorship. In the 2010s, ERGs evolved into Business Resource Groups (BRGs), aligning closer with the business strategy, serving customers/clients from that demographic, and seeking to advance top performing members towards leadership - while also fostering awareness and inclusion, generally. ERGs have now expanded to include groups based upon non-demographic factors, such as introvert ERGs.
Originally, ERGs were created to provide a stronger sense of belonging for the members of the group (who often remained on the sidelines of workplace in-groups), creating networking connections and supporting career development. Over time, they have also come to support key strategic talent and business objectives in many cases, creating organizational benefits.
Current Benefits of ERGs
ERGs and affinity-based resource groups rose from a lack of belonging and access to opportunities among certain underrepresented groups. As a result, the networking connections that they offer increases individual engagement: nearly 78% of 18-24 year olds and 84% of 25-34 year olds reported that ERGs positively impact their engagement. Catalyst has found that ERG participation is linked to higher employee loyalty and satisfaction. ERGs allow employees not only the chance to feel seen and welcomed as part of a group, but celebrated for their unique identities.
ERGs are critical to recruitment: all of the Diversity Inc Top 50 companies use ERGs to recruit new members today, whereas five years ago, only 75% did. ERG members are involved in networking events, attend job fairs and connect with their alma maters.
When ERGs offer mentorship, sponsorship and “safe” spaces to discuss cultural gaps, they also improve retention.. When it comes to talent development and a diverse pipeline, ERGs provide the opportunity for high potential leaders from their membership to step up and shine.
ERGs provide underrepresented groups with a platform for speaking out that feels safe. Leaders from the dominant group can also participate in ERG discussions by intentionally making space to take in and listen to these diverse voices and perspectives. As such, ERGs are rich hubs for accessing both diversity of thought and gaining multicultural awareness.
While focused in their membership, most ERGs are also open to others, so they provide the opportunity for allyship for those who seek to go outside of their comfort zone and engage. When ERGs go to task on business initiatives, they provide valuable consumer insights for groups with massive buying power and cross-functional teamwork that can drive innovation.
Criticism and Challenges of ERGs
Some of the critiques of ERGs include:
- They can create a false perception of addressing diversity without real organizational commitment to inclusion.
- They are often run by volunteers and poorly supported, so they put the burden of inclusion on the individuals from underrepresented groups.
- They have too little buy-in or involvement with senior leadership, perhaps because they are too far removed from organizational goals.
- They hinder inclusion and change from happening because they occur in siloed settings that don’t engage voices of power and influence.
- They “pigeonhole” people to a singular aspect of their identity, which is also less relevant for intersectional identities and for some identity groups that are more fluidThey exclude those who might want to be involved in inclusion but don’t fit the group descriptor (eg white men who don’t know if they’re invited).
- They are perceived as creating special opportunities for only members of the group while disadvantaging other groups.
However, many of these criticisms have been challenged as myths and lack awareness of the systemic inequities ERGs address. For example, Catalyst points out that ERGs were created because underrepresented groups were not benefiting from the organic systems that supported dominant groups who were invited into the tight-knit networks that give majority members access to sponsors, informal networks, and insider knowledge. ERGs were designed to distribute more opportunities to deserving employees who, whether intentional or not, received fewer due to their demographic identity
Also, having groups exist to connect individuals, and amplify their voices, is a way to give those underrepresented voices enough weight to register effectively in the broader organizational discussion. ERGs have supported cultural change and policy creation - most successfully when they are well managed, visibly supported by key leaders and (at least for certain events) open to all.
Amidst the Great Resignation, and with real impact on engagement and retention, ERGs are increasingly relevant to business objectives. With nearly half of companies now referring to them as BRGs, they increasingly focus on client, product and service-related initiatives.
And yet, there’s still an opportunity to value them more, and hence evolve the impact they have on inclusion culture and the business.
Evolving ERGs to Build an Inclusive Workplace
For ERGs to be more effective in driving an inclusive workplace they need to be visibly valued by the entire organization, to have active leadership engagement, to be more deeply and visibly aligned with business objectives, and to garner the participation and allyship of majority group members, so they have wider-reaching and interconnected impact. ERGs must be able to extend their impact outside of themselves to create the impact they were envisioned for.
In 2021, LinkedIn, like Twitter before them, began compensating their Global ERG Co-Chairs. The 20 Global Co-Chairs, who go through a rigorous selection process, receive $10,000 annually, for formally taking on additional responsibilities. LinkedIn has more than 10 groups, comprising 6,000 ERG members worldwide and 500 ERG leaders at the local level. Global ERG Co-Chairs regularly meet with executive level champions who offer strategic planning advice, ongoing feedback and even personal leadership coaching to the co-chairs.
“We are at a point in our company history where our ERGs have reached a level of operational excellence, cultural transformation and powerful retention impact," said Meredith Morales, SHRM-CP, LinkedIn's senior diversity, inclusion and belonging program manager. "We knew it was time to design our systems of recognition and appreciation to more fully demonstrate the value we see in the contributions of our ERG leaders.”
It’s important to establish ERG leadership roles as highly valuable positions with leadership growth trajectories. ERGs need to have dedicated and animated executive sponsors more than one in large organizations) who are actively engaged with the group, including some who are not of the same affinity, so to infuse leadership with more diverse perspectives and encourage senior leaders of all identities to feel welcome as allies and to share in ownership for creating an inclusive culture. (In the White Men’s Leadership Study, 70% of white male respondents were uncertain if diversity initiatives are intended to include them). With involved executive sponsors, well-managed ERGs can serve as a path to identify and develop future leaders.
It’s increasingly important to think of ERGs as strategic business groups who can fundamentally move the organization forward in far more than one way. The most successful ERGs have clear charters for the change they wish to create; are supported by corporate policy and budgets so as to not burden ERG leaders who also have full time day jobs; operate across job functions and geographies; are aligned with business objectives such as recruiting, career development, and product launches or marketing strategies; provide opportunities for everyone - as members or allies - to get involved and build community; and have clear supports in diverse functions from outside of the ERG.
If an ERG is to be measured for its impact, let it be against the charter of impacts they seek to create. But first ask, how is the organization valuing, supporting and engaging with that charter? Is it treating ERGs as islands that exist onto themselves - because if so, that’s probably what you’re getting.
Evolving the impact of ERGs begins with valuing them and integrating them actively with both leadership and core organizational visions.