7 Ways Employee Resource Groups Benefit Your Organization

In 1964, the then-CEO of Xerox, Joseph Wilson, was at a crossroads. His company had built, what was considered at the time, a progressive hiring policy. Over the years, this policy proved to be a success. Xerox increased the number of Black Americans joining the organization. But another metric increased, too: cases of discrimination against Black employees.

During this time, the country was at the precipice of civil unrest. Racial tensions culminated in riots in Rochester, New York—the company's headquarters. Wilson knew that something had to change to improve the dynamic within Xerox.

In 1970, Wilson and Xerox's Black employees launched the National Black Employees Caucus. The purpose of the caucus was to offer a space for Black employees to discuss their experiences and advocate for change within the company. Together, these employees set in motion the country’s first official Employee Resource Group (ERG).

Flash forward to today: 70% of organizations have an ERG. These groups serve the unique needs of different minority groups, including people of color, women, people with disabilities, and the LGBTQ community, to name a few. Much like the members of the National Black Employees Caucus, people in ERGs use the space to influence positive change within an organization. In fact, ERGs drive value for organizations in many ways. We've outlined some of them below.

1. Giving underserved employees a formalized voice. Underserved groups at your company are likely already discussing their unique everyday experiences. However, when they’re talking at the watercooler during their lunch breaks, or getting together for happy hours after work, these discussions are unlikely to effect change. Through ERGs, underrepresented employees can talk about their  experiences in a safe space. Further, ERGs offer employees a mechanism to inform management of their concerns and ideas for improvements.

2. Facilitating the onboarding process. The onboarding period is stressful for any new employee. Starting a new job is even more challenging for those who may not feel that they have the support they need. When companies offer ERGs, new employees from underrepresented groups can get the built-in support they need. Not only does this improve their onboarding process, it sets the stage for higher retention.

3. Increasing engagement. ERGs can cultivate a sense of belonging among underrepresented employees. And employers shouldn't underestimate the impact a sense of belonging can have on their teams. Research shows that, when employees feel they belong at work, they are 3.5 times more likely to be engaged, motivated, and productive. 

4. Developing leaders. By taking on leadership roles within ERGs, people from underrepresented groups develop important managerial skills—which signal their potential to senior-level staff. Savvy executives will take note and connect with these emerging leaders.

5. Providing support from allies. ERGs serve not only minority groups; people who are their allies can also join. By joining an ERG, allies can learn more about their peers' unique concerns and experiences. And with a clearer point of view, allies can better lend their support to underserved peers.

6. Fostering innovation. Members of an ERG often share similar demographic backgrounds. However, they don't always have the same professional titles or experience. When ERG members congregate, different teams within an organization often start connecting. With increased cross-departmental discussions often comes increased creativity and innovation—two mission-critical needs for any business.

7. Improving customer relations. Organizations with ERGs gain valuable information about untapped groups. Thoughtful leaders will take note of the issues that matter most to underrepresented groups —and use these signals to better understand the underrepresented groups that buy their goods and services.  As a result, companies can improve the relationships they have with their customers, while prioritizing the voices of their underrepresented employees.

ERGs offer an avenue for organizations to foster a culture of inclusion, while providing underrepresented employees with the resources they need to do their best work. Together, these benefits strengthen the company as a whole.