Employee Resource Groups Can Help Boost Bottom Line

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By Maeve Allsup

Sept. 28 — Employee Resource Groups have been used in the corporate sector for over 30 years, bringing together specific identity groups within companies to promote diversity and help employees feel included in the company culture.

However, in addition to creating a comfortable work environment, ERGs can also have a significant impact on a company’s bottom line by supporting the brand image, improving retention and increasing employee productivity.

“As business leaders have to navigate a more multicultural terrain in the workplace and the marketplace, they are realizing ERGs are a key resource,” Tolonda Tolbert, senior director of the Inclusive Leadership Initiative at Catalyst, a nonprofit organization focused on workplace inclusion, told Bloomberg BNA Sept. 23. These resource groups support business, Tolbert said, as they expand an organization’s reach into emerging markets, help improve reputation and support brand.

Inclusion Leads to Engagement

Surveys conducted by Catalyst found that a sense of inclusion is the key to an engaged work force. The 2014 survey, Inclusive Leadership: The View From Six Countries, which included 1,512 employees worldwide, showed that those who reported a greater sense of inclusion also reported increased “team citizenship behaviors” and innovation in the workplace, by 46 and 42 percent, respectively.

A 2015 Catalyst survey highlighted the role of ERGs in promoting engagement and innovation. According to the survey, 50 percent of ERG members reported a greater sense of inclusion, an increased intent to remain at their job long-term and higher levels of commitment to the organization, which helps companies lower the costs of recruiting new employees.

Employer Support

“What the groups accomplish depends on the amount of focus, resources and support they are given,” Tolbert said. “ERG members give a unique perspective to company leadership in a variety of ways, including advising the HR department and helping to identify potential, and reviewing and revising company policies and practices.”

Tolbert said a huge focus in today’s marketplace is on how to get more out of employees for less, “and ERGs are the best return on investment. As the corporate landscape becomes more and more diversified, we are working to understand how organizations are able to make a home for people by having ERGs but are also using them to benefit the company.”

Use in Higher Education

Although ERGs have been most widely used in the corporate sector, that’s not the only place where they are used. “Employee resource groups make good business sense,” Alyce Johnson, manager of Staff Diversity and Inclusion at the Massachusetts Institute of Technology, told Bloomberg BNA Sept. 21, “and higher education is following corporate on this.”

“MIT views employee resource groups as part of a best practice strategy for building an inclusive environment,” Johnson said. “Investing in these groups is a tangible way to demonstrate inclusion.”

The focus for MIT is on how the groups in turn contribute and give back to the Institute,” Johnson said.

When it comes to younger employees, those between the ages of 22 to 35, MIT leverages its millennial resource group to identify what it takes to retain this notoriously mobile group, Johnson said.

While MIT is still in the process of evaluating the full impact of its ERGs, members have already assisted the school with its recruitment efforts, she said.

To contact the reporter on this story: Maeve Allsup in Washington at mallsup@bna.com

To contact the editor responsible for this story: Tony Harris at tharris@bna.com

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