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The Importance of Employee Resource Groups for Black Workers

ExtensisHR8 minute read

Quick look: The majority of the nation’s 21 million Black employees say they value diversity, equity, and inclusion (DEI) efforts in the workplace, yet many feel their employers pay too little attention to the topic. Here, we review seven best practices for establishing employee resource groups (ERGs), which can foster a sense of belonging among workers of underrepresented groups, alert employers of pain points for these demographics, and improve acquisition, retention, absenteeism, performance, and engagement rates.

Feeling you belong at your workplace is powerful, and everyone deserves to be employed by a business that makes them feel heard, understood, and appreciated.

A culture of belonging can influence diversity, equity, and inclusion (DEI) within organizations, especially for Black employees. According to the Pew Research Center, the U.S. labor force includes more than 21 million Black Americans, many of whom value DEI yet feel disappointed by their employers’ current DEI practices:

  • 78% of Black employees say focusing on DEI at work is a good thing
  • 28% of Black workers are more likely than those in other racial and ethnic groups to say their employer pays too little attention to increasing DEI
  • 51% of Black staff say being Black makes it harder to be successful where they work
  • 41% of Black employees are more likely than their White, Hispanic, and Asian counterparts to report experiencing discrimination or unfair treatment by an employer in hiring, pay, or promotions because of their race or ethnicity at some point in their careers

These unfortunate experiences and feelings are reflected in further research, as well. A survey by the Society of Human Resource Management (SHRM) revealed that:

  • 25% of employees reported not trusting their manager to treat them fairly
  • 26% didn’t feel emotionally safe at work
  • 27% claim their workplace doesn’t clearly provide opportunities for employees to openly discuss issues without fear of penalty, punishment, and retaliation
  • Another 27% didn’t believe their manager encourages a culture of open and transparent communication

This data reveals a tremendous opportunity for business leaders to focus on building a culture of belonging and open communication and addressing any potential bias that may occur. One way to do so is by creating employee resource groups.

What are employee resource groups?

Employee resource groups (ERGs), also referred to as affinity groups, are social networks within an organization comprised of employees with a set of shared characteristics or life experiences, which may include:

The first ERG was created in the 1960s by Black employees at Xerox who gathered to discuss racial tension in the workplace, and they continue to play a powerful role in businesses today.

What do employee resource groups do?

ERGs are established by employers but primarily directed and maintained by employees. These groups:

  • Enable members to share concerns
  • Connect members with mentors and organizational support
  • Raise awareness of how a certain identity intersects with workplace issues
  • Increase staff’s cultural awareness
  • Help employees feel accepted and valued
  • Identify workers with leadership potential
  • Foster better relationships between new and existing employees
  • Provide professional development and skill-building opportunities, including negotiation tactics (especially important when you consider, for example, that Black women make 58 cents for every dollar earned by men)

Organizational benefits of employee resource groups

In addition to the positive impact ERGs can make on their members, they can also benefit employers.

ERGs can help their members feel a sense of belonging at work, which has been shown to increase performance levels and reduce turnover and absenteeism. The groups can also strengthen a company’s employer brand and help attract top talent.

Additionally, the open dialogue and experience-sharing within ERGs can illuminate employee pain points that business leaders may not have been aware of. Addressing these issues can remedy toxic work environments and boost employee engagement and retention.

7 best practices for employee resource groups

Employers should follow several best practices to maximize the effectiveness of ERGs, from understanding staff’s current sentiments to measuring ongoing progress.

1. Establish a baseline

It’s crucial to determine whether employees feel they belong or not, yet workers don’t always feel comfortable raising issues they face in the workplace. Business leaders should consider administering an employee pulse survey to gain a clear view of how staff is feeling. The results from this survey can help management grasp the work experience of different employee demographics and guide the creation of ERGs.

2. Determine principles

Once it’s been decided to form an ERG, the group must establish its guiding principles. These guidelines will inform the ERG’s members (and the organization overall) about the group’s goals, operations, and protocols. Some questions to consider include:

  • What is the ERG’s purpose, vision, and mission?
  • Who can become a member?
  • What do group members expect from themselves and each other?
  • What is the ERG’s leadership model?
  • How will the group recruit and retain members?
  • What is the ERG’s decision-making progress?
  • What is the group’s budget, and how will it be allocated?

3. Align activities with business goals

A major benefit of ERGs is that their activities can tie into the organization’s overall goals. For example, they can contribute to the company’s recruiting efforts, help identify future leaders, and play a pivotal role in reskilling or upskilling employees.

Group organizers should consider the following while determining the group’s key functions:

  • How can the ERG support the business’s main objectives this fiscal year?
  • What can the group do to help the company in the next 90 days?
  • Are any of the ERG’s activities irrelevant? If so, how can we course-correct?

4. Encourage participation

ERGs need members not only to exist but also to achieve their maximum potential. Yet many organizations have room for improvement regarding ERG member recruitment. According to Great Place to Work, almost 100% of executive sponsors believed their company encouraged ERG participation, yet just 52% of ERG leaders felt that was true.

Some ERG recruiting tips include:

  • Simplify the enrollment process
  • Announce upcoming group activities via email, social media, your company’s intranet, and collaboration tools like Slack or Microsoft Teams
  • Communicate the benefits of joining the group (i.e., professional development opportunities)

5. Invite everyone

While ERGs may focus on the needs and experiences of a certain demographic, group leaders should keep enrollment open for all. Everyone can be an ally, and the more people who participate in ERGs, the more effective the groups are to staff and the overall organization. In fact, research suggests that those who work at an organization that prioritizes allyship and inclusion are 50% less likely to leave, 56% more likely to have improved performance, and over 160% as likely to recommend their company as a great place to work.

6. Involve leadership

An ERG, its members, and the entire business are more likely to succeed when senior executives are involved in and advocate for the group. For example, a Black manager with an executive sponsor is 65% more likely to advance in their career, and employees of color with that sponsorship are 50% less likely to resign within a year. Additionally, incorporating a senior leader into the group ensures that the ERG and business goals align.

7. Measure impact

Like corporate teams, ERGs should have clearly defined ways to measure their success and progress toward reaching their goals. Some examples of metrics to measure are:

  • Members recruited per year
  • Informational sessions held, and total attendance
  • Communications sent promoting the group
  • Volunteer hours
  • Members’ professional development achievements

Quantifying these efforts can instill a sense of success within the group’s members and exhibit the ERG’s value to business leaders.

A business partner to help build your employees’ sense of belonging

Effective ERGs matter. McKinsey revealed that just 59% of employees who rated their ERGs as ineffective or very ineffective felt a sense of inclusion at work, versus 83% of those who felt their ERGs were effective or very effective.

With so many responsibilities on their shoulders, human resources (HR) professionals at small businesses may lack the time and resources needed to finetune their ERGs (or create new ones). This is where a professional employer organization (PEO) can help.

PEOs, like ExtensisHR, feature SHRM-certified HR Managers who provide dedicated HR guidance and can assist with policy creation, ERG formation, employee surveys, and more.

Additionally, ExtensisHR’s Knowledge Cloud features immersive, on-demand training on topics like diversity in the workplace, disability discrimination and accommodation, unconscious bias, and multigenerational workforces.

Further, ExtensisHR’s DEI Dashboard features valuable, real-time DEI data on pay equity, salary trends across both gender and race demographics, employee turnover, promotions, and more.

Employee resource groups benefit everyone involved, especially Black staff, who tend to value DEI the most and who may disproportionately experience unfair treatment at work. Contact the experts at ExtensisHR today to learn more about how a PEO can help your business kickstart ERGs (or improve existing ones).

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