Intro: What is an Employee Resource Groups (ERG)? 

Employee Resource Groups are employee-led groups within companies that promote inclusivity, community and representation. ERGs are most often built around shared identity, experience, interests, and more. They host events, hold regular meet-ups between members, elevate underrepresented employees’ voices, and advocate for community involvement

With a track record of increasing employee engagement, boosting retention and recruiting efforts and fostering innovative workspaces, it’s no surprise that 90% of Fortune 500 companies have ERGs. 

History

Employee Resource Groups have been around for decades. The first known ERG was the National Black Employee Caucus at Xerox created in 1970. Soon followed Employee Resource groups built around women, gender identity, sexual preference and more. ERGs have historically provided safe spaces for people to gather, share perspective and discuss current events, issues and insight.

Today

Given that context, it’s no coincidence that we’re seeing rapid ERG growth and an increase in company responsibility. We’re a critical juncture of what the “future of company culture” will look like, and it's clear that ERGs are playing a central role.

Today’s workforce is demanding companies lead with purpose, are seeking diverse workplaces that are dedicated to inclusion, and are fighting unprecedented levels of burnout. With all this considered, it’s no surprise that we’re witnessing a Great Resignation - with millions leaving the workforce, hitting new record highs each month. These workers are demanding belonging, well-being, and mental health be a priority in their workplaces. Enter: ERG’s. 

While ERGs are not a silver bullet, they’re certainly a good start in showing that employers care about their employees. 

Why create ERGs?

1. Innovation & The Bottom Line 

There is no denying that fostering an inclusive workplace means better business. Diverse companies are now more likely than ever to outperform less diverse companies based on profitability, according to McKinsey research. There are many reasons for this (some covered below in retention and recruiting), but at the end of the day, reflecting the diversity of the workforce and general population is good for business - especially as ‘minorities’ become the majority of the U.S. population. 

2. Retaining Today’s Employees

With employees facing unprecedented levels of burnout, they are looking for a sense of belonging, well-being, and positive effects on mental health - all benefits of ERGs. The ability of ERGs to create a healthy, attractive workplace are why 90% of Fortune 500 companies have ERGs. What today’s ERGs need is support, buy-in and the right tools to execute and be acknowledged for their work. 

3. Recruiting Tomorrow’s Employees

As covered above, if you want to recruit top talent from today’s workforce, they care deeply about diversity, equity and inclusion. The workforce is getting more diverse and demanding their employers prioritize DE&I in the workplace  (47% of Gen Z and 39% of Millennials identify as people of color, and 66% of employees want their company to prioritize DE&I more). With millions of workers quitting their jobs in the ‘Great Resignation,’ paying attention to what today and tomorrow’s workforce is looking for from companies is more important than ever. 

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Ensuring ERG Success 

1. Structure 

ERGs are run by employees passionate about the cause and identity at the heart of the group. This often means that they are conducting their ERG responsibilities on top of their primary function at the company. This can lead to burnout and disgruntled employees feeling unsupported if you don’t give them the structure and tools necessary to succeed. 

2. Visibility

Between planning and executing their goals within an ERG, keeping up with their assigned role within a company, and avoiding burnout - ERG leads and members simply don’t have the bandwidth to shine a light on their own work. That means a lot of ERG work goes unnoticed, down to even the existence of some ERGs. In fact, in one recent study over 50% of respondents were unfamiliar with the concept of ERGs and only 55% report their organization offers ERGs. So with the awareness around ERGs still growing, it's key that companies highlight the work that is being done and foster connection, acknowledgement, and collaboration between ERGs themselves. 

3. Measuring Results
   

We covered in an earlier section the positive impact ERGs can have on a company's retention, recruiting, engagement, and innovation - but demonstrating the impact individual ERGs have at their company can be a challenge. Reporting mechanisms are difficult to build without the right knowledge and tools. As more companies move towards compensating ERG leads and allocating budgets, it’s imperative that ERGs prioritize systems that can quantify the impact of their work. 

How to Create an ERG

So, you’re on board - ERGs are a central part of the future of company culture! So, where do you get started if you want to start one at your organization?

There are a few key components of starting an ERG. 

Here’s an overview:

1. Establish the core purpose of your ERG - what identity or challenge will you advocate for?
2. Recruit a group of people that could join your ERG
3. Get buy-in from leadership. ERGs often need what’s called an executive sponsor. This is someone on the leadership team who is aligned with the group’s efforts and can champion efforts when needed.
4. Create a charter for your ERG. This will formalize your mission, set expectations, and lay out responsibilities.
5. Get the word out! People need to know the ERG exists in order to support it!
6. Maintain & measure your impact.

Using a platform like Verbate gives you the tools needed establish, sustain, and measure ERG programs, so you don’t have to start from ground zero. Get in touch with us at Verbate if you want to learn more.