Employee Resource Groups (ERGs) are at a crossroads. As the field of I&D evolves, many organizations have concerns that ERGs are not fully resolving increasingly complex I&D problems, not entirely fulfilling progressively compelling I&D opportunities, and not providing a high return on time and money invested in them. When ERG strategies and results are suboptimal, you have a responsibility to build upon historical insights and practices to design customized approaches that can efficiently deliver better results. Understanding ERG history, prevailing assumptions, and traditional practices is the first step toward elevating your contemporary ERG strategy and outcomes.
Employee Resource Groups* are groups of employees who join together in their workplace based on identification with others similar to themselves and/or shared characteristics of life experiences. In the past, ERGs have traditionally been focused on underrepresented groups that maybe identified by: race, ethnicity, gender, age, sexual orientation, working parents, disability, veterans, etc. However, ERGs are expanding to “interest-based” groups that are intentionally inclusive, multicultural and multigenerational and gathered around particular activities such as environmental advocacy, community service and volunteerism, workplace wellness, family caregiving, etc. In most organizations, membership is voluntary and open to all of the organization’s employees.
ERGs actively engage around a unifying mission generally based on providing support, personal connections and affiliation for its members and with the organization. The major focus of most ERGs has been on enhancing career development, and contributing to personal development in the work environment. However, according to research by Mercer, we currently see some differences in the activities of ERGs depending on the enterprise’s primary industry category. Generally, consumer companies are more likely to engage ERGs in developing and marketing products, while ERGs in business-to-business organizations tend to concentrate their efforts more on talent and internal diversity and inclusion concerns. In addition to supporting career development and visibility of their members, the current trend is for ERGs to contribute in some way to the success of the business.
Many companies view ERGs as vital to their brand, marketplace impact, community impact, and diversity and inclusion strategy and, as such, ERGs receive a great deal of support from the diversity and human resources departments. But for continued success, these groups are going to need additional attention, strategic support, and funding from within the lines of business or among the business leaders within different geographic regions.
The ERG Journey
1970s – Employee Caucuses: Xerox is credited with launching the first ERG that began as race-based employee forums created in response to racial tension in the 1960s. Joseph Wilson, the CEO of the Xerox Corporation, took action after the violent race riots in Rochester, New York in 1964. Along with some of his black employees, he formed the first caucus group in order to address the issue of discrimination and to help create a fair corporate environment. Xerox launched the National Black Employees Caucus in 1970 and a decade later followed with the formation of the Black Women’s Leadership Caucus (BWLC). Other groups emerged from the Bell System in the mid-70s such as Mountain Bell’s Black Management Association (BMA) and Women in Management. The impetus for their evolvement was that AT&T and the Bell System became a party to the largest Affirmative Action case in the history of the US. The resulting Affirmative Action Consent Decree of 1973 required progress in promoting women and minorities for each of the next five years. This was an exciting time of hope. In 1978, the Consent Decree ended and many minorities and women did not want to see a stop to the progress that had been made. It took courage and persistence to establish a win-win partnership with Senior Management. Affinity groups were seen as threatening and risky political tactics for advocating for equal pay and opportunity. It was also common for early members to feel nervous about speaking up to management about their minority status for fear of seeming like a troublemaker or having a self-serving individualistic mind-set.
1980s- Employee Associations: ERGs are no longer seen as threatening by managers, but are grassroots oriented and not fully initiated by administrators. Employee Associations continue to create support among employees who are from the same demographic group and assist with compliance and U.S. Affirmative Action initiatives and goals.
1990s – Affinity Groups: Groups are still voluntary but now starting to be initiated by administrators. They are focused on recruitment and retention, offer employee development opportunities, create networking opportunities, and provide avenues for community engagement in target market segments.
2000 – Employee Networks: Employee Networks continue their support with recruiting and retention, create corporate visibility and communication efforts, and align themselves with executive membership and sponsorship.
2010 – Employee Resource Groups: Employee Resource Groups (ERGs)/Business Resource Groups (BRGs) are increasingly focused on the business strategy, becoming more international, engage “high potentials” as leaders within their group, provide leadership and professional development, foster awareness, respect, and inclusion within the workplace, and participate in virtual venues.
Today – ERGs are in a period of redefinition: Leading ERGs have become more strategic and sophisticated. Many are also making a larger impact on organizations as their scope and appeal broaden. But, some ERGs have prospered while others have floundered. Some companies are forming new and unexpected ERGs (e.g., groups for introverts, non-drinkers group in an alcohol-industry company, etc.). Some organizations are creating more opportunities for ERGs to collaborate and cross-fertilize for common goals. Other companies, such as Deloitte, are shifting away from ERGs while still others, such as Disney Imagineering and Aerotek, have made a strategic decision not to initiate ERGs.
In this period of redefinition, letting go of familiar ways of work (while holding on to vital goals, objectives, and aspirations) opens up the path to new approaches and drives the creation of promising new practices with potential to outperform the best of what exists today. You also have the possibility of freeing up resources that are currently tied up in initiatives that might be generating a disappointingly low return on investment.
Even more, you would have the opportunity to let go of the practices in our field that are common but might not achieve your critical goals, and in some cases, could unintentionally be doing as much damage as good. Looking at Employee Resource Groups (ERGs) as a specific example, thoughtfully consider questions such as:
As a thought experiment, can we reimagine I&D without ERGs? Where would we redirect resources currently tied up in ERGs? What innovative approaches would we design to create new value?
Benefitting from the thought experiment of banning current approaches does not require you to actually discontinue best practices when critical examination determines that they truly are:
However, when current approaches are not leading to necessary outcomes and you aspire to do more, consider letting go of your current approaches. By inventing a blank slate, you have the opportunity to creatively design new and customized approaches with potential to deliver more meaningful results with a higher return. Adapted from Ban Your D&I Initiatives, Rebekah Steele, Human Capital Exchange, Nov 2015.
It is important now to look at how external trends impact these internal groups. According to Andres Tapia and Robert Rodriguez 2012 article entitled “Next Generation Employee Resource Groups: Bold, Business-Centric and Still a Blast” in Diversity Best Practices, ERGs of the future must establish a global presence, cultivate a destination for leaders, drive commerce, assess their performance, and address multidimensional identities in order to reap the benefits of strong, vibrant ERGs. Diversity Best Practices also offers suggestions for new ways of thinking and operating. These may be counter to long-cherished notions of what makes ERGs tick, but they recommend principles for ERGs to consider as they navigate potential ways to effectively deal with the changing landscape of contemporary global business.
Next Generation Employee Resource Groups: Business-Centric
I. Establishing a global presence
Based on Mercer’s 2012 research, regardless of headquarters location, companies are still most likely to have ERGs in their U.S. operations. This is beginning to change, especially with regard to women’s groups, which are now fairly common in the EU and becoming more so in Latin America, the Asia-Pacific region, and Australia/New Zealand. LGBT, Multicultural, and disability groups are also well represented in Europe and also beginning to show up in other regions.
The challenge of making ERGs relevant around the world is the diversity around the world. Issues in countries that are dissimilar to those in the U.S. or Western Europe such as unique ethnic groups, tribal groups, generational and religious differences, socio-economic status differences, as well as growing differences in experience, perspective, and beliefs also impact employee and client interactions. However, the driver of establishing ERGs is the organizational goal of the company. The organizational goal in most global companies is to create an inclusive and respectful workplace with a global workforce that is competent to work effectively with an even more diverse set of colleagues and clients. Based on that general goal, the suggested new approach to establishing a global presence is to find the truly global links while also making ERGs relevant on a hyper-local level.
For example, Microsoft chose to make a distinction between ERGs that are global in nature and those that are country-specific (called “network groups”). Here’s how the company describes the global ERGs on their web site:
“The employee resource groups represent constituencies that are collectively global. They work in areas that align closely with Microsoft’s global diversity strategy, which includes efforts to advance representation, inclusion, and market innovation.”
Microsoft’s global seven (7) ERGs include:
• Gay, Lesbian, Bisexual, and Transgender
These ERGs are positioned to find the transnational challenges and opportunities that groups face. For example, the experiences of African American, Afro Caribbean, and African peoples can be very different from each other; however, being Black in today’s global world carries similarities in types of experiences of marginalization and opportunity.
In contrast, Microsoft’s local network groups, found in different parts of the world, are described as representing:
“a variety of constituencies, including those based on national heritage, ethnicity, and family role. They support the company’s diversity strategy through more focused scopes of action. While Employee Resource Groups are more globally oriented, Employee Networks are more country specific.” – Microsoft web site
By comparison, this list of forty (40) sited on Microsoft’s website is quite extensive and specific:
• Africans at Microsoft
• Arabs at Microsoft
• Attention Deficit Disorder at Microsoft
• Bangladshi Employees at Microsoft
• Blacks at Microsoft
• Boomers at Microsoft
• Brazilians at Microsoft
• Chinese Employees at Microsoft
• Dads at Microsoft
• Ex Yugoslavians at Microsoft
• Filipinos at Microsoft
• Friends of Japanese at Microsoft
• Hellenes at Microsoft
• Hong Kong Employees at Microsoft
• Huddle (Deaf/Hard of Hearing)
• Indian Employees at Microsoft
• Israelis at Microsoft
• Koreans at Microsoft
• Malaysians at Microsoft
• Microsoft Adoption
• Microsoft Asian Professional Society
• Microsoft Nepali
• Military Reservists at Microsoft
• Native Americans at Microsoft
• New Zealanders & Australians in U.S.
• Pakistanis at Microsoft
• Persians at Microsoft
• Portuguese at Microsoft
• Romanians at Microsoft
• Russian-Speaking Community
• Singaporeans at Microsoft
• Single Parents at Microsoft
• Taiwanese Microsoft Employees
• Thais at Microsoft
• Turks at Microsoft
• Ukrainians at Microsoft
• U.S. Military Veterans at Microsoft
• Vietnamese at Microsoft
• Visually Impaired Persons at Microsoft
• Working Parents at Microsoft
Going global will also open up additional unexpected dimensions that people are passionate about and that have universal appeal. For example, Deloitte has historically offered the Deloitte Global Athlete’s Network which aims to connect people “who are involved in and passionate about the top echelons of sport” including high-level coaches, elite athletes, and those involved in organizing major sporting events or training camps. So far the network covers 28 countries and 24 Olympic sports.
Based on Diversity Best Practices global benchmarking, “it is still difficult to find ERGs that address the socio-economic inequalities that persist in emerging and developing countries. These inequities are growing wider in developed nations that had, for a generation, boasted a narrowing of the income gap. The middle class in these countries has been eroded through the current Great Recession. Socio-economic issues get tangentially addressed through ERGs of traditionally underrepresented or marginalized ethnic, racial, or faith groups.”
We cannot deny that the successful ERGs are also business relevant. Therefore, rather than solely relying on help from the typical ERG supporters (executives, the diversity and inclusion office, and those philosophically driven by social justice), next generation ERGs must gain converts from among the very differently minded. This requires that ERGs become more and more explicitly relevant to the business, so much so that senior executives will feel the business can’t live without them. And they must do so in ways that speak both to growing globally and locally.
II. Cultivating a Destination for Leaders
The challenge of attracting experienced leaders to ERGs can be overcome when ERGs become more business relevant. Because ERGs are growing in sophistication, becoming more global, and are being tasked with stronger alignment with business, corporate social responsibility and marketplace goals, ERGs need an influx of top talent more than ever. But when you look at most ERG membership rosters, you will find titles of employees who are mostly individual contributors and specialists. Occasionally, you’ll see a member who is a manager or director. ERGs that support women’s initiatives seem to be the most effective in attracting senior leaders. Often, employees at the director level and above don’t see the relevancy in ERG membership. Creating ERGs that will attract senior-level members who have stronger leadership capabilities and possess the ability to build teams and implement a strategy has the potential to elevate the impact of ERGs in ways that benefit members at all levels. One potential focus for the future can be to turn ERGs into a destination place for seasoned leaders looking for growth experiences in diversity and inclusion. This can support development aligned with a growing realization that effective contemporary leaders, in an increasingly multicultural and global world, need firsthand experience with managing diversity in a savvy and effective way.
Three suggestions from Diversity Best Practices that can better engage senior leaders in ERGs:
1. Integrate ERG leadership roles as growth opportunities linked to the organization’s talent management review process. In this approach, ERG leaders come only from the internal talent pool of individuals already identified as high-performing or high-potential leaders in the company, and the corporation understands that ERG leadership roles are development opportunities that require highly skilled individuals. (Influence, working across organizational boundaries, and shaping and operationalizing strategies are examples of core leadership competencies that can be developed or bolstered in an ERG leadership role.)
2. Leverage the influence of ERG executive sponsors by clarifying their responsibility to promote ERG leadership roles to top talent. This contributes to the role of executive sponsors to ensure that the ERGs serve as a means to identify, assess, and develop future leaders. Systematically bringing more senior leaders into the ERG ensures leadership who already have the skills, savvy, and political capital necessary to make things happen within the organization help to drive success. This also acts as a magnet for other top performers to participate.
3. Create a close alignment between ERGs and the organization’s learning and development department with skills to identify, deliver, and evaluate development activities that will best serve the ERGs.
III. Driving Commerce
Unfortunately, many ERGs are seen as social circles, and this prevents the majority that are more than this from receiving the true credit they deserve. This stigma creates a lack of ERG credibility that leads to a lack of key talent in the membership, limited budgets, lukewarm support of employees’ ERG involvement, and the faint praise of ERGs being a nice “diversity” program. While ERGs should focus business impact on the specific business goals and organizational objectives, next generation ERGs generally will make the biggest business impact by focusing on two areas: consumer insights and market penetration to expand the customer base. ERGs can provide cultural insights, establish relationships with community leaders, and build consumer trust. Firms that successfully engage ERGs in driving commerce and business results have figured out that true innovation and creativity can best be achieved by inviting ERGs, and their diverse perspectives, to contribute to the ideation and innovation processes. This approach makes sense given the consumer buying power of various market segments, including a burgeoning racial and ethnic minority market in the U.S. of nearly $3 trillion according to the Selig Center for Economic Growth, a $743 billion LGBT market according to Harris Interactive, Inc., and a $220 billion market of people with disabilities according to Witeck-Combs. Catalyst references a $12 Trillion worldwide female market, and Nielsen reported millennial purchasing power of $65 billion and influencing upward of $1 trillion in total consumer spending. These are all tempting targets to consider.
IV. Assessing ERG Performance
While ERGs have grown in size and sophistication, methods for measuring their success and performance have not grown at the same pace. According to Diversity Best Practices research the following four flaws exist for companies who attempt to measure the effectiveness of their ERGs:
1. Most organizations assume a linear progression of ERG growth i.e. gradually growing over time. However, some ERGs start with great energy and continue to grow while others become idle. Sometimes the loss of key leaders or changes in the business environment (such as a merger) will cause ERGs to decline, fall into long periods of inertia, or eventually cease to exist altogether.
2. Firms mistakenly assume that all elements of an ERG evolve at the same rate. However, many ERGs are not equally effective in all areas at the same time. It’s common for an ERG to make great strides in its ability to have a greater impact on business objectives, while simultaneously becoming less effective in meeting the professional development needs of its members.
3. Companies fail to assess ERG performance based on the different interests and priorities of multiple stakeholders. What is important to the members of the ERG may not be equally important to the executive sponsor, the head of diversity and inclusion, recruiters, line managers, or others.
4. Firms haven’t found a way to effectively compare the performance of their ERGs to the performance of ERGs at other firms. Because no standard assessment process exists across organizations, ERG leaders find it almost impossible to see how well their groups perform when compared to the performance of ERGs at other firms.
Other measurement criticisms include:
5. A focus on numbers of members or numbers of participation in events rather than outcomes and impact.
6. Failure to measure the ERG’s contributions to mission-critical business results.
7. Lack of qualitative measures that bring insight into the lived experiences of ERG members.
8. Reporting correlation, for example, between ERG membership and higher employee engagement vs causation.
New metrics and analysis is needed to capture the growing sophistication of contemporary ERGs, to allow organizations to simultaneously measure ERG business, career development, I&D culture, and civic impact. New technologies offered by Cockerham & Associates called ERG Insight and ERG Maximizing Software Tool by Diverst, help with tracking, analyzing, and measuring ROI of ERGs. Benchmarking with other firms, for example with Diversity Best Practices 4C ERG Assessment Model, can also be considered for additional insight.
V. Addressing Multidimensional Identities
Society is becoming more multicultural and multiethnic in many countries around the world. For example, the U.S. Census Bureau estimates that the country’s mixed-race population tripled in size between 2000 and 2010. It also reported that by the year 2050, one in five U.S. citizens would be multiracial. Current demographic statistics on multiracial individuals indicate they are already a larger population than Native Americans and Pacific Islanders. A big driver of multidimensional identities are millennials. They are more ethnically and racially diverse than older adults, less religious, less likely to have served in the military, grew up with technology and are open to new techniques, and on track to become the most educated generation in American history. These post-civil rights era young Americans did not experience the same racially segregated world as previous generations did. Their new message is that they want their own identity to cross, rather than stop at, various demographic boundaries. These individuals refusing to be bucketed into just one category forces us to rethink all demographic categories.
Multiple identities are surfacing in other ways, too. As women achieve parity in their overall representation in the workforce, it’s not enough to talk just about women. We need to recognize the “GenYlesbiansinglemother”, the “Boomerprofessionalwomanwithadultkids”, or the “singlewomanmuslimengineer”. There are so many ways individuals can identify themselves. If we pause for a moment and think about how today’s ERGs are defined, we would have to ask ourselves where do multidimensional identity people fit? Are we truly building an inclusive culture in everything we do?
Typically, companies are still trying to serve employees’ multiple identities through single dimension ERGs. What that looks like is forming inter-ERG collaboration and mutual support via periodic joint meetings for sharing best practices and discussing common challenges, cross-fertilizing initiatives, programs, communications, and events. For example, Intel offers a 2-day leadership development experience for Latinos and African Americans, and Siemens Healthcare offers Diversity Day as a common cause for celebration.
Next generation ERGs will significantly alter the current one-dimensional employee resource group landscape. ERGs must be intentionally inclusive, multicultural and multigenerational. Some groups are acknowledging multiple dimensions within an ERG. Meanwhile, some new ERGs are forming around multiple dimensions, such as Gen Y women with children, Native Americans with disabilities, or multiracial gay men. These groups might spring up as subsets of already existing groups. For example, the women’s network might form a discussion group for Gen Y women with children, and this group might dialogue with Baby Boomer women caring for elderly parents; or the LGBTQ network could establish a sub-group for multicultural gay employee. No matter how you look at it, multidimensional identity is part of our current demographics that we may not be fully acknowledging because it is difficult to measure; however, it is part of the current trends for transformation of ERGs.
Embracing multidimensionality is a tall order and one that most ERGs would rather not face right now, given the many other challenges and opportunities in front of them. However, ignoring or denying it won’t make the issue go away. Given how entrenched the current ERG model has become, these vital transformations will not be easy. Companies and their ERGs appear to be set in their ways of keeping ERG boundaries shaped by traditional thinking even though they have a cognitive understanding that multidimensional identities are an increasing reality. There is also (the elephant in the room) a feeling of threat and fear; which can be stated as this: In embracing multidimensionality there remains a risk of diluting a group’s identity or purpose and of trying to be all things to all people and as a result being nothing to anyone.
ERGs are at a crossroads. They are either ascending in their prominence or their relevancy is being questioned. (Deloitte Thinks Diversity Groups Are Passé by Jeff Green, July 19, 2017). In either case, ERGs and the companies they operate within must confront many challenges, including those outlined in this paper. In doing so, ERGs must be ready to engage in new ways of thinking and operating that may be counter to long-cherished notions of what makes ERGs tick. This will require courage and effective leadership.
ERGs are ready with potential to provide collaborative breakthroughs that build competency among its members. The competitive nature of business today means that organizations cannot afford to operate in a manner that prevents ERG members from being heard. Smart organizations know that engaging the creativity and energy of these valuable employees can enable potent contributions, innovations, and solutions.
Resources: Diversity Best Practices, Global Lead, LLD, Mercer LLC, Rebekah Steele, Wikipedia
• Employee Resource Groups (ERGs) are groups of employees who join together in their workplace based on identification with others similar to themselves and/or shared characteristics of life experiences.
• ERGS are at a crossroads
• Before you start, know the history, the challenges, and the opportunities
• Thoughtfully consider how ERGs will enable you to reach your objectives
Moving forward with ERGs
• Consider both local and global dynamics and needs and customize accordingly
• Ensure alignment with career, business, corporate social responsibility, and marketplace goals
• Engage ERGs to make a distinctive impact on your market and more
• Attract senior leaders to positions within the ERGs to enable strong participation and strategies
• Consider developing new leaders through ERGs
• Pursue excellence in assessing ERG performance (and do not fall prey to common challenges)
• Cross fertilize ideas across individual ERGs
• Recognize intersectionality or an individual’s multiple identities (e.g., Native Americans with disabilities)
• When engaged adeptly and thoughtfully, ERGs can be a powerful force for career development, community engagement, business growth and innovation.