How ERGs can influence your benefit strategy

Employee Resource Groups (ERGs) are not necessarily new to company culture, but their role has continued to evolve — which means employers' support for them should, too.

Today, 90% of Fortune 500 companies have ERGs, according to a recent survey from management consulting company McKinsey. Only 8% of employees typically participate in these groups, however, so employers still have a lot to learn when it comes to promoting a culture where ERGs are prioritized. 

"ERGs have always been, and still are, a place for their members to give each other support and interact with allies as well — that part hasn't changed," says Cynthia McEwen, the VP of people and head of DEI at family building solution Progyny. "But they now contribute to the bigger footprint of an organization and offer them a way to enhance their corporate culture more than leaders realize." 

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Fifty-four percent of organizations with ERGs reported an increased sense of belonging and community among employees, according to data from software company Zipdo. As a result, companies with ERGs also see higher job satisfaction, as well as a 14% increase in employee retention rates and a 7% increase in employee productivity. Additionally, 35% of companies that implement and support their ERGs also increased in size, Zipdo's data found. 

This speaks to the vital role ERGs play in a company's longevity and the untapped potential they have to drive businesses, according to McEwen. At Progyny, McEwen has championed the support and creation of ERGs to support the company's diverse demographic, and she has seen how those communities have used their platform to influence the company for the better.

"ERGs are safe spaces where employees have a voice," she says. "They're an opportunity to bring their concerns to senior leaders and executives and have them formulate plans and strategies to address them." 

McEwen shared her tips for supporting ERGs in the workplace, and why it can help shape your approach to benefits, recruitment and retention. 

How can ERGs guide the decisions leaders make about their benefits and culture? 
One of the wonderful byproducts of the growth of ERGs is the influence that they have on companies to look at and adopt new benefits and policies. Participating in an ERG should be an opportunity for its members to feel empowered to voice when a company's benefit isn't inclusive enough. 

Working at Progyny, I've had a firsthand look at how impactful ERGs can be, particularly with our current or prospective clients when it comes to what we offer them. For example, Amazon recently restructured their fertility and family building benefits through us, and that was because one of their employee resource groups brought the need up to the company's decision makers. Just being able to bring these issues to leadership and force them to rethink either what they already have in place, or investigate something that they don't have continues to ensure that companies are really offering the most inclusive benefits and policies for everyone they serve.

How do ERGs support recruiting and retention strategies?
As someone who was wearing both hats at Progyny — both on the DEI side and on the people side — I can tell you that candidates want to know about your ERG. They are incredibly interested in what groups are formed within the company that may support them and their well-being and their sense of belonging. In terms of recruiting, some companies will actually have their ERG members interview candidates, sometimes because the company is intentionally recruiting from a particular demographic. 

On the retention side, the sense of belonging candidates are looking for comes directly from having an ERG that speaks to someone's personal experience. If an employee is feeling like they are included in an organization and that an organization is interested in them and their development and their success, then they're more likely to stand with you. And it's the ERG that they belong to or that they identify with that will facilitate that environment. 

How can employers be better supporting the work their ERGs are doing?
Think about the support structure that they're investing in company-wide. One of the reasons I was hired at Progyny was to ensure that our ERGs had support, because although they're employee-led, it takes some organizational know-how to succeed, no matter how ambitious or dedicated those employees may be. For example, at Progyny we put together job descriptions for the leaders of our ERGs, so that it's clear what the expectation is around being in charge of a group that is so important to our company. The other thing is, obviously, the budget. If you want ERGs to be successful, they need to really know what resources are available for them.

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Know what their vision and their mission is. Leadership should be encouraging ERGs to come together and think about what they want to call to action and what they want to accomplish. That goes a long way to ensure that the members of ERGs are feeling that sense of purpose.

What positive impacts can ERGs have on employee engagement and performance?
First things first, coming into a new work environment can be very challenging. Having an ERG is one way for an employee to very easily develop relationships while better understanding a company's culture. As for resident employees, ERGs largely work as support groups. For instance, we have a fertility and family building support group of our own at Progyny, with individuals who are coming together with shared experiences and talking to each other in a confidential setting. They're not only developing relationships in the process, but they're also getting help with more practical and sometimes emotional things that are going on in their lives that could be affecting their physical or mental health. Having other individuals who are having those same experiences is a huge advancement in terms of how a company fosters inclusion and whether an employee or a community of employees feel like there is space for them where they work.