The Rise of ERGs: Driving Inclusion and Engagement in Fortune 500 Companies

How Pride and Cultural Celebrations through ERGs Create a Welcoming Environment and Boost Performance

Today, 90% of Fortune 500 companies have Employee Resource Groups (ERGs). Among those companies, about 8% of the employees on average participate in an ERG and that number is climbing.

ERGs are communities of workers within a company that have shared identities and interests. Typically organized around gender or race, many companies also have ERGs that represent the LGBTQIA2S+, Veteran and Neurodiverse communities.

These internal groups can be a haven of belonging for many but also play an important role within their companies. Their existence allows employees, especially those from marginalized groups, to be heard, to be valued, and to be engaged within their companies.

The first official ERG in the U.S., was started at Xerox (XRX) called the Xerox National Black Employees Caucus, created in 1970 as a way for Black employees to advocate for inclusion and change within the company.

The direct advocacy between ERGs and their companies can lead to the type of change that is beneficial for both the company and its employees. One example of this is AT&T's ERG, The NETwork, which consists of over 11,000 members with a goal to promote the African-American experience at AT&T and pursue inclusive opportunities to unite all who share the core values. AT&T (T) reported that it has had an 86% retention rate among its Black employees since starting the ERG in 1969.

Good for Employees

Another way that companies and ERGs help create a welcoming work environment for their employees is by celebrating Heritage Months and other multicultural events. “AAPI month tends to sneak up on me every year”, said Amy Yin, Director of Product at Envoy, a leader in managing hybrid workplaces. “That’s why I'm grateful to have worked at companies like Envoy that make a point to celebrate it. It’s a reminder of my family at home and back in China and how proud I am of my heritage (and delicious Asian food!).”

Yin spoke with Built By Girls for the video series “How I Started in STEM” to discuss her career as an Asian American woman in STEM and give insights on how companies like Envoy celebrate heritage events such as Asian Pacific American Heritage Month.

“I love that my company Envoy not only celebrates diversity, but funds our employee resource groups and company-wide initiatives that focus on AAPI education and having fun together in the office. In the past, we’ve had potlucks, speaking events, boba runs, movie nights, and Asian-themed swag like sweatshirts or stickers (Btw…I treasure my boba sticker).”

Celebrating cultural events like APAHM in May and Pride in June are ways companies can connect with their employees through the ERGs. In a survey of 400 women who worked at companies that have ERGs 85% of respondents said that participating in their ERG benefitted them and their career.

Creating a welcoming and safe environment for all people allows for a more diverse workforce. And stats show that a diverse workforce is good for business.

Woman addressing her ERG in a conference
Woman addressing her ERG in a conference

Good for Business

According to a study conducted by McKinsey & Company, organizations with diverse workforces are 33% more likely to outperform their competitors. It found that the greater the representation, the higher the likelihood of outperformance. Research also showed that companies with more than 30% female executives were more likely to outperform companies where the percentage ranged from 10% to 30%.

A study by Deloitte found that organizations with inclusive cultures are twice as likely to meet or exceed financial targets. ERGs can spark innovative ideas and initiatives, leading to improved business outcomes. For example, Ford Motor Company's Women of Ford ERG has been instrumental in driving innovation in product design and marketing, resulting in successful campaigns targeting female customers.

“Diversity and inclusion here at Ford is the real deal and that expands to women'', said Maria Rodriguez, Electrification Product Manager at Ford via the Women of Ford ERG website. “You see women in positions of power, you see women in management, we've built a culture that is very comfortable and empowering to work in and there's just room to grow.”

Senior Manager of Global Diversity Equity and Inclusion at Ford (F), Amal Berry, is also a member of the Women of Ford ERG and is thankful for the culture that has been created and fostered by the company.

Ford recently launched the company's 12th ERG. Having a larger number of ERGs at a company can be a useful tool as many people do not identify as one race or other identity markers.

In fact, according to McKinsey research, intersectionality is likely to become a more significant topic for ERGs as recent US Census data show a 276% increase in people who self-identify as multiracial since the 2010 census. Jumping from 9 million people in 2010 to 33.8 million people in 2022, or just more than 10% of the United States' population.

“Being able to have impact both globally and locally has allowed me to gain some awareness and knowledge that I probably would have never had had I not been supported by both leaders and peers in helping me develop as an employee at Ford,” said Berry.

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