Employee resource groups, or ERGs, are now a staple at most workplaces. But if poorly run, they can have disastrous consequences, some diversity chiefs believe.
The earliest versions of ERGs sprung up in the 1960s when Black workers at Xerox organized to discuss race-based tension in the workplace and continue to be relevant today for issues like gender, identity, politics and more.
If run well, they can improve work conditions for alienated workers, bring employees together in a safe space, build camaraderie and more. A new report from charitable donation-management platform Benevity found that 90% of respondents say they have personally benefited from DE&I initiatives at work.
On the flip side, if ERGs are not properly supported by employers, they can backfire. “If they are not supported well, that can actually become a source of toxicity in the business and it can have unintended consequences around engagement and inclusion and diversity,” said Sona Khosla, chief impact officer at Benevity.
We spoke to experts to identify the possible outcomes of ERGs if they are not supported in the right ways and how leaders avoid them failing.
1. ERGs can end up ‘reinforcing stereotypes.’
Nicole Simpson, director of DE&I for RAPP US, a global marketing and advertising agency, has years of experience running a variety of ERGs. She says that one of her biggest concerns is that the ERG ends up reinforcing stereotypes.
“If there aren’t these right containers for the conversations, the people involved, how the communications are rolled out, it can be disastrous on multiple levels in terms of creating division,” said Simpson.
A well run ERG means battling long-standing stereotypes and misconceptions. If it’s not being run smoothly, there could be messaging and imagery that reinforces negative stereotypes. Or, it may unintentionally create a sense of homogeneity that reinforces the stereotype that people from the group are all exactly the same.
“If the ERG isn’t managed properly and the content perpetuates stereotypes and negative assumptions about the group, it creates division and feelings of tension,” said Simpson.
That’s why Simpson recommends that the foundation of the ERG is built on respect and love. Without that, she says it can lose its purpose and focus.
2. ERGs can lead to tokenism.
ERGs can quickly feel like a company is simply paying lip service to diversity and inclusion rather than genuinely valuing different perspectives. If there is an ERG but it is not getting support from the company, it might feel as though it is just a token play for a company trying to amp up its diversity, when it really isn’t doing what it can to support it.
When employees are going out of their way to volunteer to lead these groups, and the company uses it to attract more people to the company, but then doesn’t actually support its efforts, then it quickly falls flat. Most (95%) employees now weigh a prospective employer’s DE&I efforts when choosing between job offers with similar salary and benefits, according to Benevity’s 2023 The State of Workplace DEI report.
“These groups are supposed to be safe spaces for the community,” said Simpson. “If they’re not handled properly, they can be a sign of superficial support if they’re not given the financial backing, backing from leadership, and buy-in from leadership. If that’s not done properly, it becomes this tokenized group and that can be really hurtful to the community that it was supposed to be built to help.
“We need the companies to actually walk the walk and not just talk the talk,” she continued. “They need the proper support so they aren’t tokenized.”
3. ERGs can build a divisive environment.
If an ERG continues to not receive support from the company’s senior leadership, its members may feel even more underserved than before. If an employee is trying to build a community at work and is left in the dust, they might feel as though what they care about really doesn’t matter.
“The right support requires an underlying thoughtfulness that needs to go behind the organization of these groups,” said Simpson.
Khosla says that company leaders need to be open to listening, as much as they are to guiding, ERGs.
4. ERGs can be an additional burden on marginalized groups.
The work to run an ERG is tiring. While there is a high payoff when it goes well, it is a heavy lift after a long day job. One way that companies are solving for that is compensating leaders who are running these groups. Yet, only about 5% of companies actually compensate ERG members for the very tangible benefits their work brings to the organization.
“They’re typically voluntary and not paid,” said Khosla. “The reality is these folks are committing a significant amount of time in building the culture and building a space that is inclusive and celebrates diversity. Some companies choose to recognize they value this and pay a stipend.”
If an organization isn’t able to financially support with a stipend, they could lessen that burden by providing financial support for events that they hold.
“If they don’t, ERGs then have to go and negotiate and are asking for favors,” said Khosla. “It reinforces this idea that it’s not worth paying. That is the biggest danger of it.”
Additionally, Khosla argues that there should be a clear understanding of what ERGs’ roles are versus HR. While ERGs can help build community, it’s up to HR to ensure there is no bias in systems.
“It’s better that ERGs see themselves as the voice of the community, sharing that insight back with the HR teams, but the HR teams are the ones that have the skills and the tools and resources and company-wide reach to make large, broad systemic changes,” said Khosla. “You almost honor the skillsets of the two different groups.”
Outlining this could help workers leading ERGs better understand that it isn’t up to them to solve everything. Khosla says that ERG leaders should focus on creating the group, driving membership, and sharing learning resources.
“It’s important to not put the burden of learning onto the ERG for the rest of the organization,” said Khosla. “That can create misaligned expectations.”
5. ERGs can give the false impression that all diversity issues have been solved.
It’s true that ERGs can help move the needle. Benevity’s report found that 97% of employees agree ERGs help make the workplace more equitable and inclusive. However, they need to be paired with other efforts to make the workplace truly inclusive and welcoming.
“For example, if the only time you are giving your Black ERG money is for Black History Month, that’s a fail,” said Simpson. “If the only time you are giving your API ERG funding is for API History Month, you’re failing.
Simpson says it’s important to ensure that the commitment is brought through the entire employee experience, not just for special cultural events, especially because it ties back into tokenism and reinforcing stereotypes.
“Understand that proper support here all around is what will make these groups successful and without it, they will inevitably fail,” said Simpson.