Employee Resource Groups: A guide to effective ERGs

What are Employee Resource Groups? 

There are a lot of different terms floating around the topic of ERGs. Employee Resource Group is currently the most popular way to describe a group of employees that have organized themselves around something they have in common. However, they have many different names.  

These groups often focus on a demographic marker, such as gender, LGBTQ+ identity, religion, or ethnicity. They can provide a forum where employees with a particular experience of the world and the workplace can gather to support each other’s personal and career development. 

ERGs werden häufig offiziell vom Arbeitgeber gefördert. Dies kann die Bereitstellung von Finanzmitteln oder die organisatorische Hilfe bei der Durchführung von Veranstaltungen für ihre Mitglieder und andere Mitarbeitende umfassen. Darüber hinaus haben die Verantwortlichen der  ERGs oftmals die Möglichkeit, direkt mit der Geschäftsleitung zu sprechen. Dadurch können ERGs ihre Mitglieder nicht nur intern unterstützen, sondern sich auch für sie einsetzen und Änderungen fordern, die ihren Mitgliedern zugutekommen.  

The History behind ERGs 

The first ERGs were founded in the US by Xerox in the 1970s, beginning with the Black Employee Caucus, which had already informally existed in the 1960s, and followed by the Black Women’s Leadership Caucus. Hewlett Packard then founded the first LGBT ERG in 1978, and the programs have only increased in popularity through the last decades. As DEI became a higher priority in the 2010s and early 2020s, ERGs are a standard feature for many companies, with 90% of Fortune500 companies reporting having at least one ERG in 2016.

Beyond ERGs: Affinity Groups, Employee Networks, and BRGs 

ERGs are not a new concept, and with DEI funding under threat, they may not be the final form of employee networks. Here are some other terms under which employees have gathered to create communities: 

Affinity Groups 

Affinity groups are the unofficial version of ERGs, and as such were some of the earliest examples of employees organizing themselves. While some affinity groups are based on similar demographic backgrounds to common ERGs, others are more focused on common interests, like cycling, movies, or parenthood. They are generally separate from HR oversight and are self-managed, and they are often self-funded as well. However, they still offer plenty of networking opportunities for employees and can be valuable to a thriving company culture. 

Employee Resource Groups / Employee Networks 

ERGs were once more commonly called employee networks. They are the next level of formality after affinity groups, which are often entirely self-organized and not supported by the organization. ERGs are instead actively encouraged and promoted by management. They receive a level of funding and practical support from the business, while they may still fundraise for causes or to fund larger projects. Their existence supports DEI goals and forms part of many DEI strategies, but they may not necessarily have their funding or organizational support tied to fixed KPIs. 

Business Resource Groups 

Potentially the next iteration of Employee Resource Groups: BRGs bring together the interests of affinity groups with the institutional support of ERGs and align them with core business goals. BRGs may have specific goals assigned to them, whether that is increasing retention among a certain group, supporting targeted recruitment efforts, or supporting their members through more specialized onboarding and mentoring programs.  

In part, the reframing of ERGs as BRGs is a response to a backlash in many parts of the US against DEI initiatives. If you can prove that your ERG is a net benefit to the business, then you can preserve your funding and support from HR and beyond. In organizations where ERGs always struggled for funding and support, BRGs can help to convince senior stakeholders of their value

What are the benefits of ERGs? 

Let’s examine how Employee Resource Groups benefit employees and employers. Some of these points may overlap, but it’s all about perspective. 

Benefits for employees 

• Community building. Annual research conducted by Perceptyx suggests that employees who are not involved in ERGs are 1.4 times more likely to report a lack of belonging within an organization. Members of ERGS also feel safer to be more authentic in their workplace. 
• Mentoring. With ERG members coming from across the entire business and from all hierarchy levels, they are a great basis for establishing mentor-mentee relationships. 
• Skills and career development. Leadership roles within ERGs can give employees the chance to learn skills they might not need in their own role, such as project management, internal communication, or event planning. This, alongside the increased visibility all members of an ERG acquire by organizing projects and events as a group, can lead to promotions and identification as a future leader within the broader organization. 
• Ability to effect change within the organization. Many ERGs are explicitly founded with the goal of changing the company from within. Whether by educating their colleagues and senior leadership on the needs of their members or by working with specific departments to improve the services the organization provides, an effective ERG will be able to make change happen.  

Benefits for employers 

• Support for DEI goals. Almost all businesses have stated goals for diversity and representation and ERGs are often seen as a tool to reach these targets. This is usually the most explicit goal stated by employers when they are asked about their goals for ERG projects, before more general hopes for employee engagement and satisfaction. According to the Salesforce & ACCP study referenced below, this is also the area in which they see the most success. 
• Employee retention. ERGs can be deployed to increase employee retention throughout the company. This doesn’t exclusively mean employees that fall into specific minority groups, but also for more general categories that may benefit from being connected into a community, such as parents, veterans, and young professionals. A survey conducted by Salesforce and ACCP in 2021 showed that 75% believe that ERGs successfully support their company’s retention efforts. 
• Employer Branding and recruiting. Recruiting is something many ERGs have an active interest in, and it’s something that is often listed as a KPI for BRGs. A survey conducted by Salesforce and ACCP in 2021 showed that 55% of Corporate Social Responsibility and HR respondents believe that ERGs improve the recruiting and hiring process. By highlighting ERGs and including their members in Employer Branding initiatives, organizations can signal their inclusivity and that they are accepting places to work for members of all communities. 
• Inspire innovation. By allowing ERGs to give feedback, organizations can uncover new business opportunities that directly impact both their reputation and their bottom line. For example, Fidelity Investments LGBTA+ group trained financial representatives to improve how they serve LGBT customers with estate planning products. This allowed them to provide a higher level of service and improve performance with a previously overlooked market. Meanwhile, at Deutsche Bank, the Neurodiversity ERG worked with specific departments, such as Anti-Financial Crime, to ensure better inclusion for neurodiverse customers. 
• Foundation for big company changes. ERGs can be a useful tool when it comes to major changes, if they are deployed correctly. For example, during Mergers and Acquisitions, ERGs can make it easier to introduce new employees to a larger corporate structure and get them embedded in the areas of the company culture they’ll feel most at home. You can also create ERGs based on long-term strategic projects, like reaching Net Zero or launching into new markets. 

The impact of ineffective ERGs 

A study by McKinsey in 2022 showed that ineffective ERGs can be detrimental to the wellbeing of their members. While employees in effective ERGs are more likely to report higher inclusion scores than those who don’t participate in ERGs at all (83 vs 75), those in ineffective ERGs report much lower inclusion scores (59) overall.  

This adds an element of risk to a company’s ERG strategy: it is better not to launch ERGs at all unless you and your senior management team are committed to making them a success.

But what causes an Employee Resource Group to be ineffective and how can you avoid it?  

• Different level of management buy-in. Make sure to treat your ERGs equitably. Base resources and support on a transparent factor, such as membership numbers or event attendance. There have been some cases where ERG members have discovered that their group is being treated differently to another ERG, for example because one group has a member that is a senior leader, while another does not have any members above middle management. Be aware that any unfairness may be seen as discriminatory. 
• Loosely defined goals and minimal practical support to reach them. Sometimes, senior management don’t explicitly tell an ERG’s leaders what they imagine success to look like, and members can envision success quite differently. When it then comes to discussions about budget and resource allocation, the two sides can find themselves speaking at cross-purposes. Whatever the goals of the group, whether it’s increasing membership, having high participation in events, or aiding in other goals like recruiting, they should be clearly defined and communicated at the outset. 
• Too much burden on ERG leaders. Many leaders of Employee Resource Groups take on the role as volunteers out of personal motivation or a sense of community. However, it can add a lot of mental and emotional work to their weeks. A complete lack of recognition can cause these team members – who are often some of the most engaged in an organization – to feel unseen and unvalued. There are a number of ways to recognize ERG leaders, so make sure to find a strategy that works for your organization and rewards leaders in a meaningful way. 
• No path to effective listening and change. In the survey conducted by the ACCP and Salesforce, referenced above, while 53% of ERGs served as internal focus groups for HR, only 24% of ERGs were reported to influence business strategy and product development actively. This can give the impression that ERGs are created to pacify minority groups, and that business leaders will proceed as usual, whatever feedback they receive from group members. When members of an ERG step up to give management tough feedback, try to implement the changes they need, or at least be transparent about why it isn’t possible for the organization right now. 

Examples of Employee Resource Groups 

Those who are new to the world of Affinity Groups or ERGs might be wondering, what kinds of ERGs exist? Which ERGs are most popular? 

One great example is German company Zalando, which trades across Europe and has an extremely diverse workforce. On their website’s career page they list 12 Employee Resource Groups: 

• Neurodiversity 
• Asia Pacific Community Circle 
• Black Employee Connection
• Jewish Community & Friends
• LGBTQI+
• Mental Wellbeing Community
• Muslim Community Network
• Women in Finance
• Women in Tech
• Women’s Network
• Zalando Parents Gro

Other common ERGs include Veterans groups, multicultural or interfaith groups, and groups focused on sustainability and green action.  

How many ERGs should an organization have?  

Within the DiversityInc Top 50, a list of the top-performing US companies for DEI, companies tend to have around 10 groups. However, there are different models available. In 2023, MentorcliQ attempted to count the exact number of Target’s ERGs, arriving at a huge total of 108. While they are a statistical outlier, it does suggest that a self-service model in a large organization might see massive uptake.  

For example, Amtrak started ERGs in 2021, but within 2 years 8% of their workforce were participating in at least one ERG. That’s several thousand employees across the US, concentrated in only 8 groups. 

The number and size of ERGs will likely reflect the size of your organization and the diversity of your employees. There’s no right or wrong answer here, but you probably shouldn’t overextend your offering too quickly without making sure that the process to set up a new ERG is running smoothly. 

How to set up and support ERGs 

So, we know that effective ERGs are a huge benefit, while ineffective ERGs can do more harm than good. But how can you ensure that your Employee Resource Groups achieve their goals and don’t damage morale? 

Here are some steps you can take when starting or restructuring the ERG process in your organization: 

Invite proposals and create an ongoing process to submit proposals
Create a guide for employees about how to propose an ERG. Their proposal should include the level of interest they predict, the kind of events and initiatives they want to run, what kinds of business goals they will be able to support with their efforts, and an estimate of the budget they’d need. 

They should also apply with at least a handful of the leadership team tentatively selected and a member of senior management who has agreed to be a sponsor. 

Incentivize participation in and leadership of ERGs
Many companies offer financial bonuses for ERG leaders to recognize that they go above and beyond their original job descriptions. Additional professional development can also be offered with a focus on retaining ERG leaders, who are in many ways primed to become business leaders of the future. At the very least, ERG leaders should be allowed to ringfence some number of hours per week or month to focus on their work with the group. 

Provide space for ERGs to market themselves 
Whether you have an internal comms team or not, you should support ERGs with internal communication. Set up a structure where information about Employee Resource Groups can always be found – like on an intranet or within the onboarding process for new hires. Then, create spaces where news and event invitations can be shared – whether in an internal newsletter, all-hands meetings, or even in print flyers and posters if appropriate.  

If you have multiple ERGs, then it’s essential that all groups are treated equally and have the same opportunities to share their events and successes. 

Fairly divide budgets and access to resources  
When discussing fairness, it’s important to keep track of the different resources each ERG is allocated over the year. This can be an obvious resource, like budget or event space, but it can also be smaller things, like the number of events each is allowed to run, the amount of internal marketing space allocated to each group, or which ones get the most mentions from the CEO. 

 Some of these smaller differences can lead to big resentment, so it’s worth trying to keep an eye on formal and informal resource allocation before arguments start.

Arrange regular reviews together with senior management and HR
The channels of communication between ERGs and the organization’s leadership should always be open, but it’s useful to set up regular, more formal, opportunities to speak to ERG leaders. In individual sessions, you can establish what is working and what isn’t, and whether the group is on track to meet any targets you set. They can also be an opportunity for feedback to flow back to the top about how members are feeling about a number of topics: about company decisions, about events happening in the world, and how they would like the organization to respond.  

You can also set up a DEI council, where multiple ERG leaders sit down with senior executives at the same time to ask them the questions their members have.  

Track and reward results 
If your strategy involves BRGs, then you likely have set hard goals for your employee networks to reach, from recruiting to retention. For ERGs, these goals might be less business-oriented, but there may still be KPIs relating to membership and number of events or initiatives led by the group. When these goals are met, make sure the rewards are fair, and the recognition is public. Other employees should know that your Employee Resource Groups are having a positive impact. 

Executive sponsors  
Each ERG should have someone senior to support it directly, even if they aren’t a member of the community it supports. Give incentives to senior leaders to take on these roles and clearly define what that involvement entails. This can include meeting attendance, mentoring for ERG leaders, and representing the ERG’s interests at relevant board meetings. Allow the ERG members to feedback at least annually on how they feel this relationship is working. 

Enable opportunities for intersectionality
A topic might not just be tackled by one group, but there may be chances to collaborate to make an event or a project more inclusive and high-profile. For example, different groups might want to come together to help an LGBT+ group celebrate Pride month, and the resulting celebration might be more diverse and accessible thanks to their input. 

Encourage different routes to participation
Understand, particularly for large enterprises, that participation might look different for different groups of employees. Find ways to include warehouse and factory staff or staff that are often on the road – whether that’s holding events at shift change, virtually to include remote employees, or multiple times a day to enable as many people as possible to take part. 

Make ERGs the focus of your employer branding
When including ERGs in employer branding, consider making their leaders and members as visible as possible. Video testimonials about their impact on the business, and the business’s impact on them personally are both good for recruiting goals and help the ERG gain recognition internally. This public investment and acknowledgment also ensure that ERG members feel recognized and valued by the organization’s leaders. 

Growing ERGs with Mystery Minds 

Whether you’re just starting out with Employee Resource Groups or you have some longstanding programs already, we can help your groups reach the next level. 

At Mystery Minds, we’ve collaborated with several companies on their ERG programs. Our solution helps Employee Resource Groups connect on a regular basis, across business units, regions, and management levels.  

Within one platform, you can host several communities which can either be open to all employees or invite-only, depending on what makes sense for each. Community managers can provide relevant icebreakers or prompts for conversations, making it possible to engage in problem-solving, mentoring, or simply community building. 

Bringing employees together: Mystery Minds matches employees within or between ERGs for meetings and creates connections that would otherwise not exist.

Strengthening corporate culture: The solution promotes employee engagement and knowledge exchange beyond their daily routines.

Building employee communities: Creating social networks that ERG members can access at any time within the solution.

Career development: ERG members come into contact with different hierarchy levels through mystery meetings, where they can access advice and support for their careers.

If Mystery Minds’ solution for ERGs sounds interesting to you, then reach out today!