Almost all Fortune 500 companies have Employee Resource Groups (ERGs), yet only a fraction (5%) of organizations actually financially compensate their ERG leaders. This disconnect is another all-too-common example of the chasm between companies’ commitment to diversity, equity, and inclusion (DEI) and the actions they are taking to promote equity and inclusion. To narrow the gap, organizations need to take a critical step: Pay ERG leaders for the valuable, culture-building work they do.
ERGs have evolved and that needs to continue
ERGs have been a cornerstone of organizations’ DEI initiatives for more than 50 years. In 1970, Joseph Wilson and Xerox’s Black employees launched the National Black Employees Caucus, the first official ERG in the U.S., as a response to race riots that took place in Rochester, NY. ERGs have since evolved from exclusively race-based employee groups to communities that support people from a variety of backgrounds, with Hewlett Packard’s Gay and Lesbian Employee Network (GLEN) launching in 1978. Today, while Culture Amp’s research shows that groups focused on race and ethnicity, gender, and LGBTQ* status are the most common, many companies are building communities focused on disability, age, and interfaith collaboration.
There has been a huge increase in DEI professionals and DEI investment over the past 12 months, with an estimated 107% increase in DEI roles open at companies over the last five years. Culture Amp data show that half of organizations created their first DEI role in the past 12 months and most Chief Diversity Officers were hired in the past two years.
Yet there is still a further investment that needs to be made. Today, only 39% of organizations have DEI-dedicated roles, and these individuals tend to work as a team of one, which is a huge contributor to unsustainable workloads, given how much work needs to be done in order to root out inequity from organizations that have long been designed to produce it.
ERGs often fill the resourcing gap companies choose to create when they fail to invest in hiring a dedicated DEI leader or team. Let’s be clear: This is unethical and inherently inequitable.
The value of ERGs
ERGs are a key part of an organization’s employee value proposition, a way of attracting talent, developing members professionally, building community, and fostering a Culture First organization. Roles of ERGs include:
- Serving as a professional network and source of professional development for their members and allies through their programming.
- Building and fostering community as an opportunity to engage underrepresented people.
- Empowering employees to build a more inclusive culture through education and awareness.
ERGs provide the sense of belonging that employees and candidates seek. We know that belonging has a strong correlation to commitment and motivation in the workplace, directly translating to employee retention, pride, and motivation–all crucial elements for organizations looking to overcome the Great Resignation and the other challenges that come with running a modern organization.
Above all, a sense of belonging has particularly higher correlations to engagement for historically underrepresented or marginalized individuals, suggesting that initiatives centered around cultivating a sense of overall belonging may have a greater impact on improving workplace engagement overall.
The benefits of ERGs need to translate to benefits for ERG leaders
Despite the tangible value that ERGs provide, ERG leaders are almost always unpaid and underrepresented. This can have devastating consequences for ERG leaders, including burnout and stalled career progression, as their work as an ERG leader doesn’t count as “real work” that is explicitly and specifically valued by their organization. Ironically, the current state of play entrenches the inequality that ERGs are striving to overcome and nearly requires them as leaders to sacrifice their own careers and well-being.
Paying ERG leaders isn’t a one-size-fits-all model. Each organization will need to build a model that aligns with its operations and culture. Financial, legal, and management considerations need to be taken into account, but don’t need to become roadblocks. If you work with stakeholders to come to an agreement on key questions, you can develop a framework that puts teeth behind your DEI commitments and sets ERG leaders up to be successful, personally and professionally. For example, Culture Amp provides $3,000 compensation for up to four leads per ERG and $6,000 for one chair per group. In addition to direct financial compensation that’s reflected in each paycheck, Culture Amp also provides additional professional development opportunities and access to executives for ERG leaders.
Investing in ERG leaders is an equity issue
Those organizations that want to walk the talk on their DEI commitments must pay their DEI leaders. It is time to let go of the practices that no longer serve us and create a space where marginalized people can thrive. Paying ERG leaders is an opportunity to live (rather than just say) that DEI work is recognized as more than an additional activity, undertaken by those who are most impacted by systemic oppression and exclusion. It’s time to invest in the leaders that have a real impact in creating a better world of work for everyone.
Thushyanthi Muruges is the Equitable Design & Impact lead, People & Experience at Culture Amp.