Employee resource groups (ERGs) have gained rapid traction in recent years—and business leaders are doing more than taking notice. Global role models publicize their employee networks to show prospective employees and the world their commitment to building a more inclusive work environment.
Businesses of all sizes can leverage ERGs to their benefit, but the advantages are particularly acute for organizations with a high headcount. However, before companies can create these groups, they need to understand what they are and what they offer.
What exactly are employee resource groups?
You might know them as affinity networks, employee networks, or business impact groups. Regardless of the name, they’re all ERGs, and their purpose, as defined by the Society for HR Management, is to bring employees together "based on common interests, backgrounds, or demographic factors such as gender, race, or ethnicity."
These groups are typically founded and run by individual teams and employees, with an executive sponsor to indicate management buy-in. They’re designed to connect employees of similar affinity to each other, based on anything from their job functions to their racial identity. The goal is to create a sense of belonging that stretches far beyond basic corporate identity.
ERGs transcend organizational charts and hierarchies by focusing on common ground, based on core beliefs and backgrounds. The community and power of these groups tends to grow with business size. Comcast, for example, has six affinity networks with 30,000 members—an average of 5,000 members for each ERG.
What are the main benefits of ERGs?
Given the purpose of affinity networks, some of the benefits are a given; others are more subtle, but just as impactful.
These are the four most significant benefits of creating and nurturing employee resource groups:
1. Networks of Community and Understanding for Employees
The most overt benefit of ERGs is the feeling of community they engender. Especially among companies with thousands of employees, it can be difficult to find others with the same beliefs and backgrounds. Resource groups help employees from all departments come together and find like-minded professionals focused on the same priorities and passions.
We all want to belong. Research shows inclusive organizations are twice as likely to meet financial targets, six times more likely to be innovative, and eight times more likely to achieve better business outcomes. Providing employees the opportunity to connect at work on a more intimate, meaningful level can help accomplish similar results.
2. Unique Insights on Customers and Business Performance
ERGs consist of powerful voices that allow organizations who listen to align their priorities in terms of performance and customer insights. Diversity and Inclusion expert Shelton Goode found that more than 70% of organizations with ERGs rely on these groups to build a workforce that reflects customer demographics. According to Goode, "The thinking was that customers would be more loyal and would feel more comfortable if they did business with people who understand them."
The same can be true for business performance. Affinity networks give traditionally underrepresented employee groups a stronger voice, allowing them to bring unique insights and potential improvements to business processes and strategies. The org-chart-agnostic nature of these groups promotes open idea exchanges.
3. Improved Hiring, Onboarding, and Training Environments
A truly diverse and inclusive organization begins the moment a new hire is planned. Unfortunately, efforts are often directed to the end of the process rather than the beginning. Employed correctly, ERGs can help. They provide the insights needed to find the right candidates by looking in the right places, optimizing success for the organization over time.
Successful affinity networks have processes in place to match new hires with experienced employees from the same background, easing the transition and optimizing the onboarding process. Ongoing training efforts based on similar principles show that mentors with closer affinities lead to more effective learning environments throughout the organization.
4. Practical Solutions for Focused D&I Initiatives
One of the greatest challenges of D&I strategies is taking what makes sense in theory and putting it into a practical work environment. It’s a sad but true fact that many diversity efforts die on the page where the strategy was written.
Implementation can fail due to lack of leadership buy-in, inconsistent applications, or simple semantics and pre-conceptions about the word diversity. Simply put, some companies don't have an invested group to take ownership of the process and drive it through every level of the organization.
This is where ERGs are invaluable. They not only offer insights for the strategy itself, but can bring that strategy to their own internal groups. The result tends to be smoother implementation and a more practical approach to the larger topic of D&I.
Read more about creating a workplace culture of diversity and inclusion.
How can companies form effective ERGs?
Combine the above benefits, and you have a powerful case for ERGs that's impossible to ignore. However, establishing these groups can be complex. First and foremost, organizational leadership has to be on board with the concept and the practical applicability of these groups as they relate to your D&I goals.
Next, see what initiatives, if any, employees may have started on their own. It’s not uncommon to find that some members of an organization have already started grassroots efforts along these lines. Seek out these people to see how they can help promote more formal ERGs throughout the company. Feeling like their work makes a difference is a core motivating factor for existing and new members.
Finally, soft promotions through internal communications channels can be a major boost to these efforts. Be sure to coordinate with the group's leaders to avoid overstepping boundaries, looking for partnerships where possible and help where desired.
Implemented correctly, ERGs can become the heart of many D&I efforts. Supporting and encouraging them throughout your organization should be a priority as you look to build a more inclusive, positive, and productive work environment.
Looking to ramp up your diversity & inclusion efforts? Reach out to your Phenom Account Manager, or request a demo to see how our platform can help.