Special-interests groups among employees are not only making a comeback in corporate America, but the groups are also receiving significant financial support from employers, finds a new study by Mercer.
The groups, which are called employee resources groups (ERGs), are worker coalitions within a company, especially large ones. They are also known as employee networks and affinity groups and are based on race, ethnicity, religion, gender and sexual orientation.
In surveying representatives from 64 organizations with ERGs, Mercer analysts found that most groups focus on women (93%), race/ethnicity (90%) and lesbian/gay/bisexual/transgender (84%).
ERGs, however, can also bring together workers concerned about other issues. For example, survey participants reported that such groups also focus on disability (52%), generational concerns (48%), multicultural issues (43%), working parents (35%), military service (34%), single religion (16%), adoptive parents (13%) elder-care responsibilities (11%) and interfaith (9%).
"For 30 years, ERGs have helped women, ethnic minorities, gays and lesbians, and other demographic groups navigate the corporate world," says Michal Fineman, a consultant in Mercer’s global equality, diversity and inclusion practice and the chief author of "ERGs Come of Age: The Evolution of Employee Resource Groups."
"Many of the new generation of employees don’t tend to identify as strongly as their older colleagues with race and gender affinities, leading some to question whether ERGs are relevant today. This new study concludes that they are alive and well and, furthermore, that they can serve an important business purpose," she adds.
Most employers involved in the survey were for-profit businesses and employed 1,600 to 380,000 workers with a median of 32,000 employees. Three-fourths of the organizations were located in the United States. The survey was conducted in the summer of 2010 and included follow-up interviews in September and October.
To show their support of the groups, employers, on average, spend annually $7,203 for groups with 100 members. In some cases, employers’ annual ERG budgets can spill over into six figures, without including the cost of technology, facilities, staff support, and other non-financial resources provided to the groups, Mercer analysts report.
Respondents also reported that they have 1.4 full-time equivalent employees assigned to the management, coaching and coordination of their ERGs. Managing the groups also involves “time spent during the workday by ERG members, executive sponsors and others who coach and train ERG officers, meet with the groups and participate in events,” the study finds.
In addition, membership rates in the groups vary from less than 1% to more than 20% of employees worldwide, according to the research. About 8.5% of employees in US-based companies and 4.3% in organizations located outside the United States belong to one or more ERGs.
"Three trends appear to account for the rebirth of the ERG movement in large firms," says Fineman. "First is the emergence of the 'millennial generation', whose members are comfortable using social media to work collaboratively. Second is the globalization of ERGs, which are drawing interest from a new potential membership base in Europe, Latin America and Asia."
She further explains that "ERGs have an increasingly business-oriented focus in their missions and activities, which earns them more respect and involvement from business leaders and gives members greater visibility in the organization."
According to the research, here are some key takeaways on creating and managing ERGs:
* The more the networks direct their attention to activities with direct impact on business results, the more successful they become at surfacing and developing talent and driving the diversity agenda. The diversity/HR function can promote the success of ERGs in all three areas by:
• Providing structures and forums through which ERGs and business leaders can interact around business issues.
• Developing tool kits and templates to help ERGs take their first steps into business-related activities.
• Partnering with HR and talent management leaders to leverage ERGs for talent (e.g., using ERG leadership positions as developmental opportunities, reviewing talent with ERG leaders).
• Harnessing the culture change potential of ERGs (e.g., engaging ERGs in climate assessment, visioning the future, giving feedback on initiatives, and communicating with employees at the grassroots level).
• Responding to grassroots calls for new ERGs aimed at inclusive constituencies, e.g., multigenerational, multicultural.
• Actively marketing the ERGs to employees and candidates.
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