How Employee Resource Groups Can Drive Business Growth

How Employee Resource Groups Can Drive Business Growth

What sort of business do you run? Is it purely focused on business goals and objectives, or are you equally focused on promoting a strong company culture that embraces inclusion and diversity? If the latter, do you feel that that strong culture creates a sense of community that leads to low staff turnover rates and more engaged employees?


Many businesses see employee satisfaction and engagement as being positive internal factors that can help improve efficiency and productivity. However, a strong sense of community can lead to the formation of employee resource groups (ERGs) which in turn can drive business growth as well as a positive public perception of your business. 


What are ERGS, and how can you support them in driving that growth?


What are employee resource groups?


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When it comes to DEI (diversity, equity, and inclusion), there are many factors to consider, from race to age to gender or sexual orientation. In most cases, members of ERGs will share a common characteristic. 


They exist to support other members of the group (or non-members who share the characteristics of the group), to aid in career development and progress, and to create a ‘safe space’ where members can discuss any problems they may have encountered. Sometimes, allies of that group will be invited to join the ERG.


Many leading businesses have ERGs within their workforce. In fact, some 90% of Fortune 500 companies have active ERGs. ERGs can be formed by different groups who feel that their voices are better heard when they are united. Some common characteristics that form ERGs include:


  • Race

  • Gender

  • Nationality 

  • Religion

  • Age

  • Sexual orientation

  • Disabilities 


Many of these groups feel underrepresented in the workplace and in some cases, they feel they may be discriminated against when it comes to promotion or development. When it comes to race, Caucasians make up 77% of the US workforce, blacks 13%, and Asians 7%. If a business wants to promote DEI in their organization, then ERGs can be the ideal partner. 



Why have employee resource groups?


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Sadly, workplace discrimination is still a major problem, with a staggering 91% of workers saying they’d experienced some form of discrimination. While most discrimination occurs amongst the workforce, there are also examples of organizational discrimination that need to be addressed. 


Pay disparity is still an issue for many groups and this is one area where ERGs fight for equality. You could argue that ERGs are needed for two main reasons; they help build a more inclusive workplace where your workers feel supported and they empower your employees to make their voices heard. 


When people feel underrepresented, they feel that their voices are silenced. Forming an ERG not only makes them feel heard, but also builds a stronger sense of community that can benefit your entire business. ERGs can highlight any concerns that can be recorded on your human resources software so that problems can be addressed by both HR and management. 


Incorporating advanced HR tech into this process can enhance the efficiency and responsiveness of addressing these concerns, ensuring that the valuable insights from ERGs are integrated quickly and effectively into company policies.


It’s not always about ‘putting out the fire’ that caused the issue in the first place, it’s about a business developing and implementing policies so that the problems do not arise again. ERGs - in partnership with management - should be looking beyond any issues and helping create a more inclusive environment that boosts employee engagement and ensures that all employees have equal opportunities when it comes to career action plans and development. 


Any ERGs formed within your organization should be looking to achieve some or all of the following points:


  • Allowing employees to identify with a particular group, and to connect with and support each other. In turn, this can promote empowerment and can also lead to organizational support. 

  • Improving inclusivity in your company culture by ensuring your whole workforce is culturally aware and sensitive to others’ beliefs or ways of life. The benefits of diversity are manifold, enhancing creativity, decision-making, and overall business performance by bringing a wide range of perspectives and experiences to the table. 

  • Spreading awareness of different characteristics. This can especially focus on how those characteristics may affect the workplace. For example, different religious beliefs may include recognition of certain days as well as practices such as fasting during Ramadan. 

  • By spreading awareness, they can spread a better sense of community, which can lead to improvements in employee engagement and productivity. 

  • Helping improve access to learning and other resources by ensuring everyone is on a level playing field.

  • Unlocking the potential of every employee through equal opportunities. This can also help when you are looking to acquire new talent. 

  • Improving the public perception of your business by being recognized as an employer who embraces and nurtures diversity and having an inclusive environment as a workplace trend


The benefits of ERGs


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Employee resource groups can benefit both your business and your employees. When positive changes such as pay equity happen within your organization, you are more likely to attract quality talent when recruiting.


Some of the direct benefits ERGs can have include:


  • They offer a platform where minorities and underrepresented groups can make their feelings known.

  • They offer peer support.

  • They give those groups a voice that was previously unheard.

  • ERGs can vastly expand an individual’s professional network, especially when similar ERGs in different organizations connect with each other. 

  • They can improve access to development and break barriers such as the glass ceiling so people can progress to leadership roles. 

  • They can help your entire workforce to understand and empathize with different cultures and groups. 

  • ERGs can help be the catalyst for organizational change which can lead to a more positive image for your business. This can lead to business growth and make you an attractive prospect during any recruitment process. 


When employees feel listened to and know that you are protecting their rights and sheltering them from discrimination, they will feel more engaged in working towards your success. 


How to build employee resource groups


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You may wonder if there is a need for ERGs within your business. You may even be surprised to find there is such a need. The thing to remember is that you cannot lead an ERG, though you can start or fully support one. If you do want to start one, or if employees have approached you about starting one, how should you build or help them to build?



  1. Align goals


Ideally, you want your long-term business goals and those of the ERG to align. That may seem difficult at first, but discussions can often find that important common ground. For example, you may have several single parents working for you who want better shift patterns or childcare provision (either on-site or partly financed). 


Your long-term goals may include finding increasing output and productivity by adding new working hours. Looking for the best payroll for small business to track time worked, you can identify shift patterns that suit some or all of those parents, and you can give preference when assigning new shifts. This aligns both your interests and can help in working towards both your goals. 



  1. Support


Any DEI policy should be company-wide. The same goes for supporting any ERGs within your business. However, do not equate support with control. ERGs should be independent and work for the interests of their members. Support should start from the top down and needs to be unequivocal and include all members of your C-suite. 


You may offer financial support if needed, and you may also decide to make other allowances such as allowing some time off for meetings or for attending courses, such as diversity training. You should view any support as an investment in the future of your employees and, ultimately, your business as a whole. For example, you might allow time off to train in the use of new email marketing platforms, so time off for diversity training should be seen as the same. 


Widespread support may not always come easily from executive-level staff, so you should show them the potential benefits of support and can also emphasize the following points:


  • How the goals of the ERG align with your own business goals and plans for growth.

  • Internal data from HR showing the needs of underrepresented groups and any factors such as pay disparity.

  • Any research or articles on ERGs in other businesses that have helped develop a better company culture and/or that have fostered business growth. 

  • Data you have on any reported cases of discrimination (of any type) within your organization. 



  1. Identify a team


If your employees have decided to form an ERG, then you want it to be as autonomous as possible, though appointing a liaison officer would be a good idea. However, if you have identified the need for an ERG, then you may want to appoint a team to run it until they are up and running and can decide on the makeup of the team themselves. 


Depending on the size of your business and the size of the ERG, there may be a lot of work to do. Besides using workflow management tool(s) to improve efficiency, as part of any support, you may want to consider some level of financial support. This could range from a full-time position where warranted to covering expenses for attending meetings as well as allowances for any required time off. 



  1. Identify roles


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The roles within any ERG will depend on the size of your business and the scope of work they plan on undertaking. Remember, you are acting in an advisory capacity here, so be prepared to walk away if members feel you are being intrusive. You can suggest what roles the group may need, but, other than any liaison officer, you shouldn’t be suggesting who does what. Some of the roles they may need can include;

  • Chairperson. Will coordinate all activities, chair meetings, and may be the contact person for management.

  • Vice-chair. Would help the chairperson and deputize for them when they are absent. 

  • Communications. In charge of all communications with members and for letting people know when there are events or meetings. As part of the organizational support, you might let the ERG use your SMS messaging for business service. 

  • Secretary. Responsible for recording all meetings and ensuring notes are available to members. 

  • Treasurer. If there is any financial support, or if the ERG raises its own funds, it will need a treasurer to keep track of income and expenditure.


Depending on the size of the ERG and its remit, there may be a need for other officeholders such as education officer, diversity and inclusion officer, and so on. Again, other than guidance and support, these decisions should be made by the ERG itself. 


Performance review questions could be designed to ensure that the roles evolve to meet the changing needs of the group and the organization as a whole.


Additionally, consider utilizing an employee headshots platform to help members of the ERG connect with each other visually and foster a sense of community.



5. Action!


Once the ESG has been formed, it can move to recruiting members from within your workforce. One of the first steps after the formation is to spread awareness. You can again provide support by allowing them access to company communication platforms such as intranet. 


Any initial meetings should be about growing the membership and identifying any common issues that people feel need to be addressed. 


Keep your support unobtrusive and collaborative where possible. Ideally, your role should be that of a mentor guiding a student. While you want any ERG to be aligned with company goals, you also want to encourage autonomy and a shared vision of promoting diversity and inclusion in the workplace. 


The takeaway 



While it stands to reason that the primary goal of any ERG is to improve inclusion and recognize diversity in the workplace, the knock-on effects can be hugely beneficial to your business. If the ERG is successful, then they have helped improve both your company cultures and to raise levels of employee engagement and satisfaction. 


For business owners and managers, having a happier and more engaged workforce can not only increase efficiency and productivity, it can help drive business growth. When you consider that today's consumer is more savvy and ethical, it can also help increase your customer base as they may be more likely to buy from a business that promotes inclusion and supports a diverse workforce.