Are Employee Resource Groups Important to Prospective Hires?


Are Employee Resource Groups Important to Prospective Hires?

Workplaces expanding their diversity, equity, and inclusion (DEI) initiatives must consider the opinions of existing employees while also thinking about changes that appeal to new prospective hires, particularly hires who are members of a historically marginalized and/or underrepresented group. The most effective DEI changes—those that lead to happier employees, increased output, and more integrated organizations for instance—are those that impact the organization at all levels, and reflect the diversity of opinions and identities in the organization regardless of position in the organizational hierarchy.

Prospective hires particularly want to see that they will be listened to, heard, and valued in their place of work. Employee Resource Groups (ERGs) are one way of integrating DEI into a workplace that can catch the eye of prospective hires, because they can offer all of these things and more. 

ERGs rose to popularity in the 1960s during a period of intense racial conflict (not dissimilar to that which we have experienced for the past several years). Originally called affinity groups, they were primarily race-based employee forums, like the Black Caucus at Xerox Corporation, which is the first cited ERG and was designed to advocate for equal pay and opportunities. In the 1970s, ERGs related to other marginalized identities became more popular, including those for LGBTQ+ employees (the first LGBTQ group organized in 1978 at Hewlett Packard). While the names for ERGs take several different forms (affinity groups, employee networks/councils/forums, and business resource groups), their design and purpose remain the same. 

ERGs are voluntary, employee-led groups that are sponsored by the organization and serve as a resource for members and the organization as a whole. They are “dedicated to fostering a diverse and inclusive work environment within the context of the organization’s mission, values. Goals, business practices, and objectives.” Welbourne and McLaughlin identify three categories that ERGs typically fall into: social-cause centered (e.g., sustainability, community support), professional-centered (educators, engineers, graphic designers, etc), or attribute-centered (demographics or identity, such as BIPOC, LGBTQ+, women). When it comes to DEI, attribute-centered ERGs take center stage historically, and for a good reason—they are successful at highlighting voices that may not be heard in traditional organization hierarchy.   

Practically, ERGs provide social and professional support for their members, open up a path for advocacy, and provide avenues for information sharing. Importantly, while they are voluntary, they are recognized and formalized by the employer. In this way, ERGs are a promise to members and prospective hires that the organization cares about its organizing issue(s) and has committed to actively listening to its members and making changes in response. 

This is part of building a culture of inclusion, or demonstrating workplace support for a diversity of background, thoughts, and perspectives. As a “bottom-up” employee involvement practice, ERGs inject the valuable knowledge, skills, and insights from members on lower rungs in an organization’s structure into higher-up levels. 

In short, ERGs are a feedback structure incorporating diverse employee voice and part of effective diversity management—leveraging the different information and knowledge bases of members of historically marginalized groups. In this way, both employees and employers alike benefit from the relationship— “enhancing workplace outcomes for historically disempowered employees while at the same time creating value for the organization.” ERGs are a tool for diversity that also ultimately drive innovation, creativity, and change. 

Prospective hires look for workplaces that are willing to listen to them: workplaces with inclusive leadership. Inclusive leaders are open, accessible, and available. Employee retention and long-term satisfaction, especially of members of historically underrepresented groups, is determined in large part by the small two-to-three-month window after initial hiring. While new employees settle in, they want community as they acclimate, and to feel like their voices are being heard. 

A common misconception in conversations about DEI assumes that simply increasing the employment numbers of diverse groups automatically increases opportunity for employee voice. Studies show that this is not the case. In fact, it is actually often the opposite—historically predominant groups maintain or gain power when more marginalized diverse hires join. Thus, it is vital that organizations pair their hiring changes with some type of elaboration process, which van Knippenbberg et al. describe as “the exchange of information and perspectives” followed by individual-level processing, group discussion and feedback, and integration.    

ERGs give credence to this by offering instant connection to like others and a formalized open channel of communication for constructive feedback. ERG impact on employees includes personal and professional development, mentoring, information sharing, communication within and across groups, and problem solving. One of the most important effects, though, is that of offering a culture of trust and community, meaningful work, and value alignment. This is positively associated with employee commitment to an organization. One of the reasons for this is how ERGs impact employees’ sense of psychological safety at work. 

In the workplace, psychological safety is the feeling that you, as an employee, are welcomed, comfortable being yourself at work and feel safe taking risks. It’s by no means a new concept; researchers have been relating psychological safety to the workplace for decades. Kahn (1990), for instance, defines psychological safety as feeling able to “show and employ one’s self without fear of negative consequence to self-image, status, or career.” Drivers of psychological safety include high-quality interpersonal relationships at work, open, available, and accessible leaders, and relational leadership that encourages creativity without interpersonal threats or defensive orientation. 

A particularly useful tool for developing these conditions is that of formalized processes (like ERGs) that build the knowledge, skills, and abilities of employees and reward them for their value to the organization. When we build our abilities, we increase our confidence and in turn this lowers the probability of low self-esteem and identity threat—things that employees from historically underrepresented groups are acutely impacted by. ERGs actively cultivate zones of psychological safety by functioning as formal mechanisms of innovation and inclusion. When an employee is part of a supported “community of practice”, they feel more capable of overcoming barriers such as fear of not fitting in, punishment for risk-taking, peer pressure, and more. 

What ultimately happens is that the psychological safety of ERGs grows into psychological empowerment, or the experience of meaning, competence, self-determination, and impact at work. This is linked to positive employee attitudes (Riordan, Vandenburg, and Richardson 2005). Welbourne and McLaughlin’s 2013 study of ERGs revealed that ERG-member employees in companies had higher energy levels than their non-ERG counterparts and experienced a more engaging and fulfilling work experience. Employees with more energy and investment in their work not only grow in their own career path but also support the organization as a whole. 

Inclusive leadership, which is positively linked to psychological empowerment, results in greater employee involvement in creative work—making psychological safety a mediator in the relationship between inclusion and creativity. This is even greater when the contributors of creative ideas are members of diverse groups. Greater racioethnic diversity and participation of women, for example, are both linked to better outcomes in situations that require innovation and complex problem-solving. 

And so, as the saying goes, what goes around comes around. Employers benefit just as much from ERGs as the members of the group themselves. ERGs naturally build a large and connected diverse employee base that can have a direct (often positive) effect on organizational operations. They attract and develop new employees because prospective hires see themselves represented, heard, and their concerns acted on and integrated into workplace practice. 

ERGs are much more than groups with like identities. To a prospective hire, they are evidence that an employer cares about DEI and is actively committed to making genuine action. They are an important signal of the likelihood of psychological safety facilitated by open communities of knowledge sharing and identity-based connection. All of this makes a workplace valuable to anyone, but in particular diverse employees who have historically been rendered invisible in traditional organizational hierarchy. 

In DEI, action matters. Creating ERGs is one way to begin taking DEI action that will attract prospective hires while building up the entire community. When employers care, employees care. And when employees care, organizations as a whole benefit.    





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