The most recent jobs report continues to show a robust labor market that is paradoxically characterized by low unemployment while record numbers of Americans are looking for new jobs. In this talent-hungry world, organizations are fighting significant foreseeable headwinds for attracting and retaining top talent (especially diverse talent). This is an opportunity to leverage Employee Resource Groups (ERGs) for talent retention.
ERGs History
ERGs have been around since the 1970s. Their original goal was to provide a safe place for diverse groups of historically marginalized talent to have community and support. ERGs have since evolved to reflect broader goals to educate others in the organization, connect with the local and global communities and even help with business problems.
ERGs Today
ERGs are continuing to evolve today. According to Changeforce’s latest ERG report, companies are increasingly viewing ERGs as valuable talent-development mechanisms. ERGs are pivoting from “nice to have” to “must have” in organizations by shifting from:
- a community or support system to a more strategic role as a customer driver
- an event-based platform to a broader value proposition
- an internal-only focus to more focus on external communities
These pivots are important to consider as ERGs could add significant value in addressing business problems such as talent retention. By empowering ERG leaders, the organization and employees can gain value together through better alignment and partnership.
Three Strategies to Retain Top Talent
From their data, Changeforce further advocates that, “Companies should tap into ERGs and utilize these powerful networks to invent new go-to-market strategies, new products and new talent pipelines that align with the business strategy.”
Align with the Business Strategy
ERGs are in a unique position to help businesses solve challenging problems, and each ERG typically has a business problem, such as talent retention, they’re actively trying to solve. This gives ERG members meaning and purpose in their often-voluntary work, with tangible outcomes tied to the business.
When ERGs are aligned with the business strategy, it’s a lot easier to defend their budgets and efforts. This is why it’s key to have an executive sponsor as a member of the senior leadership team who is engaged in the ERG planning and advocates for support throughout the organization. A charter is also helpful to document how the strategies of the ERG are tied to business outcomes. Essentially, ERG leaders should be continuously asking the question, “How does our ERG help solve business problems?”
When ERGs are aligned with the business strategy, there is a natural evolution to help with problems like talent retention. When employees know there is a community where they can be supported or be an ally for someone of a different background, it further engages them and decreases their likelihood of leaving. In fact, a recent Salesforce study found that 75% of companies with ERGs listed employee retention as a benefit.
Engage in Innovation
ERGs can directly impact the business and boost engagement through participation in research and development. ERGs often have a diverse perspective that’s not reflected in the leadership team or in pockets of the organization that have more members from the dominant group (i.e., white men) such as engineering or finance.
By inviting the perspectives of ERG members into conversations about product and service development, organizations can better innovate to align with the needs of diverse groups of consumers. Women make 85% of consumer-spending decisions, and organizations are generally 75% white-male-led. This creates a disconnect and an opportunity to engage women and other historically marginalized groups in the innovation process to better meet the needs of customers.
Elevate in Performance Reviews
ERG leadership and participation should be valued in performance reviews. If it’s important to the organization, it should be important for someone’s career development. Sadly, many ERG leaders and members are seen as voluntary labor and are not given credit for the hours they spend in addition to their regular job duties. People should get credit for these activities, and at a minimum, should have time freed up to spend on these activities. If it’s important for the business, ERG work—like any other activity—should be prioritized and rewarded.
ERGs play a vital role in creating inclusive workplaces, attracting and retaining top talent, fostering innovation and aligning with business strategies. By empowering ERG leaders and aligning with the business, companies can unlock the full potential of their diverse workforce.