“ERGs have formed within the workplace to support and represent people with identities and demographics related to gender, race, sexual orientation, ability/disability, caregiver roles, military status, religious affiliation, generation, geographic area, job function, and more” – Farzana Nayani, DEI consultant and coach.
Talent drives business success—but what drives talent? Beyond the obvious answers of job satisfaction and competitive pay, there’s another powerful force at play: genuine human connection. This connection manifests in various ways, but one of the most impactful is through Employee Resource Groups (ERGs).
ERGs, which took root in the US in the 1960s during the civil rights movements, have evolved into strategic assets that influence company culture and create measurable business impact. Their rise in recent times signal a fundamental truth about modern workplaces: community drives success. At their core, ERGs are voluntary, employee-led groups that create safe spaces for individuals to connect based on shared characteristics, experiences, or interests. These communities might form around various identities—ethnicity, gender, sexual orientation, disability status, or even shared interests like sustainability or parenthood.
And the data speaks volumes. Studies and surveys suggest that ERGs make employees feel safe, heard, and included. Like the report from Workhuman, which says that employees trust leadership and coworkers, feel comfortable bringing their authentic selves to work, and gain confidence to speak up, when they are part of ERGs.
And feeling accepted seems to be top-of-the-mind for jobseekers too. A Glassdoor survey shows that a diverse workforce is a crucial factor when evaluating companies or job offers for 76% of jobseekers.
Perhaps this is one of the reasons why 90% of Fortune 500 companies have ERGs.
Let’s take a look at some of the key ways in which ERGs boost inclusivity.
The Power of being Seen and Heard
“The groups serve as important avenues for open dialogue about issues — systemic racism, microaggressions, diverse hiring, etc. — impacting the work environment.” – Ian Brown, Vice-President and Chief Employee Experience Officer at Duke University Health System.
When employees join ERGs, they gain belonging. These groups create platforms where experiences are shared, challenges discussed, and innovative solutions formed from diverse perspectives.
For underestimated talent in particular, ERGs can be game-changers. They provide visibility and amplify voices that might otherwise go unheard in traditional corporate settings. With this, ERGs create a sense of community, where people from shared backgrounds and experiences find a welcoming space.
Strategic Impact
“Now, more than ever, companies must put DEI objectives into action, and ERGs are critical to making change happen.” – Toki Toguri, Co-founder, Diverst
While the community aspect of ERGs is invaluable, their influence extends far beyond social connections. These groups often become incubators for leadership development, mentoring relationships, and cross-functional collaborations. Members can network with colleagues they might never encounter in their day-to-day roles, opening doors to new opportunities and perspectives.
Take the case of K Raheja Corp, which introduced their first ERG for women employees across all their businesses. The initiative was started based on data from focused group discussions, surveys, and other activities. Its aim is to, “inspire professional growth, facilitate meaningful networking, and advocate for holistic wellness among our women talent. PowHER is a testament to our belief in the transformative power of a diverse and inclusive workforce,” says Urvi Aradhya, Chief Human Resources Officer. This exemplifies how ERGs can directly impact both employee growth and business outcomes.
Driving Engagement through Authentic Connection
“Normalized, non-exceptional representation is a big step towards understanding and inclusion. It’s so important we create that voice authentically and in a way that is relevant to today’s world.” – Peter Lewin, SVP of Strategy, Innovation & Analytics, Paysafe
The correlation between employee engagement and organizational success is well-documented. ERGs offer a unique solution by creating authentic connections that make employees feel truly invested in their workplace community.
When people feel connected to their colleagues and aligned with their organization’s values, they’re more likely to bring their full selves to work. This increased engagement translates into higher productivity and longer tenure with the company. It’s a simple equation: connected employees become engaged employees, and engaged employees drive organizational success.
Best Practices for Effective ERGs
If you want to establish or enhance your ERG programs, here are some key principles that can guide your approach:
- Voluntary participation: The power of ERGs lies in their authenticity that comes from voluntary participants and organizers. Mandating participation defeats the purpose and can create resentment rather than connection.
- Leadership support: While ERGs should be employee-led, visible support from organizational leadership legitimizes these groups and ensures they have the resources needed to thrive.
- Clear objectives: Successful ERGs align their activities with both member needs and organizational goals, creating value for all stakeholders.
- Inclusive approach: While ERGs may focus on specific identities or experiences, they should welcome allies and supporters who want to learn and contribute.
- Measurable impact: Tracking metrics like engagement scores, retention rates, and participation can help demonstrate the tangible benefits of ERG programs.
Looking Ahead
As workplaces continue to evolve, the role of ERGs will only grow in importance. These groups represent more than just a nice-to-have employee benefit. They foster communities where employees feel valued, heard, and connected, creating the conditions for both individual and organizational success.
The Women@Microsoft Scholarship (W@M) is an ERG that is geared towards bridging the gender gap by supporting women employees through mentorship opportunities, skill development, networking, and so on. The W@M is run entirely by women and according to Microsoft’s D&I report, there has been a 3.6% increase in women representation since 2019.
Now, that’s what we call individual and organizational success.
