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Focus on Employee Resource Groups

We asked Erin Grau to guest write this section of today’s briefing. She’s a people strategy consultant, the former head of people and culture at Away, and a former vice president for transformation and operations at The New York Times. Erin has hands-on experience with many of the issues we’re all wrestling with, and we’ve quoted her in the past about tactics for resetting businesses. We invited her today to share her thoughts about one important area of focus. 

I’ve been asked countless times over the past year how to accelerate progress in diversity, equity, and inclusion (DEI), and I always say the same thing: employee resource groups (ERGs).

I’ve seen first-hand how ERGs (sometimes called business resource groups or affinity groups) can have a disproportionate impact on DEI outcomes, including as an ERG leader at a highly visible public company. ERGs, which are officially chartered networks of employees who share a common identity—like gender, ethnicity, sexual orientation, caregivers—come together around a unifying mission. Their work can increase the inclusion and retention of diverse talent, drive employee engagement, educate through programs and events, and help build diverse talent pipelines.  

Here—from years of building and shaping successful ERG programs—is my advice for both ERG leaders and companies that want to unlock the groups’ potential:

ERGs need structure and support.

I have approached my work with ERGs with the same rigor I apply to leading a business function or unit. 

  • Create a charter. Strengthen the role of ERGs by articulating an ERG’s mission and make clear why the ERG exists and the role it plays for its members and the company. This is also a good place to document the expectations of ERG leaders and members, including for their roles and time commitment.
  • Stand up committees. If you have a high number of active members, consider creating committees to focus on different workstreams, like events and programming, networking and development, policy, culture, allyship, etc.
  • Ensure energy and resources flow to the most impactful things. Create a strategic plan and quarterly roadmaps. I like to plot ideas on an ease/impact matrix, then add the ideas that are highest impact/lowest effort on my roadmap first. At one point at the Times, that meant prioritizing a quick survey of working parents to shape and support a policy we were proposing. 
  • Know what your members need. ERGs should understand the needs and sentiment of their community. Human resources should share relevant qualitative information (member and employee engagement surveys) and quantitative data (hiring, attrition, and promotion rates.) That should inform the initiatives and programming led by the ERG.
  • Centralized tools and resources. In addition to engaged leaders, well-run ERGs have HR support in the form of resources for planning and budgeting, administrative help executing events, and coordination and communication across all ERGs.
  • Don’t forget mental health support, especially for Black ERGs.

Create the structure and conditions for ERGs to support and sustain a company’s diversity strategy.

I’ve heard so many stories from ERG leaders who feel they’re working against HR and leadership teams due to a lack of transparency with data or strategy, and have difficulty getting colleagues’ time, attention, and resources. The most successful ERGs are a pillar in a company’s DEI strategy, and their members serve as advocates for promoting inclusion throughout the company. Share data, share strategy, share challenges, share ideas and solutions so that leadership, HR, and ERGs can work together to help employees from underrepresented groups thrive.

Another tactic I’ve used is to invite members from BIPOC and women’s ERGs to participate in interviews with job applicants. That not only demonstrates to the candidates our commitment to building a diverse and inclusive workplace, but more importantly adds diverse perspectives to hiring decisions.

Companies need to make an investment in ERGs that matches their commitment.

Five decades after the first known ERG, the National Black Employees Caucus at Xerox, was created, 90% of Fortune 500 companies have ERGs, and 8.5% of employees are members of ERGs, according to a 2011 Mercer Report. ERGs aren’t just clubs, they’re a demonstration of a company’s investment in those communities. Many companies rely on ERGs to support their DEI initiatives, but ERGs often lack the funding. Give ERGs a dedicated annual budget and autonomy to deploy those funds where they can have the highest impact, and include budget for ERG-specific training and conferences for ERG leadership. Budgets vary from a few hundred to tens of thousands of dollars, with an average of $7,023 per 100 members, according to one study.

Recognize and reward ERG leadership.

  • Recognize the leadership skills gained and developed through ERGs in performance reviews. Too often companies don’t recognize that there are many ways within a company to demonstrate a commitment to people and organizational development. As an HR leader I’ve made sure that an employee’s contributions to an ERG are formally taken into account when it comes time to decide on promotions.  
  • Compensate ERG leaders. Minda Harts, Sarah Lacy, and Eve Rodsky persuasively lay out the case for paying ERG leaders (who are disproportionately women and BIPOC). Follow the lead of Twitter, which announced a new compensation program for its ERG leaders this fall. “This work is essential to Twitter’s success —it is not a ‘side hustle’ or ‘volunteer activity,’” said Dalana Brand, Twitter’s vice president of People Experience and head of Inclusion and Diversity. 

Secure executive sponsors willing to spend political capital.

Many successful ERGs have a senior leader sponsoring them, helping to both accelerate progress and remove blockers. The leader doesn’t have to identify within that group, but needs to advocate for the needs of the ERG at the most senior levels of the company, and open doors to connections and resources. 

Partner with ERGs to create and shape policy.

When I look back on my time as co-chair of The Women’s Network at The New York Times, I am proud of so many ways we supported, connected and engaged women. We brought in keynote speakers like Malala Yousafzai and Gloria Steinem. We held negotiation workshops and networking events. Most notably, though, we advocated for a generous and inclusive parental-leave policy. Four women and I spent eight months creating a proposal that got the greenlight in 2016, just before I had my second daughter. That policy has served as a model for companies in the publishing industry and beyond. ERGs are a force for building community and connectivity, yes, but they can also be the strongest advisors, thought leaders, and change agents in an organization. Tapping them to solve some of the company’s biggest challenges, especially today, is not only smart, it’s vital. For many companies, diversity advisory councils, which bring together leaders from multiple ERGs, are the best way to have diverse sounding boards on company policies.

If your company is small and lacks enough diverse employees for ERGs, consider a culture committee.

I was an early employee at a startup that wanted to build DEI into its DNA, so before we had the numbers and the support structure for a robust ERG program, we created a culture committee that worked as a hybrid of ERGs and a diversity advisory council. There was a charter, members represented the needs and interests of employees, they helped shape policies, and built the culture. The committee was diverse (in terms of race/ethnicity, gender, tenure, department and sexual orientation) and they served as representatives, advocates, and liaisons as they worked on programming and initiatives that supported the company and its people. And they helped reinforce the belief that different people can come together to turn a shared vision into a reality.

You can learn more about how to launch ERGs here and here. 

What Else You Need to Know

Key announcements out of virtual Davos center around work and fairness. 

  • Nearly 50 organizations signed on to a new coalition around reducing racism in the workplace, which requires members to have a long-term plan to be anti-racist, put racial equity on their board agenda, and make at least one other commitment related to racial justice. (More than 500 CEOs and corporate chairs are taking part in the meeting, so we might have hoped that a few more companies would have stuck their necks out and signed on to this cause.)
  • Investments in reskilling workers could create 5.3 million net new jobs by 2030, according to a new report released by the World Economic Forum and PwC. 
  • Over 60 businesses committed to disclosing regularly where their companies stand on new “stakeholder capitalism” metrics released by the Forum. The new metrics relate to governance, environmental impact, treatment of workers, and economic contributions to the community—providing helpful transparency in areas such as fair pay, diversity and inclusion, water consumption, and emissions. 
  • Over 60% of adults around the world believe deteriorating mental or physical health is a very real or somewhat real threat, according to a new survey released by the Forum. A similar number also characterized loss of employment or income as a threat. Just 18% think the pace of climate change will improve.
  • Meanwhile, some Davos locals think life is better without the Forum event happening in the Swiss ski resort town this year. 

Democrats are proposing phasing in a $15 minimum wage. If it makes its way into law as drafted, the federal minimum wage would rise from $7.25 to $9.50 this year, gradually increasing to $15 in 2025. 

  • Under the Raise the Wage Act, the minimum wage would then continue to rise indexed to median wage growth in the US—so it wouldn’t again get stuck at the same level like it has been since 2009.
  • The Economic Policy Institute think tank estimates that 23% of the workers who would benefit from the increase are Black or Latina women.
  • At $15 per hour, workers earn around $31,000 annually, which still isn’t a living wage in most places. 

Double masking got a notable endorsement. Dr. Anthony Fauci said this week that “it just makes common sense that [wearing two masks] likely would be more effective.”

Coda

Are tech workers slacking off? Almost one-third of the people from 42 tech companies who answered an anonymous survey on Blind, an employer review and community site, said they are working just three to four hours a day. 

You thought you were behind on your work. Trial courts in Florida face a backlog of over 1 million pending cases amid the pandemic. 

Designers have been thinking about what men will wear when the outbreak subsides. The fall 2021 collections they’re unveiling include slick suits and swaggering coats. But they also acknowledged that pandemic-era loungewear might be hard to leave behind. Prada dressed some models in knit long johns. 

The handbook for this new era of business doesn’t exist. We’re all drafting our own as we go along—and now we’d like to start doing so together. You can sign up here to receive this briefing by email.