Why ERGs are vital for strong companies

With factors such as declining employee engagement and increasing hybrid worker malaise in the workplace, it has become even more imperative for companies to ensure their workforce feels supported, connected and engaged. Employee Resource Groups (ERGs), have emerged (or re-emerged) as powerful catalysts in this endeavor. In fact, the Rise Journey’s 2021 State of the Employee Resource Group Report found over 50% of companies surveyed have 3 to 6 ERGs, with 20% of those surveyed having 7 to 15 ERGs.

Defining employee resource groups

ERGs, once a niche concept pioneered by employees at Xerox, have steadily gained traction in recent years as organizations recognize their potential in reconnecting employees across an organization, while also promoting belonging and inclusion. Often formed by employees who share common backgrounds, interests or experiences, these groups serve as forums for networking, avenues for mentorship and opportunities to advocate for employee needs within a company.

Employee resource group examples can include groups representing women, LGBTQ+ individuals and additional untapped communities to those focused on veterans, employees with disabilities, working caregivers and beyond. ERGs enable companies to encompass a diverse array of voices and perspectives. At Chronus, for example, we kicked off ERGs last year, focusing on women and parents to start. While we started with these ERGs, we’re continuing to look at what other communities in our organization are looking for support, connection and continued growth. For us, this is about building opportunities and inclusion through employee-driven development.

The benefits of ERGs – both for employers and employees

ERG benefits extend beyond mere representation to tangible improvements for employers and employees alike.

Improves employee engagement

Firstly, ERG groups foster a sense of community and engagement. This is so important during this age of hybrid work. While some people are in-office and others are virtual, lingering disconnection can make employees feel isolated or not a part of their company or culture. Gathering through ERGs can give employees a touchpoint for interaction (socially and professionally). The hope is that from here they branch and make further connections across groups of people in the organization. This strategy gives employees a fairly immediate sense of belonging, which is especially hard in large companies.

Accelerates DEI

These groups provide a platform for underrepresented voices to be heard. By gathering these voices, ERGs can play a crucial role in shaping policies and practices that promote equity and fairness in the modern workplace. They can also serve as catalysts for cultural change by raising awareness about issues and driving meaningful dialogue about change across the organization.

Bolsters recruitment

In an era where job seekers prioritize diversity and inclusion, companies with robust ERG programs have a competitive edge in attracting top talent. Furthermore, employees who feel supported and included are more likely to stay loyal to their organization, reducing turnover costs and preserving institutional knowledge.

Encourages feedback and energizes culture

By encouraging an inclusive environment through ERGs, companies can create a workplace where every individual feels they can bring their authentic selves to the table. It also gives senior leaders a focused community group to listen to and learn from.

When I was an executive sponsor for the Black employees at UserTesting, I was told by the community that there was very little understanding of what stock options were available, so we hosted a town hall discussion to answer those questions. ERGs can be a way to create dialogue between company leaders and employees to learn about specific needs, interests or concerns that they can then apply globally for better engagement and retention.

What HR should do (and not do) when creating ERGs

While ERGs hold immense potential, their effectiveness hinges on formal structure and guidance. And this is imperative. Ineffective ERGs can be more detrimental than no ERGs at all. McKinsey & Company found employees who rated their ERGs as effective or very effective were significantly more likely (24 percentage points to be exact) to report positive inclusion than employees who rated their ERGs as ineffective.

To maximize the impact of ERGs, HR professionals should follow these employee resource group best practices:

• Establish clear goals: Define the objectives and purpose of each ERG to ensure alignment with the company’s broader diversity and inclusion initiatives.
• Encourage support from leadership: Secure buy-in from senior leadership to demonstrate the organization’s commitment to fostering diversity and inclusion. Without it, ERGs could look like a check-the-box tactic.
• Create an open and inclusive environment: Foster an environment where all employees feel welcome and encouraged to participate in ERG activities, regardless of their background or level within the organization.
• Provide resources: Make sure the ERG program has what it needs to thrive. This can mean training materials, technology and (yes) also budgets to host events, facilitate meetups and more.
• Utilize tools and technology: Creating a standardized experience for ERG participants no matter what ERG they choose to be a part of creates a better sense of community and investment in the initiative. Introducing ERG software to help run a program can automate the enrollment process while helping with participant engagement, surveys and event scheduling.
• Measure success: Develop metrics to assess the impact and effectiveness of ERGs, based on the goals of the program you originally set up. Report on outcomes and share these results with the rest of your organization. Be sure to tell your story broadly for greater buy-in and involvement.

By following these steps, your ERG programs will be better equipped for success and scale.

Related: 10 trends to help employers stay at the forefront of a hybrid workforce

Why encouraging employee friendships is important to a sense of belonging

Research has consistently shown that strong interpersonal relationships at work not only enhance job satisfaction but also contribute to employee retention. Employees who have friends in the workplace are more likely to feel supported, engaged and motivated to perform their best. The problem these days is friendships in the workplace aren’t as likely as they used to be. That same research found only 2 in 10 felt they had a best friend at work.

This is why promoting initiatives like ERGs can encourage cross-functional collaboration and “friend-building” activities which can lead to better interactions and relationships for employees. With a hand in creating connection and building inclusion, ERGs are a vital part of creating a thriving and resilient workplace where employees want to be versus have to be.

 David Satterwhite, CEO of Chronus.