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August 25, 2022

5 Ways An ERG Can Benefit Your Company

Sharing ideas within an ERG

1. Increased Productivity

Employee Resource Groups (ERG) provide employees with a place of belonging, which is a fundamental human need. While U.S. businesses spend on average 8 billion dollars a year on diversity and inclusion training, they are falling short when it comes to connecting their employees. Belonging has been tied to mattering, identification, and social connection. What many companies fail to recognize is that belonging is linked to a 56% increase in job performance and a 75% decrease in sick days. ERGs are an efficient way to unite company employees, regardless of their work location. Employees feel connected to one another and feel valued at the company resulting in increased productivity. It’s no surprise that when someone is happy in their workplace, they are more likely to increase performance.

2. Increased Innovation

ERGs bring together groups of people with shared characteristics and life experiences, allowing them to intermingle and collaborate on new ideas. Many studies have shown that diverse groups are more likely to be innovative and form new ideas. Employees participating in ERGs have the ability to interact with employees from different job roles they might not have communicated with without the presence of an ERG. The employees can put their different perspectives together and collaborate on new ideas for the company’s future.

3. Company Image

ERGs often participate in community service activities or network with similar ERGs at events. A Mercer study found that 78% of respondents report an increase in corporate brand image due to community service activities. Community service was also found to be one of the most common business-related activities among ERGs. ERGs have the opportunity to speak to other ERGs from other companies, ultimately increasing company awareness and opportunities. Diversity, equity, inclusion, and belonging (DEI, B) are also important for the company’s image. A USC Marshall Center for Effective Organizations study found that ERGs play a significant role in achieving diversity and inclusion initiatives.

4. Retention and Recruitment

The key to high retention and recruitment of top talent is employees who enjoy their work environment. When employees are happy, they are less likely to look for a new job and more likely to recommend their company to others. In fact, employees with higher workplace belonging showed a 167% increase in their employee promoter score (their willingness to recommend their company to others) and a 50% drop in turnover risk. Employees with high belonging scores also received double the raises and 18 times more promotions.

5. Financial Returns

With a clear increase in productivity, reduced sick days, and a drop in turnover risk, a company with 10,000 employees would result in annual savings of over 52 million dollars. See for yourself with TaskHuman’s attrition calculator. Similarly, a study by McKinsey & Company found that companies in the top quartile for gender or racial and ethnic diversity are more likely to have financial returns above their national industry medians. ERGs encourage diversity and give their employees a place to belong and feel heard. Companies with more diverse employees are better able to retain and recruit top talent and improve their employee satisfaction.

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