How Organizations Support Employee Resource Groups

This article on employee resource groups is an abbreviated version of a research report prepared for a Kindred member by Kindred Concierge. Concierge is our on-demand research and insights team that helps our members get the data and information they need to navigate complex decision-making within their organizations. To learn more about the Kindred experience and member benefits, apply here. For existing members, log in to the member portal and maximize your Kindred experience through Concierge today.

Earlier this summer, LinkedIn announced its plan to pay the global co-chairs of its employee resource groups (ERGs) $10,000 a year beginning this past July. Global co-chairs at the company typically serve two-year terms and will be compensated at the end of each year. In addition, LinkedIn also introduced a non-financial rewards system to recognize more than 500 leaders of employee resource groups.

LinkedIn’s decision followed in the footsteps of companies like Twitter and Justworks, which also compensate ERG leaders financially. Companies have taken steps to recognize the value of ERGs, which play an important role in creating an inclusive workplace and fostering a sense of safety and belonging among employees. However, they tend to rely heavily on volunteer efforts and are often underfunded. 

According to Catalyst, “employee resource groups are voluntary, employee-led groups that foster a diverse, inclusive workplace aligned with organizational mission, values, goals, business practices, and objectives. Other benefits include the development of future leaders, increased employee engagement, and expanded marketplace reach.” In a recent survey from WerkLabs and the Mom Project, two-thirds of respondents agreed that offering employee resource groups would improve inclusivity at an organization. Eighty-four percent were interested in joining an ERG.

The Benefits of Employee Resource Groups

Today’s employees are a driving force for effecting organizational change. At a recent Kindred Assembly, Conspiracy of Love’s Afdhel Aziz noted the important role employees play as a source of feedback for leaders who listen. Employee resource groups, in particular, are a guiding light that help companies determine whether their actions — internally and externally — align with their organizational purpose. 

In addition to acting as a guiding light, ERGs provide a number of other benefits to the organization, including:

• Improving overall work conditions for marginalized groups by advocating for inclusive benefits 
• Creating a safe space for employees to raise issues and concerns that leadership needs to address.
• Identifying top talent within the organization and providing opportunities to connect group members with mentors across the company
• Developing a talent pipeline as employees and job seekers increasingly seek out companies that prioritize diversity and inclusion. Per the WerkLabs study, over 90% of employees say that offering ERGs is a good indication of inclusivity within a company. 

Supporting Employee Resource Groups

According to WerkLabs, less than 20% of ERG members report that they receive strong resource-related support from company leadership. As companies make efforts to recognize the value of their employee resource groups, here are some of the ways they support employees.

• Compensation. Employees often volunteer to complete the work of employee resource groups in addition to their full-time jobs. Therefore, it is imperative that companies compensate these leaders. This could be through a salary increase, a bonus, or officially dedicating a percentage of their role to this work. In addition to LinkedIn, other examples of companies providing financial compensation include Uber, which offers ERG leaders a $5,000 cash bonus. Cadwalader also grants employees 100 billable hours per year for activities related to the firm’s citizenship and engagement.
• Funding for professional development. Companies can provide access to external resources to help ERG leaders and members learn and grow professionally. Professional events and networks provide employees with a way to feel less isolated and receive leadership and development training. Memberships to professional organizations (such as Kindred) can also provide additional resources for the ERG.
• Leadership recognition. As with most things related to building a diverse and inclusive work environment, leadership involvement is essential to success. Leadership informs budget opportunities and can help provide ERGs with the funding and resources they need to operate successfully. Recognizing the work of ERGs also demonstrates intent to include diverse employees and empowers employees to participate in learning opportunities.

Employee resource groups help employees feel safe and comfortable. They also develop emerging underrepresented talent and recruit from a more diverse talent pool. To continue to reap the benefits of ERGs, companies must provide incentives to attract and retain the best ERG leaders and opportunities for continued professional development. 

Dig Deeper

On August 17, Kindred hosted a member-exclusive Assembly with Jennifer Brown Consulting Group on Harnessing the Power of ERGs. Kindred members can watch the recording on demand to learn effective practices to channel employee passion into strong communities that support culture, retention, and innovation. Not a member? Learn more about Kindred programming and other benefits of Kindred membership.