In recent years, there’s been a tidal shift in the way companies value their employees, and nothing better showcases this shift than the emergence of employee resource groups (ERGs). An ERG is a group of employees who come together around a shared identity or interest.
When implemented well, ERGs prove that employment is no longer just about productivity and output. It’s about everything employees bring to the table—their values, their lived experiences, their advocacy, their humanity.
This revelation is transforming the relationship between employers and employees. At the Impact Studio Conference, Kari Niedfeldt-Thomas, managing director of corporate insights & engagement for CECP, put it this way: “Companies have identified that their stakeholder number one is their employees.”
As corporate leaders look to shift from an extractive relationship with employees to one built on empowerment and transparency, ERGs play a key role.
What is an Employee Resource Group (ERG)?
Employee resource groups are identity-based communities or affinity groups that are voluntarily formed and led by employees, with involvement and support from corporate leaders.
ERG affiliation can be based on:
- Demographic identities, like gender, race, sexual orientation, religion, ability, veteran status, or neurodiversity
- Role-based identities, like working parents and caregivers, single parents, career stage, or remote employees
- Interests, like diversity, equity, and inclusion (DEI), climate change, or mental health
The first official ERG, the National Black Employee Caucus, was formed in 1970 at Xerox. Now, approximately 90% of Fortune 500 companies have an ERG. Much of this growth is recent, according to McKinsey: about 45% of companies supported ERGs before 2020, but after the pandemic, 80% of companies now support them. This is good news for employers vying for young talent since 86% of Gen Z workers expect companies to have ERGs.
As you look to support ERGs, follow your employees’ lead in what interests them most. At Submittable, we have four ERGs:
- Mental health advocacy
- Working parents and caregivers
- Remote employees
- Diversity, equity, and inclusion
ERGs improve the employee experience
Employees who join employee resource groups develop deeper connections with their colleagues and with the company more broadly. The experience benefits them in multiple ways.
Belonging
ERGs serve as a safe space for employees to meet and connect with others who identify as they do or share common interests. They foster a sense of belonging and camaraderie, which is especially important in remote and hybrid workplaces where many employees struggle to find and connect with coworkers.
Awareness
Members of ERGs are committed to raising awareness about cultural or workplace issues that affect their community within the company and in society. They organize events such as social meetups and participation in Pride marches. In some companies, ERGs work with the HR or DEI team to host unconscious bias or allyship training.
Advocacy
ERGs help to amplify the voices of underrepresented employees. These groups serve as a channel for communication with leadership on shared interests, such as DEI, and they hold leadership accountable for promised improvements and change.
Social impact
ERGs help employees get involved in community service initiatives, particularly ones that positively impact the causes and communities they identify with, for example, volunteer events, giving campaigns, and connecting with local community organizations.
ERGs bolster company culture and employee engagement
Employees aren’t the only ones who stand to benefit from strong ERGs. Companies reap the rewards when they support these employee-led groups.
Two-way communication
Corporate leaders do not lead ERGs, but they learn from them. Leadership representatives meet with ERGs to understand and report back about group concerns. ERG members let them know if policies and company values are truly aligned. For example, leaders can expect to hear how successful company inclusion initiatives really are and where improvements are needed.
Employee engagement
When employees collaborate in ERGs, relationships across departments and organizational levels get stronger. ERG participants feel a sense of community, belonging, and trust—the ingredients for psychological safety at work. According to Qualtrics’ 2021 Employee Experience Trends Report, employees who feel a sense of belonging are also more engaged, a leading indicator for employee satisfaction and retention.
Cultural understanding
ERG social and educational programs increase the cultural awareness and understanding of co-workers and leaders. For example, these programs may explain and encourage allyship or help colleagues make sense of holidays or religious traditions. The authenticity fostered in these spaces helps companies avoid missteps such as Walmart’s Juneteenth ice cream and Burger King’s Pride Whopper, two particularly bad examples of business showing a lack of cultural understanding.
Professional development
Employees who participate in ERGs have opportunities for professional development that might not otherwise be available to them. They can find mentors or mentees in their group. In ERG roles, they have the chance to develop leadership skills and other competencies they can’t normally practice on the job.
Product development influence
ERG members are a valuable source of feedback on a company’s product roadmap. Patricia Toothman, social impact manager at Splunk, said, “We’ve had our Disabled=True ERG help redesign products… so folks with sight imparities could access the product better.” If consulted, ERGs can offer product development guidance that prevents disastrous marketing campaigns. A critic of Walmart’s ice cream blunder said it’s “important to have diverse voices at the table when making strategic business decisions. When you don’t, you end up making costly, foolish mistakes.”
ERGs are an essential element of CSR strategy
At Splunk, ERGs also provide feedback on corporate social responsibility (CSR) initiatives, such as the matching gifts program, volunteer time off, and grantmaking. Toothman advises meeting regularly with ERGs to discuss the direction of CSR programs and the social impact and community service ideas they’d like your company to explore and support. She emphasized the importance of “bringing folks along on the journey, getting their buy-in, their feedback on the direction that you’re taking so they can help advance your work.”
The awareness and education programs offered by ERGs help to spread a more inclusive culture throughout the company. For example, hearing about DEI issues from coworkers may make a stronger impact on employees than hearing it from consultants in a training session. ERGs provide a much-needed reality check for corporate leaders about how inclusive and fair company practices and policies really are.
If you welcome their perspective, ERGs can provide frank insight on sensitive topics. They can tell the marketing team if an advertisement appears tone-deaf or disrespectful, or if jumping on the latest social media meme could be seen as virtue signaling, pandering, or being authentic.
When the CSR team, corporate leaders, and ERG members listen to and learn from each other, the impact of a company’s CSR program grows. CSR programs benefit from giving ERGs a strong role by tapping them to help select causes and nonprofit partners to support, design programs, and drive participation. As grassroots advocates, ERGs help grow CSR initiatives from the bottom up. For teams looking to strengthen the connection between their CSR strategy and ERGs, it’s essential to have CSR software that brings them together.
Laura Steele is a social impact writer and editor at Submittable focused on the world of grantmaking and corporate giving. Her work often explores the connection between technology, equity, and social good. She also writes fiction and nonfiction. You can read some of her stories and essays at laurapricesteele.com.