Participation in employee resource groups is booming

Long a staple of diversity, equity and inclusion initiatives, employee resource groups give both front-line employees and management a sense of community in the face of adversity. A number of banks have used ERGs to help employees come to grips with pandemic fears, contemplate how to respond to racial injustice and understand the impact an economy in shock is having on both bank employees and the people they serve.

Consultants and company diversity officials applaud ERGs for providing employees – women, African American, Hispanic, LGBTQ or members of other groups – with a safe haven. ERG members can air out their feelings, lift one another up and brainstorm ways to raise issues with management. In some cases, groups can even invite outside speakers to facilitate discussions for the group or for a broader, company-wide audience.

ERGs also give companies and executives a way to absorb the impact of multiple crises on both employees and neglected or marginalized communities, and then respond in a thoughtful and appropriate way.

For example, as protests over the killing of George Floyd gripped the nation, members of an African-American ERG at Fifth Third Bank facilitated a series of initial discussions that paved the way for broader gatherings and a panel in which 550 employees participated to express views on civil unrest and discuss ways they thought Fifth Third could react. At U.S. Bank, a women’s ERG hosted a conference call on how to manage last fall’s school restart and balance work and life that attracted more than 3,000 listeners.

Employees are taking notice of ERGs as a place for community and inclusion. A survey by the research group WerkLabs and The Mom Project, a professional women’s advocacy nonprofit, found that 84 percent of respondents were interested in joining an ERG and that two-thirds thought an ERG would improve inclusivity at their organization.

Companies that want to join the trend will find that there is no one-size-fits-all template to follow. DEI consultants like Tanya Odom say tailoring an ERG program to fit an organization’s needs has to take into account a wide array of factors, including a company’s geographic location as well as external and internal demographics.

In terms of best practices, management buy-in and participation are key. Diversity consultant Cheryl Fells says, “Teaming ERGs with members of the C-suite or executive teams forges a greater sense of partnership and helps link them to an organization’s agenda.”

At the same time, companies need to temper their expectations. Often, that means viewing ERGs as facilitators rather than problem solvers. “A common misconception companies make is to strap ERGs with the responsibility of generating solutions,” says Bradlee Benn, a diversity consultant with Russell Reynolds Associates. “That’s unfair. ERGs are there to help create a safe space and sense of community, one that leadership can tap into to get input as they set strategy.”

Financial resources and compensation are also going to matter in the long run. ERGs and their leaders – most of whom hold down a full-time job in addition to spending upwards of 10 hours a week on the group’s work – have been stretched to the limit. Diversity consultants say companies will have to enhance budgets set aside for ERG programs and find additional ways to compensate employee leaders.

“The corporate-level resources ERGs get is perhaps the number-one obstacle to how effective they can be,” says Dr. Pamela Cohen of WerkLabs, who reports that many affinity groups at large corporations are allotted no more than $5,000 a year. Odom says Twitter’s decision to pay its ERG leads may be a game changer. “It says a lot about how highly the company values the role ERGs play, particularly in a time of reckoning like this year.”

Consultants say ERGs are going to play an increasingly important role as the nation’s population becomes more diverse and that these groups can serve as incubators for future managers and organization leaders.

“My hope is that companies start to acknowledge what the heads of ERGs are doing and that they view this as an effective source of leadership development,” says Odom. “The role of running organizations like these makes you a change agent, a leader. The expertise and responsibilities involved translate into a formidable set of skills.”

James A. Anderson is a freelance financial writer whose work has appeared in Barron’s magazine, Black Enterprise and other publications.