Insights for Organisations

What is an Employee Resource Group and Why Do They Matter?

Paul Brown
05.01.24

Does your organisation have an Employee Research Group? According to McKinsey, 90% of Fortune 500 companies have employee resource groups or ERGs. ERG stands for, employee-led entities that are transforming workplaces across the globe, shaping an inclusive and collaborative environment. We explore ERGs in more detail, looking at their multifaceted impact on diversity, inclusion, and professional development, and how to implement ERGs in your organisation.

What’s in this article?

Executive Summary

You can unlock the full potential of your organisation by embracing the power of employee resource groups (ERGs). Employee-led groups based on shared interests, backgrounds, or characteristics, are catalysts for fostering diversity, inclusion, and professional growth within your workplace.

To successfully implement ERGs, you must secure leadership support, define clear objectives aligned with the organisation’s values, actively encourage employee involvement, and establish KPIs for ongoing evaluation.

What is an employee resource group (ERG)?

An employee resource group, often abbreviated as ERG, is a voluntary, employee-run network within a company that focuses on specific demographic or affinity groups. These groups are formed by employees who share common interests, backgrounds, or characteristics. ERGs can revolve around various dimensions of diversity, such as ethnicity, gender, sexual orientation, age, disability, or a combination of these characteristics.

Why are employee resource groups (ERGs) important?

ERGs operate as spaces for employees to connect, collaborate, and support one another. They provide an environment where individuals facing similar challenges, opportunities, or experiences can come together to share insights and perspectives. ERGs typically work towards fostering an inclusive environment by organising events, training sessions, and initiatives that promote diversity and awareness within the workplace.

  1. Promoting diversity and inclusion
  2. Professional development
  3. Employee engagement and satisfaction
  4. Cultural competence
  5. Recruitment and retention

1. Promoting diversity and inclusion

ERGs play a pivotal role in advancing diversity and inclusion initiatives within an organisation. By providing a voice to underrepresented groups, ERGs contribute to a more inclusive work environment where all employees feel valued and heard. In fact, according to McKinsey reports, 66% of employees believe that community is created effectively through ERGs.

2. Professional development

ERGs offer opportunities for professional growth and development. Members can participate in mentorship programmes, skill-building workshops, and networking events that can enhance their career prospects. There are many soft skills that can be learnt from one another within the groups that can also be greatly beneficial for professional and personal development, such as listening skills, empathy, and team building, as well as offering ample opportunities for professional networking and expanding your contacts in the industry,

3. Employee engagement and satisfaction

When employees feel a sense of belonging and connection, their engagement and satisfaction levels increase. ERGs create a sense of community within the workplace, which can positively impact employee morale and overall job satisfaction. Research from Oxford University shows that happy workers are 13% more productive, so not only does this benefit employees but businesses too.

4. Cultural competence

ERGs help foster cultural competence by educating employees about different backgrounds, perspectives, and experiences, and help individuals recognise and tackle their own unconscious biases. This, in turn, promotes a more understanding and empathetic workplace culture. A more tolerant and empathetic workplace is better for everyone, leading to greater psychological safety, creativity, collaboration, and innovation.

5. Recruitment and retention

Companies with strong ERGs often find it easier to attract and retain diverse talent. Prospective employees are more likely to be drawn to organisations that actively support and celebrate diversity. Not to mention, ERGs can play an important role in facilitating a smooth onboarding process for new hires. According to McKinsey reports, 90% of organisations use ERGs in their recruitment onboarding processes, which is indicative of the effectiveness of this approach.

How to implement employee resource groups in your organisation

Now’s the time to consider implementing employee resource groups to improve your workplace dynamics, and here’s how to do just that:

  1. Gain leadership support
  2. Define ERG objectives
  3. Identify ERG categories
  4. Encourage employee involvement
  5. Establish ERG leadership
  6. Allocate resources
  7. Measure and evaluate

1. Gain leadership support

Leadership endorsement is critical for the success of ERGs. Engage top executives and secure their commitment to champion and actively support the establishment and growth of ERGs.

2. Define ERG objectives

Clearly articulate the purpose and goals of each ERG. Align these objectives with the organisation’s overall mission and values to ensure cohesion and contribution to broader organisational goals. For example, you may be striving to build a more inclusive culture or reduce specific stigmas within your organisation.

3. Identify ERG categories

Determine the diversity dimensions around which ERGs will revolve, such as ethnicity, gender, age, LGBTQ+, or disabilities. Allow flexibility for employees to form ERGs based on shared interests and experiences. It can be beneficial to put out a survey to gain employee feedback on the types of groups they would like to see formed. After all, ERGS are for employees so should be catered for them! It’s important to note that these categories might change over time or need to be added to as employees come and go.

4. Encourage employee involvement

Actively promote ERG participation across all levels of the organisation. Create a welcoming atmosphere where employees feel encouraged to express interest in joining or forming a group. You should begin promoting your resource groups through company emails and newsletters so that everyone knows they exist and as many people benefit from them as possible.

5. Establish ERG leadership

Although employee resource groups are led by employees, they still require some level of structure. Appoint capable leaders or co-chairs for each ERG to ensure they are properly run and provide value to group members. As such, you should provide leadership training and support to empower them to effectively guide and represent their respective groups. Some organisations choose to compensate ERG leaders for their time, with approximately 42% of ERG leaders receiving an annual salary for their contributions, averaging around $2,000 per year – but this is not always the case and many choose to volunteer to do their part for making everyone feel included.

6. Allocate resources

Running an employee resource group does not necessarily need a budget, however, a little can go a long way. Dedicate budgetary resources to support ERG initiatives, events, and programmes and see your groups flourish. Allocate time for employees to participate in ERG-related activities and see a spike in employee wellbeing, job satisfaction, and productivity!

7. Measure and evaluate

Establish key performance indicators (KPIs) to measure the success and impact of ERGs. Regularly assess engagement, satisfaction, and effectiveness through surveys and feedback mechanisms to identify areas for improvement. This way, you and your employees can truly get the most out of these efforts.

Employee resource groups at FDM

At FDM, we are committed to supporting diversity and inclusion not only within our own organisation but the technology sector as a whole. Our employee networks offer a community for shared experiences, discussions, and support. From our Elevate and Unique networks to our Pride and Faith networks, our teams are dedicated to supporting employees from all walks of life.

Learn more about FDM’s commitment to diversity and inclusion.