What is an Employee Resource Group?
The traditional definition of an Employee Resource Group (ERG) is a group of employees who share the concerns of a common race, gender, national origin, sexual orientation, or background/experience. As the name suggests, these groups are employee-led and tend to meet on a frequent basis to create awareness, impact the business, and provide community. Employee resource groups (also known as Affinity Groups) were initially started in the 1960s. They began as groups of underrepresented minorities with the goal of addressing racial tensions and providing a support network. The first known ERG was started by black employees at the Xerox Corporation with the support of the CEO at that time. According to the National Black Employees Association, the goal was to help ensure equal employment access and representation for black employees and other minorities by communicating opportunities for upward mobility and promoting the total development of its members.
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In recent years, ERGs have evolved into groups of like-minded people and allies in search of a sense of community and inclusion in the workplace. The original goal of upward mobility and overall inclusivity is still at the root of these groups. They have also been valuable in retaining and recruiting diverse top talent. According to Bloomberg, companies with dedicated ERGs have reduced turnover rates, increased performance on goals, and increased productivity. There are many additional benefits to having ERGs at your company. Here are four of our favorites.
Four Benefits of ERGs:
1. Foster Community
ERGs foster a sense of community in the workplace and can also be a great way for employees to meet and get to know their coworkers outside of their day-to-day teams. For example, an ERG for employees who are parents within the company gives them a place to come to and discuss the challenges of being a working parent. They could come up with solutions to those challenges or just simply have a space where they can talk to people that they relate to. Here at Justworks, we have an ERG for parents/caretakers called Family Matters that provides a community of new and experienced parents/caretakers who share their stories regarding parenthood and taking care of others. It’s a great opportunity for employees to network with people who have been experiencing similar situations.
2. Promote Education About Diverse Groups
A common misconception when it comes to ERGs is that they can promote exclusion. That is simply not the case. The idea of these groups is to create a safe space for a group of people to promote inclusion and belonging. That doesn’t mean that other people who don’t identify the same way are unwelcome. ERGs should be open to all employees. Encouraging any and all employees to attend different ERG activities is a great way to create a culture that embraces and celebrates people’s differences. Often times, ERG activities are great ways for everyone in the workplace to walk away learning something new.
3. Provide Developmental Opportunities
Since the groups are led by employees, many employees have the chance to take on a leadership role they don’t necessarily have in their day job. Being a leader of an ERG can be a big responsibility, and the employee would have to have the passion to do the extra work. It can be rewarding for those who opt-in, and it often helps develop their management, problem-solving, and leadership skills. Employees can make a significant impact on the workplace and aid in promoting a culture of inclusion.
4. Supports Business Goals
As an employer, ERGs can help further your business goals. You could include ERGs in focus groups to help sell a product. They could also be beneficial when making certain business decisions as a way to offer a different perspective. Having multiple viewpoints means that a project is being seen at all angles. A strategy or campaign can be more refined, researched, and ready for a successful launch, which could bring great results for the business.
As we mentioned, ERGs should be employee-led. However, when it comes to forming ERGs, it’s important to have top executives and/or leadership teams get involved on some level to show support for the groups. Executive engagement can ensure well-structured progress and help ERG leaders align their goals with the company’s mission.
Being up to date with what conversations are being had in ERGs can provide executives with insights on their employees’ concerns, ideas, and interests. Consider hiring a designated Diversity and Inclusion employee to help implement a strategy and encourage the forming of ERGs at your company. However, it is important to remember that Diversity and Inclusion is everyone’s job. Building a diverse and inclusive workplace doesn’t happen overnight, but ERGs can be a powerful step forward to greater inclusion, diversity, and belonging.
This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, legal or tax advice. If you have any legal or tax questions regarding this content or related issues, then you should consult with your professional legal or tax advisor.