Employee resource groups (ERGs) are invaluable for enhancing the employee experience and creating inclusive cultures. A heightened awareness of systemic racism has forced many organizations to analyze their diversity, equity and inclusion (DEI) efforts, only to realize they were missing the mark. From reactive statements in response to protests, to hiring chief diversity officers without providing them resources to implement change, the line between performative DEI and change-making is thin. With DEI spending projected to reach $15.4 billion by 2026, many organizations now realize that DEI is an integral part of operations.

What Are ERGs?

ERGs are internal groups that connect employees of similar backgrounds and lived experiences. ERGs can also include allies as well as executive sponsors. ERGs can encompass many identities, such as groups for Black and Indigenous employees to populations such as young professionals, veterans, LGBTQIA+ and women. Even though ERGs have become a post-2020 near-mandatory component of an effective DEI strategy, the concept is not new.

The first version of an ERG in the U.S. was created in the 1960s by Xerox. The Xerox National Black Employees Caucus amplified Black voices to help push the needle on culture change. Since then, approximately 90% of Fortune 500 companies have implemented ERGs.

How Do ERGs Support Organizational DEI Efforts and the Employee Experience?

ERGs help drive effective DEI strategies. At a time when only 39% of companies have DEI-focused roles, ERGs can help bridge the gap. From helping underrepresented employee populations to attracting the next wave of talent, ERGs are good for business. L&D leaders can have a large influence on the overarching goals for an organization. DEI is an integral part of modern workplace training, and organizations should empower their L&D teams to weave it into the company-wide learning plan for employees.

ERGs give employees a shared space to share their stories and feel empowered. They also help employees from dominant groups learn more about the lived experiences of their colleagues and how they can move from passive to active allies.

In addition to providing employees with a psychologically safe space, ERGs are vital for creating feelings of inclusion at work. A 2022 Ipsos study found that 88% of working Americans agree that belonging fosters increased productivity. They also noted that 76% of respondents felt belonging includes just and respectful treatment. Studies like these highlight the importance of creating a company culture that is employee-centric and helps employees feel comfortable bringing their authentic selves to work.

How Can Training Professionals and Organizations Better Support Their ERGs?

Great Places to Work (GPTW) conducted a study on ERGs and came back with interesting results. For starters, there was a noted disconnect between how well executive sponsors felt the organization was doing versus ERG leads. Their research found that while 100% of the interviewed executive sponsors feel that their organization actively supports ERG participation, only 52% of ERG leaders feel the same. These figures remind us of the all-too-familiar disconnect of organizations that talk the DEI talk but don’t walk the walk. One of the biggest indicators of an organization that doesn’t prioritize ERGs as part of DEI is where they allocate resources. The GPTW study noted that 51% of respondents said they have an annual budget of $5,000 or less.

On top of their actual job, leads are responsible for recruiting, engaging, and organizing activities for the ERG. With tasks ranging from things like organizing volunteer days and running the ERG’s meetings, to sourcing a guest speaker or putting on an all-company activity, ERG leads have a lot to juggle. This creates the “perfect” environment for ERG leads (who tend to be members of the underrepresented group), to feel burned out, face pushback and grapple with microaggressions from colleagues, and feel frustrated from a lack of support from executives.

In addition to financial support for ERGs, organizations can also offer continuous learning opportunities that help foster cultures of inclusion. By incorporating lessons on topics such as active listening and emotional intelligence, ERG members can feel seen and supported and allies receive resources to educate themselves on the challenges their underrepresented colleagues face, becoming stronger change makers. This training can also serve as discussion starters for ERG meetings and arm employees with tools to navigate difficult conversations.

Companies can no longer coast on passive DEI policies — DEI is a business imperative and environmental, social and governance (ESG) necessity. The data speaks for itself: diverse companies outperform their less diverse counterparts in profitability by 36%. Start making investments in your people now by supporting and funding your ERGs. Your underrepresented employees and their allies will thank you.