Leveraging Employee Resource Groups

Many organisations have employee resource groups (ERGs). ERGs can serve as powerful vehicles for change and representation within organisations, but very few seize the opportunity to leverage these amazing resources. In this article, I will attempt to define the purpose of such groups, how they can be leveraged for leadership and talent that often goes unnoticed and, finally, how companies can make it worth the while of those who do get involved.

The Purpose Of Resource Groups

In 1964, Joseph Wilson, the then CEO of Xerox group, came together with Black employees to form the Employment Caucus Group - what we now recognise as the first employee resource group. The purpose of the group was to address unfairness experienced by Black employees in the group around pay and opportunity.

It is now estimated that 90% of Fortune 500 companies in America have ERGs. The causes have since extended beyond race and ethnicity to also include gender, sexual orientation, ability, parents and other affinities. 

Here in the UK, and some parts of Europe, larger organisations in the private and public sectors have also taken on board the concept of ERGs.  However, having an employee resource or affinity group come together to address issues of representation and equity fills certain members of staff with fear and concern. Those of us with clients in the culture change space see ERGs as an opportunity to give agency to its members and its allies across the organisation.

The purpose of ERGs, in my opinion, is to help align the interests of said groups with the overall goals of the organisation - to be more inclusive and equitable. They should align with the wider purpose, values and expected behaviours of the organisation they are part of.

For example, a gender-based ERG may work with their senior leadership team to identify blind spots around the experiences of women in the workplace. From leadership development to hiring. From appropriate conduct to how they are involved in product development.

The policy or drivers that help shape such a group could also be applied, with adjustments where necessary, to other affinity groups. 

Any of these groups are also formed because:

•  Members do not feel comfortable or empowered to have an open discussion within their business unit about the issue. 

• Members felt isolated in their experiences prior to the group forming.

ERGs provide a space for people across different divisions or business units to come together to share and learn from one another’s experiences, in the hope of making things better.

The senior leadership of the company now has a direct point of contact for addressing a particular group of employee pain points. The experiences and feedback from ERG members can then be used to help shape more inclusive cultures This also feeds into how they engage with other stakeholders - using that knowledge to shape customer engagement, creating a more diverse supply chain or recruitment strategies. Senior leadership allyship/sponsorship/buy-in is a benefit to the ERGs and the wider organisation.

The Leadership Pipeline

Organisations have been encouraged and in some cases “coerced” into producing pay gap reports. Gender and ethnicity pay gap reporting has increasingly become part of external communications across various sectors.

The reasons for pay gaps are complex. Although, a certain school of thought would argue that just being transparent about pay, even if only internally, would help. That said, a big part of the pay gap problem is related to seniority and positions of leadership. You are going to be paid more if in a more senior role than a junior or part-time worker. ERGs, typically made up of junior and middle-management employees, are a great way to identify potential leaders in waiting.

The structure of most ERGs involves a chair or chairpersons, a committee of members and a senior leader or two who serve as sponsors (sponsors being defined here as a leader who actively advocates on your behalf). 

Having someone of senior leadership in a room is not only a template of good leadership for members of the ERG but also an opportunity for these members to become leaders themselves. I always advise clients that building that narrative into the success of the ERG is one of the best ways to develop leadership talent, especially from underrepresented groups.

ERGs have been a great resource for several of my clients, helping to fill team leadership roles and board seats! Members actively being coached and guided to take on roles as non-executives, chairs or other roles for external organisations has massively helped in the development of said leaders. Using either chair or committee leadership as a springboard is a great way for ERGs to leverage the leadership sitting right in front of them and close gaps around not just pay but attrition too.

The final point about leadership for me here is that all ERGs should be linked to a common purpose or goal for the organisation. There should also be transparency around funding measures, programmes and outreach. I have seen organisations lose so much impetus because a large chunk of funding just goes to say gender, and then LGBT and ethnic groups fighting for the remainder, irrespective of some of the less vocal groups such as parenting, ability, etc.

Making ERG Part Of Employee Performance

Rather than seeing the role of employment or business resource groups as some voluntary PR puff piece for underrepresented groups, organisations should not only seek to leverage such groups to identify leadership and talent gaps but also tie it into the performance objectives of those who contribute to it.

One of the reasons staff don’t get involved in these groups is that they realise it is very easy to get involved in parts of the business which take up a lot of time, for which they are not paid.  Heck, it’s very often members of ERGs that are part of the pay gap, so surely this is an opportunity to tie it into performance objectives linked to pay. 

Senior leaders who get involved in ERGS are acutely aware that their representation and gleaning of information benefit the company, and you can bet your bottom dollar they are getting paid.

The second reason I believe it should be tied into performance objectives is to get line managers to understand how important this role is. 

If I had a pound for every ERG member who has told me their bosses dismiss what is essentially a great opportunity to add value to the company, as something that is just a distraction. Tie it in yo.

Women, ethnic minorities and other underrepresented groups often feel they have to work twice as hard to be recognized and rewarded. Rather than framing this as some voluntary nice to have, better to build it in as part of the work they do. This is equity in action. This is how you can have a concerted effort to help close those gaps of retention, unequal pay and staff engagement.

Finally, not everyone believes in ERGs. Large organisations like Deloitte have done away with them. Many see it as divisive, which is baffling as these groups welcome all members as allies and supporters - as long as those supporters don’t try to dominate the narrative. But hey.

I firmly believe that by focusing on the points I have mentioned above a number of groups have already been able to leverage the power of ERGs, to the benefit of members and the organisation as a whole.  I think more should be brave enough to step up and do the same.