All too often, employee resource groups get dismissed as nice-to-haves or solely DEI initiatives. But there’s so much more to why employee resource groups are important for organizations today.
Luckily, while some may question their impact, other companies fully recognize the value of these communities. In fact, 61% of employers even report that they plan to boost their ERGs’ budgets. Would businesses really put that much effort and money into ERGs if they were just a nice-to-have?
ERGs are so significant to businesses’ health that 90% of Fortune 500 companies have them. What’s more, 83% of staff who find their company’s ERGs “effective” or “very effective” report a positive inclusion score.
Employee resource groups can help inform and optimize your business decisions to be better, more inclusive, and more efficient. Which of course helps you become more profitable and expand faster. And every business wants that, right?
So let’s dig deeper into why employee resource groups are important, now more than ever.
Who ERGs benefit
While thriving ERGs benefit the whole organization, we most commonly see groups focused on the following communities:
- Women
- LGBTQIA+
- Disabilities
- Veterans
- Race and/or culture-based
- Black
- Latine
- Pan-Asian
- Age-based
- Multigenerational
- Young professionals
- Parents
- Interfaith
Why employee resource groups are important
Employee resource groups really are pivotal to the health of businesses in the modern world. Let’s look at the benefits to understand why employee resource groups are important:
Make work about more than just work
All too often, it can feel like life is all about work and…nothing else. This can eat away at employees’ wellbeing, which then affects their ability to work.
78% of employees who feel like they belong at work rate their wellbeing positively. In fact, it’s the biggest driver of workplace engagement—91% of employees who feel they belong at work are also engaged.
Given how crucial employee engagement is, this alone is a compelling reason why employee resource groups are important.
Improve retention rates
When people feel like they belong, they’re less likely to want or need to leave. Retaining your star players is therefore also high on the list of why employee resource groups are important.
For example, Dell’s Women in Action ERG helped the company to boost retention rates among its female employees.
Attract more candidates
More than 3/4 of candidates now look for diversity when considering employers. So being loud and proud about your ERGs will help you attract more top candidates.
ERGs show what your business values, something that’s increasingly important among Millennial and Gen Z workers. 89% of employees now want to work for a company that shares their values. What’s more, 39% of Gen Z-ers and 34% of Millennials have declined roles that don’t align with their values.
Sharing details of your ERGs on social media, or even in job descriptions, helps you communicate your values to potential candidates. It then means that people who apply for roles are more qualified, weeding out those who would be the wrong fit for your business because their values don’t align.
Putting your values front and center is another reason why employee resource groups are important.
Elevate your onboarding
Starting a new job can be an intimidating time. ERGs are a great way to help new hires settle in.
You could set up a mentoring program, have a place where they can ask questions, or even organize an ERG specifically for newer employees. They can talk about their experiences and offer each other moral support to make those early days a little easier.
Become more innovative
Innovation is key to standing out in the modern world. It’s also a top reason why employee resource groups are important.
Prioritizing diversity in your business can help you generate new product ideas you may not have thought of otherwise.
For example, Procter & Gamble’s Hispanic and African Ancestry ERGs helped with product creation such as the Pantene Gold series.
And according to BCG, companies that have more diverse leadership generate 19% higher revenues than those with below-average leadership diversity.
Build psychological safety
Psychological safety is vital to a culture of innovation, productivity, and wellbeing. It enables your employees to experiment and try new things without worrying about the consequences to their careers.
As a result, they’ll take more risks, leading to greater innovation and more profits for your business.
In fact, research found that 2/3 of staff feel ERGs contribute to this feeling of psychological safety. Yet another reason why employee resource groups are important.
Boost trust in leadership and colleagues
Trust is another key element to psychological safety. 36% say that ERGs help employees trust leaders more and 31% feel they help them trust their coworkers more. This empowers everyone to achieve more in less time and makes for a more welcoming work environment.
Strengthen company culture
Your company culture is vital to your business success. 26% feel that ERGs helped them connect more to the company culture.
Moreover, 66% of employees believe ERGs help contribute to a strong community feeling, something which gets everyone in your business heading in the same direction, as opposed to working against each other. The more employees work against each other, the harder it is to achieve business goals and the slower everything—and everyone—moves.
Increasing collaboration and boosting company culture make two more points on the list of why employee resource groups are important.
Welcome underrepresented talent
Helping underrepresented talent feel welcomed and appreciated is more important than ever. Having access to ERGs where they can connect with others who share similar experiences and backgrounds shows them you see them, value them, and want to continue supporting them.
Increase revenue
When workplaces are racially diverse, they experience 11.1% higher revenue growth. Over time, that can quickly add up to a huge difference, adding yet another reason why employee resource groups are important.
Conclusion
ERGs are no longer a nice-to-have employee benefit. The bigger your business, the more important it is to show candidates and team members that you’re serious about treating your employees like real people. Beyond that, it shows that you value what their individual experiences can bring to your business.
Organize your ERGs with Workrowd
If you want to benefit from all of these reasons why employee resource groups are important, Workrowd can help. With tools to help market, manage, and measure your ERGs, and all your other employee initiatives in one central hub, you maximize both engagement and your ROI. Get in touch today to book your free demo.
