How ERG programs are expanding, and what they need to thrive

ERGs have more resources than ever, but experts say that support from the top is still the key to success.
article cover

Photo Illustration: Dianna “Mick” McDougall, Sources: Getty Images

5 min read

Employee resource groups (ERGs) are like the cliques of North Shore High School—only in the broadest sense, and minus the Plastics, of course. There’s one for everyone, and senior leadership would do well to pay them more attention (trust falls not required).

ERGs have grown increasingly popular in recent years: An estimated 40% of employers report having had ERGs in 2021, up 9% from 2020, according to Sequoia. The surge was driven in part by employers wanting to connect disparate workers during Covid-19 and to increase DE&I efforts during the racial reckoning following the murder of George Floyd. It has resulted in the emergence of a new role: ERG program director.

As ERGs have proliferated, employers, including Salesforce, Netflix, and Betterment, have employed ERG program directors whose sole focus is to advance ERG efforts. But for their programs to be successful, ERG experts told HR Brew that directors still need buy-in from senior leadership.

Shifting roles. ERGs have been around since the 1970s, but their role has shifted, according to Farzana Nayani, a DE&I consultant and author of The Power of Employee Resource Groups. They used to be formed by employees, “for social reasons,” Nayani said, without much budget or support from senior leadership. Eventually, program leaders emerged and were incorporated into the HR function, or under the umbrella of learning and development, explained Cecilia Persson-Ramos, a DE&I ERG leader at Intuit, “But it was never someone’s-full time job to actually manage [them].”

The expansion of DE&I efforts and investment in more structured ERG programs in recent years has led to program directors getting their own titles and full-time job descriptions: Many now oversee upwards of 10 ERGs with multiple chapters.

Without clear oversight for ERG programs, Persson-Ramos said, companies could be missing out on the opportunities for ERGs to play a bigger role in shaping employee experience and education. For example, nearly 25% of Intuit’s 15,000 employees are ERG members. “There was both a tremendous opportunity and there was also some risk involved with not having someone who could dedicate the time and energy to support, elevate, and provide management to ERG leaders.”

Beyond that, “there’s also the business case around the ERGs” explained Nayani, especially as employees have become disillusioned with work amid the Great Resignation. Some 75% of companies that responded to a 2021 Salesforce survey said their ERGs have helped with employee retention, and 55% said they’ve helped them recruit and hire. Furthermore, the majority of respondents said ERGs have helped overall employee well-being. “ERGs now are the ones that actually help employees navigate the difficult issues outside of work, too,” Nayani said.

Quick-to-read HR news & insights

From recruiting and retention to company culture and the latest in HR tech, HR Brew delivers up-to-date industry news and tips to help HR pros stay nimble in today’s fast-changing business environment.

Long-term success. Nayani explained that programs should be “an organizational objective, with goals and values associated with that support.” As programs grow, “an explicit commitment from senior leaders” is critical to success, Persson-Ramos said.

The reporting structure of an ERG program should ultimately lead to the CEO, Nayani said, and high-level leaders should sponsor individual ERGs. And the more participation ERGs have, the more opportunities there will be to connect individuals who wouldn’t typically cross paths, thus creating a deeper sense of community.

One of the hurdles program directors face is understanding and communicating the business value of ERGs. “I think people are hesitant as to how to assign data and numbers to the work that’s happening in the space,” Anisha Nandi, founder and CEO of Verbate, a startup focused on helping companies grow their ERG programs, said. “Things like engagement and retention and tying that to ERG work and showing the data [and] the numbers [prove] this work is real work that’s helped our business.”

Ramos recommended examining ERG activity and participation. “That probably is a good indication that whatever [leaders are] offering is meaningful to those employees.”

Looking ahead. Nandi said companies should look ahead to what she calls an “ERG 2.0” strategy, in which ERGs are wrapped into larger business functions. Intuit, for example, mentions diversity and ERGs during the recruitment process and then reminds new hires of the groups that are available to them in an effort to keep them engaged. “How can [employers] continue to put these communities more and more at the center of a company’s culture and strategy, whether it’s helping with recruiting or product or policy?” Nandi asked.

But to get there, ERG program directors, leaders, and members need support, Nandi emphasized, especially since most are part of marginalized communities. “It’s tough work. It’s emotional work. It’s real work. It’s so important, but there’s not a lot of support to actually help the people in seats that are doing it.”—KP

Do you work in HR or have information about your HR department we should know? Email [email protected] or DM @Kris10Parisi on Twitter. For completely confidential conversations, ask Kristen for her number on Signal.

Quick-to-read HR news & insights

From recruiting and retention to company culture and the latest in HR tech, HR Brew delivers up-to-date industry news and tips to help HR pros stay nimble in today’s fast-changing business environment.