Employee Resource Groups are employee identity or experience-based groups that focus on creating community and belonging for employees. According to a 2017 report by TopMBA, 90% of Fortune 500 companies have ERGs, and this number is likely even higher following the summer of 2020.
ERGs are most often centered on bringing together a group of people with shared gender identities, sexual orientations, race/ethnicities, interests, backgrounds, and/or perspectives. Different companies use different naming conventions for their ERGs - Communities, Affinity Groups, Business Resource Groups, Network Groups, etc. Generally speaking, the groups are volunteer-led (although some companies have elected to pay ERG leads; more on this later in the toolkit), and they focus on creating safe spaces for members and supporting business functions.
Employee resource groups are great tools for fostering inclusion for employees from underrepresented communities, but they can be so much more. ERGs are at their best when they are business resources that support every department of a company.
Here are some of the business benefits of employee resource groups:
This one should be obvious, but it isn’t always framed this way for companies. One of the primary objectives for ERGs is to foster inclusion for (often underrepresented) employees. If employees have a sense of community and belonging at work, they are more likely to remain at a company. If you don’t pitch your ERG as a tool to retain talented employees, your leadership might have a hard time understanding why some budget should be allocated to the group.
Additionally, according to Stories from the Chezie community, professional development is a huge priority for diverse job-seekers. ERGs often focus on creating professional development opportunities for members in the form of training, workshops, and mentorship. If your ERG can help members achieve their career goals, you’re more likely to keep the talent you have.
The number one concern for companies right now is figuring out how to get more diverse talent into the organization (we believe the first priority should actually be on retaining the talent companies already have, but that’s a separate conversation). ERGs can be great ways to source diverse talent that your company would normally not have access to.
Many companies have set up employee referral programs through their ERGs to help bolster diversity recruiting. Some additional ideas are to let your ERGs host social events for people outside of your organization, and ask your members to invite colleagues or friends to that event. This gives you an opportunity to network with highly-qualified people and introduce them to your company’s culture in a casual setting.
A 2013 study by Theresa M. Welbourne, PhD, showed that employees that participate in ERGs have higher energy levels than those that don’t. Dr. Welbourne describes employee energy as “the internal force one has to move forward and achieve goals at work.”
Read that again.
Employees that participate in ERGs are more likely to achieve work goals. That should be the end of discussion. ERGs literally help a company’s workforce be more productive. In business words, more productivity means having a sales team that surpasses its quota or an engineering team that fixes bugs at a faster rate. ERGs = increased productivity = better business results.
There have been plenty of news stories about companies putting out offensive products or marketing campaigns - see this article on H&M, or this article on a world built for men. ERGs can help companies avoid biased products by supporting their product development team to make sure that the goods or services your company sells attract people from all identities. Here are some real-life examples that we’ve gathered from employers that we’ve spoken with and our own research:
As your ERGs become more closely tied to the goals of your company, it becomes much easier to ask for additional budget, resources, and/or attention. Employee resource groups can be incredible communities for people of shared identities and backgrounds, but they can also be incredible business assets.
Do it yourself! Use our Worksheet for Establishing an ERG.
Since ERGs are almost always employee-led, they can be launched by anyone in your organization. Typically, there are informal communities within companies that want to transition into more formal employee resource groups. For example, your LGBTQ or Black employees likely already have a Slack channel that they use as a safe space to vent and help each other advance at your company. Whether you already have these informal communities in place and you want to formalize them, or whether you’re starting your group from scratch, here are six steps to launch your ERG.
The mission and goals of your ERG should be created in collaboration with employees that are interested in joining. The mission guides the group’s initiatives and campaigns throughout the year. Collectively, your group’s goals should represent your company and your group’s common interests.
While the mission articulates the purpose for which the group was created (i.e. creating an inclusive environment for Latinx employees, or raising awareness of LGBTQ+ social issues), the goals should outline specific activities and timelines.
Consider the following questions when setting the mission and goals:
Executive sponsorship is crucial to the success of ERGs. To gain buy-in, find executives or C-suite sponsors who have demonstrated commitments to DEI. Ideally, although not required, these executives will identify with the group they are sponsoring.
When asking an executive to sponsor your ERG, approach them with talking points and data that showcases how ERGs will positively impact your employees and the organization as a whole. Good thing you just read about the business case for ERGs!
Make sure HR leaders are especially invested, as they will have insight into legal requirements, and authority over budget and promotions for your group.
ERG leaders should make a plan and work with their team to develop outreach strategies and generate interest for their group. Work with your contact in HR to make sure you are communicating with all potential employee participants.
Consider developing marketing assets to introduce the group. These can be digital assets like email newsletters, or physical swag like t-shirts. Work with the marketing team to identify any brand restrictions.
Additionally, promote your ERG in multiple channels such as:
Another way to attract participants is to network and/or partner with other internal diversity groups (culture committees, mentorship programs, etc.) already in place. Try attending some meetings in order to connect with their representatives to share ideas, obtain feedback, and build relationships.
With the input of group members and your executive sponsor(s), establish a regular meeting and/or event schedule. Consistency will help drive collaboration and organization across different ERG groups.
Hold meetings at least every quarter for your leadership team. Actively plan the agenda so that time is well spent on topics that are relevant to all participating members. Here are some things to consider when organizing the group’s structure and meeting schedule:
To encourage buy-in from all departments and levels of the organization, it’s important that ERGs align their goals to company objectives.
For example, Pinterest’s Black and Latinx ERGs tied their goals to business objectives when they launched cultural content during the group’s respective heritage months.
Since the primary purpose of ERGs is to cultivate a more inclusive workplace for employees, it makes them perfectly positioned to build a culture of allyship and to foster collaboration across the organization.
Although ERGs bring together people of shared demographic traits, you should encourage participation from employees of all backgrounds within and outside the organization. People can more easily support your community if they’re invited into it. The most effective ERGs get collaboration between and among other groups to take advantage of synergies, encourage transfer of knowledge, and accelerate business objectives.
Here are some ways to leverage relationships with other groups:
With a clear mission and goals, employee resource groups have the potential to be strategic initiatives for companies that significantly contribute to overall success and profitability. With these steps in mind, we hope that your ERG turns into a source of innovation and inspiration for your organization.
Before you kick off your ERGs, it’s important to outline an operating structure for them. We make this comparison a lot, but every other business function has a set operating framework that it follows to achieve success. Product managers might use the Kano model; marketing teams might use the 7 P’s; Sales directors might use value-based customer theory. The same should apply to DEI, and specifically to ERGs.
The 4 C’s framework is an incredibly powerful methodology created by Dr. Robert Rodriguez of DDR Advisors. Standing for Commerce, Community, Culture, and Career, each ‘C’ represents a different pillar of an ERG’s overall strategy. This framework can be used to help outline your ERG goals and tell the story of the impact your groups are having. According to Diversity Best Practices, over 200 corporations, including Allstate, TJX Corporation, and Comcast/NBCUniversal utilize the 4 C’s model to structure their ERGs.
Commerce - making a business impact for your company.
The same Diversity Best Practices article highlights that, although none of the 4 C’s is more important than the other, performing low on the Commerce pillar has a more negative impact on your group than low performance for the other C’s. Remember, at their best, ERGs are business resources. If you can support your company’s core business functions, your visibility throughout the organization is higher and it’s much easier for you to make the case for additional budget and/or resources.
Career - making an impact on the careers of your members.
According to DDR Advisors, “when companies score high on their Career related questions, it is more likely that they will be able to maintain or improve the scores in the other three areas.” Your group should be focused on advancing the careers of the people that you look to serve within your company. The best way to do this is to talk to your members and figure out what kind of programming they want exposure to. Consider adding the following questions to the signup form for your ERG:
Monitor people’s responses to these questions via your Chezie Dashboard (or whatever method that you use to track signups) and use the responses to guide your ERG programming.
Community - benefitting the community you serve.
The community pillar is focused on external outreach. If you lead a Black ERG and your company is headquartered in Atlanta, find ways to benefit Black people in the Atlanta area. Get creative! Again, you can always work with your members to brainstorm community-service and community development projects. Ask members if they have any organizations that they would recommend, and if you find a few that align with your company’s values, reach out to them to see how you can support their work.
Culture - raising awareness of social and cultural issues.
One of the primary reasons that people from underrepresented groups need the support of ERGs is because there are often social, cultural, or economic forces that keep these people from achieving their goals. It’s likely that in-group members an ERG are already aware of these forces, so your ERG needs to focus on raising awareness for employees that don’t identify with the group. Create and share content, host book or podcast clubs, or go to a film screening. Use your ERG as a catalyst for change within your company’s walls by providing people with insight that they likely didn’t have before.
Now that we’ve covered the 4 C’s framework and what each pillar means, here are some example initiatives and programs that would fall under each pillar.
One of the foundational challenges to DEI work as a whole is the lack of quality data. It can be difficult for DEI leaders to demonstrate the impact that their work is having because they typically don’t have data to tell the story.
“What gets measured gets managed.”
- Someone really smart
If you’re working on your company’s employee resource groups, it’s absolutely critical that you have established metrics to track the success of your programming and strategy. Having metrics in place can be the difference between your groups getting additional funding for the upcoming fiscal year and your groups getting dissolved entirely.
The question is: what metrics should you track?
Depending on where your ERGs are in their development, some metrics might be easier to gather than others, which is why we’ve broken this up by ERG maturity level. Select the maturity level that most applies to your groups, and continue reading to learn what types of metrics you should be gathering to show how your ERGs are successfully making your company a better place to work.
Groups at the Affinity Group stage are less formal and focused primarily on creating networking opportunities for their members. For earlier-stage groups, this might mean that your group is housed in a Slack channel and that you’re still working on establishing your leadership team.
Here are metrics that companies at the Affinity Group stage should track:
# of events held
Note: we’ll cover how to plan successful ERG events in a later section.
Groups in this phase of the maturity model are further established than their Affinity Group counterparts. They have a set structure, a leadership team, and a regular event schedule. They also support business objectives, although they might not do it regularly.
In addition to the metrics for companies at the Affinity Group stage, here are metrics that companies at the ERG stage should track:
Mentorship program participation
# of community service/corporate social responsibility (CSR) initiatives held
As mentioned earlier in the toolkit, every group should strive to become a business resource. This means that not only is your group providing a community for employees from underrepresented communities at your company, but that you’re also supporting critical business functions that improve the bottom line.
In addition to the metrics for companies at the Affinity Group and ERG stages, here are metrics that companies at the BRG stage should track:
# of feature requests from BRG members
# of leads from BRG member referrals
# of promotions for high-potential mentorship program
Be aware, these metrics are foundational. In other words, there are levels to this. For example, as your groups get more established at your company, you might go from tracking the number of people in each ERG to categorizing members by level within the organization, department/team (i.e. product, sales, marketing), and office. For events, you might start sending feedback surveys to attendees asking them “how likely are you to recommend this event to a colleague?” to gather an NPS score in addition to tracking the number of events held.
Regardless of what stage your ERGs are in, it is imperative that you have metrics associated with your groups. If you can show the impact that your ERGs are having with digestible data, it’s much easier for you to make the case for increased budget or more involvement from leadership.
When it comes to employee resource group leadership roles, none is more important than the overall group Lead. As mentioned above, ERG’s are primarily employee-driven, and it’s important to have people at the helm that are passionate about the success of their communities within your company.
As you identify the goals for your groups, you want to make sure that the people leading your ERGs are capable of executing those goals. You should be looking for ERG leader that have:
Depending on what stage your groups are in, there are a few approaches you can take to choosing an ERG lead:
For groups in the affinity group stage, your best bet for identifying potential ERG leaders is to ask people to volunteer. In most cases, there are informal groups already present at your company that exist in Slack channels. Try to figure out who organized that group from the beginning, and ask if that person would be interested in taking on the role of ERG lead.
If your groups are in the employee resource group phase, asking members for nominations can be a great way to identify leads. People that get nominated are likely already respected in your organization, which means that they should be able to quickly get buy-in from the people they are looking to serve and hopefully get buy-in from company leadership.
Another option for groups in the employee resource group phase and beyond is taking applications for ERG leaders. This approach will work best if there are existing leads that can speak to the experience and benefits that come with being an ERG leader. You want the position to be something that people are excited about taking on, and accepting applications ensures that people are being intentional about the role and its responsibilities. Taking applications also gives you a sense of the type of leader the applicant will be. Do they have a set plan for how they would improve the group? What programs do they plan on implementing? Be sure to include these sorts of questions in your application.
Click here for a sample ERG Lead application.
Finally, consider doing elections for your ERG leads. This is something that more advanced groups - those in the business resource group stage - can opt to utilize because the groups should be relatively large and should have an active member base. Ask candidates to apply first, and then put the top applicants to a vote amongst the members. Ask people why they think the candidate would be a good fit for the role.
Identify a set number of goals that you can judge your ERG lead’s success against (more to come on identifying ERG goals in a later chapter). Consider mandating at least one event per quarter or an annual heritage month celebration for leads to work towards. This helps demonstrate the impact that your ERG leads and the ERGs are having overall, and it clearly articulates what the leads should be working towards.
Also, once you’ve elected an ERG leader, that person does not (and should not) remain in that position in perpetuity. Establish a rotation schedule for other employees to come into the position at your company. This gives you a regular, fresh set of eyes that can review your group’s progress and identify gaps that previous leads might have began to miss.
Finally, encourage your leads to challenge your company and its leaders. For your organization to grow and make true strides towards inclusion and equity, it’s important for your ERG leads to take risks. Encourage your leads to challenge the company status quo by speaking up about antiquated or unfair practices that might be harming the success of their ERG members. Your leaders should have access to company leadership, and it’s important that they use that access for the betterment of their groups.
Being an ERG lead is an opportunity for employees at your company to have a genuine impact on the experiences of people that identify similarly to them. It’s also a great career advancement opportunity. For this reason, it’s critical to the success of your groups that you identify the right person(s) for the job.
This section of the toolkit is based on our November 10th event Money Talks! Planning Your 2022 ERG Budget hosted by Jes Osrow.
Do it yourself! Use our ERG Budget Worksheet.
One of the most commonly asked questions around launching and managing ERGs is "how much budget should I give my groups?" This article will explain why a budget for your groups is important, how to approach identifying your budget, and strategies for determining your budget.
If you have ERGs, then you need to have a budget allocated to them. Much of the programming that your groups will do - events, recruiting partnerships, swag purchases - will require funding. It's important that you equip your groups with the resource they need to achieve their goals.
Acquiring a budget for your ERGs also demonstrates to your Leads that your company is behind them. Being an ERG Lead is already so stressful; if people in that role have to figure out how they're going to pay for the events that they want to put on, you're going to make that job even more difficult. More difficulty for ERG leads = under-performing programs = lower ROI = lower employee retention.
According to a study by DiversityInc, the average budget for employee resource groups is between $7,000 - $15,000 per year, but for large companies, that number can go as high as $75,000 - $100,000 a year.
Let's be honest, though; that's probably not helpful. You need to figure out what stage your ERGs are in, and what your group's goals are before you finalize your group's budgets. The best way to approach it is to figure out what programming you want to accomplish, and estimate how much that programming is going to cost.
Here are some key questions to ask yourself:
A foundational rule of anything that your company does for diversity, equity, and inclusion should be to work backward. Don't try a random set of programs just because you see other companies doing them. Figure out what your employees need, and build your strategy around that.
This same concept applies to your ERGs and your allocated budget. Your leads should work with their members to figure out what they are hoping to get out of joining the group and build their programming around that. See if there are any goals that they can accomplish that require little to no budget.
You want your group Leads to know how you came to these numbers. If they give you a list of six major events that they want to hold throughout the year, and you can only afford four of those events, let them know. Give them reasons why - the overall budget can't handle it, they don't have enough members to warrant that many events, etc. You want to build trust with your Leads as quickly as possible, and being transparent about your approach to budget development is a great way to do that.
Okay, I know we just said not to base your strategy on what you see other groups doing, but hear me out.
If your company already has ERGs, and you're just trying to request a new one, ask the other Leads what a reasonable budget would be. If you're launching your first set of ERGs at your company, then try to talk to other DEI leaders working with companies of similar sizes, industries, and/or geographies about what their budgets look like.
Hmm... if only there was a way for you to connect with ERG Leaders at other companies...
To make sure that your money is being spent appropriately and that members are benefiting from the programming, you'll want to track how the money is being spent.
You should start by tying each expense to a Pillar (i.e. one of the 4 C's). Next, you should categorize your expenses. Here are the categories that we recommend:
Here are three ways to determine your annual budget.
With a lump-sum approach, all ERGs pull from the same pool of money. These funds would likely be owned and managed by the overarching DEI team.
From our research, the per ERG approach is the most commonly used method for determining budget. Each group gets the same amount of money to spend on programming over the course of the year.
This is our favorite approach. With a per-person approach, the budget is based on the size of the group, and each ERG is given a set amount of money for each member. For example, if group A has 100 members and group B has 50 members, and groups are given $100/year/member, then the annual budget for Group A is $10,000, and the budget for Group B is $5,000.
To give you some additional context, here is a sample ERG budget for a Black@Chezie, a 500-person tech company with a leading employee resource group management software (😉).
Community - Black History Month Happy Hour
Culture - Lunch and Learn - Microaggressions - hosted by an external speaker
Career - Stipend for Professional Development Conference
Commerce - Product Review Workshop with Product & Marketing teams
Here's how you'd show the budget for this group:
Now, the above budget assumes that the group doesn't have non-event expenses (t-shirts, recruiting partnerships, donations, etc.) that would require an additional budget, but it should help you visualize and think about what needs to be considered to determine your ERG budget(s).
Determining a budget for your ERGs can be daunting, especially if you've never done it before. However, you can't use that as an excuse. Your ERGs need money to be effective, and if you're smart about how you strategize for your groups, you should be able to give your groups the resources they need.
Only 28% of ERGs compensate their leads, according to a 2021 report by The Rise Journey. Simply put: that number is way too low.
Employee resource groups are often the centerpiece of a company's diversity, equity, and inclusion work. To maximize your group's impact, you should compensate your ERG Leads to keep them incentivized and motivated to continue building your groups. So to help you get to paying your leads, here's a guide to paying your employee resource group leads.
Your Black ERG Leads have taken on this role because they want to help other Black employees navigate their early days at the company. Your Women's ERG Leads took on the role because they want to help more women break into leadership positions.
Most often, these people are selflessly spending extra time on this work because they want to see people that share their identity or affinity succeed at your company. When a crisis hits the community that an ERG Lead serves, that Lead often has to take on the emotional labor and manage the feelings of your employees. You should never ask a marginalized community to solve its own marginalization, but that's exactly what so many companies do by asking their employees to take this work on as unpaid labor. Unless your company is 100% equitable 100% of the time (hint: it's not), your ERG Leads contribute to your company building an equitable culture.
Also, paying your ERG leaders speaks toward your company culture. Your Leads will recognize the support that they have from their company leadership, and compensation is a way to demonstrate that they have that support. It also helps prevent burnout and resentment from doing work that they do not feel is appreciated.
Most likely, you'll need to present the case for paying your ERG leads. To do this, have an idea of how you will actually distribute payment and what forms of compensation you will use. While cash compensation is most ideal, there are several different types of ERG compensation:
Other forms of compensation include mentorship opportunities, gift cards, and cost-related travel.
Though there is a clear and most equitable choice here, at the end of the day, any form of compensation is a step in the right direction.
Okay, now let's address the elephant in the room. How much should you pay your Leads?
We wish that there was one magic solution for this, but the answer really depends on your organization. If this is something that's new to your company, your goal should be to get some form of monetary compensation into the system. Take what you can get.
If you want some help determining a number to ask for, The Rise Journey recommends starting with a basic formula:
For a lead that puts in five hours of work per week, that comes out to $3900 per year. From there you can determine how the money is actually paid (quarterly, annually, etc.) and which Leads receive the compensation - is it only the chairs? Or do those leading individual committees also receive payment?
Using this formula, it should be much easier to determine how much money to ask for. It's important to remember, though, that $15/hour should be the absolute minimum you compensate your leads.
As you work to determine your compensation, here are some additional considerations:
Paying your ERG leads is the right thing to do. These employees are adding these ERG-related responsibilities to what is likely already a long list, and they deserve to be paid for what has been, until recently, unpaid labor.