Employee resource groups (ERGs): Overrated or underused?

Employee resource groups (ERGs) often get a bad rap.

To skeptics, they seem like a budget line item with unclear ROI. That they’re costly programs with feel-good goals but no direct connection to business outcomes. Critics might say ERGs are more about optics than action, and more about events than employee impact. Well, hey. In some organizations, they may be right.

But when thoughtfully designed, strategically supported, and intentionally aligned with learning and business goals, ERGs are far from fluff. They’re essential tools for connection, capability, and culture. And yes, company performance.

In a tight labor market where retention, onboarding, and engagement are critical, overlooking ERGs means leaving value on the table.

Here are the facts:

• 90% of Fortune 500s use ERGs to support new hires during onboarding | McKinsey & Company
• 75% of companies with ERGs list employee retention as a benefit | Forbes
• Employees who consider their ERGs effective report higher inclusion scores (83%) compared to those who view them as ineffective (59%) | McKinsey & Company

So why aren’t companies investing in ERGs strategically?

Because most HR, L&D, and DEI leaders are stretched thin with onboarding, adapting to AI, and closing skills gaps. They’re left asking: Are ERGs just another box to check, or a hidden asset we haven’t fully tapped into yet?

Let’s weigh the pros and cons.

What is an employee resource group (ERG)?

ERGs are voluntary, employee-led communities built around shared identities, experiences, or passions. Originally rooted in social advocacy and inclusion efforts, today’s ERGs have evolved to drive outcomes in culture, engagement, and learning.

When they’re set up thoughtfully, ERGs can make a real impact on business goals. They help underrepresented employees feel more included, attract and retain diverse talent, and even bring new perspectives to your business.

Take it from Brian Page, Director of Learning and Development at Aaron’s. In the second episode of the Return on Intelligence podcast, he noted the importance of problem-solving with diverse perspectives to deliver long-term impact.

Here’s what Brian had to say:

Watch the full episode

In recent years, some ERGs have become more structured. Many now have defined missions, governance models, an ERG platform, and strategies to support DEI goals. But despite that progress, there’s a gap. While DEI ambitions are high, most still don’t have the systems in place to back those goals up. Too many ERGs still aren’t fully empowered and embedded in business strategy.

5 types of ERGs to enhance diversity

Managing inclusive ERGs is about creating community and allyship for your employees’ lived experiences. And it’s quickly becoming a necessity to welcome and retain the best talent. In The Rise Journey’s 2023 State of the ERG report, they found more organizations are working to align ERGs with employee interests and workforce demographics.

The staggering growth in ERG representation includes:

• LGBTQ+ ERGs present in 89% of companies, a 16% increase from 2022
• ERGs for women and Black or African American employees rose to 75% and 56%
• Disability ERGs saw an 18% increase, reaching 39%

Your workforce has unique needs, and your groups should reflect that. Let’s explore the five categories in detail.

1. Identity-based ERGs

These groups offer a space for employees who share a core aspect of their identity to find support, amplify their voices, and advocate for change.

Examples include:

• Black, Latinx, or Indigenous networks: These ERGs often organize cultural events, support leadership development, and serve as internal consultants for inclusive practices.
• LGBTQIA+ communities: May lead Pride initiatives at work, push for policy improvements, and support LGBTQIA+ inclusive benefits.
• Women in leadership: Often focus on networking, mentorship, and overcoming barriers to advancement.

2. Ability and accessibility ERGs

These ERGs center around physical, mental, or neurological differences and the effort to remove barriers in the workplace.

Examples include:

• Disability inclusion groups: Advocate for accessible technology and physical spaces.
• Mental health groups: May lead initiatives during mental health awareness month or host regular open forums.
• Neurodivergence networks: Can shape hiring and onboarding to be more inclusive of different thinking styles.

3. Generational or life stage ERGs

These groups support people going through similar life experiences or career stages.

Examples include:

• Young professionals: Help new hires acclimate and build leadership skills.
• Working parents: Share resources like childcare referrals and flexible scheduling policies.
• Experienced professionals: Serve as mentors and contribute to legacy-building initiatives.

4. Cultural or heritage-based ERGs

These ERGs honor and elevate cultural awareness in the workplace.

Examples include:

• Hispanic Heritage month committee: Coordinate events and highlight cultural contributions.
• Asian Pacific Islander ERGs: May create educational resources or lead community engagement.
• Indigenous groups: Support visibility and cultural education.

5. Interest or purpose-based ERGs

These ERGs form around shared passions, goals, or causes beyond identity.

Examples include:

• Sustainability groups: Lead recycling programs or carbon footprint reduction efforts.
• Volunteerism teams: Organize donation drives or days of service.
• Innovation clubs: Explore future tech trends, tech demos, or hackathons

No matter the type, each ERG can help create a more dynamic, inclusive, and connected workplace.

ERGs: Overrated or underused?

Resource groups may be on the rise, but does that mean they’re always effective? It’s a fine line between investment and risk. Here’s why, and how not to miss out on the incredible value.

Why ERGs can be overrated

ERGs have great potential, but that doesn’t mean they’re immune to problems or negative perception. Sometimes, resource groups are launched for optics without a plan or resources to succeed. When organizations treat ERGs as side projects or social clubs, participation wanes.

Other pitfalls include:

• When they’re used as a PR move: ERGs can come across as insincere when they’re created as a reactive or proactive way to position a company’s brand.
• When they lack clear impact: There’s no strategic alignment with business goals.
• When ERG leaders are overburdened: ERG leaders are volunteers who contribute to business goals, often without a stipend or compensation.
• When too many exist without focus: Niche groups without a vision can stunt your momentum and devalue your investment.
• They become event-centric: They prioritize fun events over long-term impact.

ERGs can appear overrated when poorly resourced, unsupported, or misaligned. But these pitfalls often reflect execution, not potential. In a survey by ACCP and Salesforce, 96% of respondents shared that their ERGs are “very effective” or “somewhat effective” in achieving their goals.

Respondents also saw a boost in company culture, employee well-being, and retention. Results! All you need is the right support for ERGs to transcend tokenism and become business-critical assets.

Why ERGs can be underrated

Despite their challenges, ERGs are still one of the most untapped drivers of talent and culture strategy. They’re often overlooked simply because organizations don’t fully understand how to put them to work.

Here’s how they shine:

• They become talent development pipelines: Fuel career development with real-world leadership experiences.
• They enhance belonging: Drive cultural shifts with inclusive programming and policy input.
• They turn into innovation hubs: Offer business insights that help with product development and customer outreach.
• They facilitate cross-cultural collaboration: Host company-wide Q&As, webinars, and awareness events to diversify how employees network.
• They support change readiness: Bring communities together to adapt to change, such as AI, through perspectives they can relate to.

When integrated with your company’s learning, talent, and innovation strategies, ERGs become more than communities. They’ll shift from employee spaces to change agents for digital and cultural transformation.

Deloitte’s big return to ERGs

Back in 2017, Deloitte decided to retire its traditional ERGs in favor of broader “inclusion councils.” The idea? To move away from identity-specific groups and create a more unified approach to inclusion.

But the change didn’t land well. Many employees missed the safe spaces ERGs offered. Underrepresented groups were left to seek mentorship, support, and shared experiences.

Fast forward a few years (and after a wave of social movements), Deloitte listened. Their team brought the groups back and began to promote the hidden strategic value of resource groups.

The takeaway? Inclusion isn’t either/or. It’s both a shared responsibility and a dedicated space for identity.

Measuring ERG impact: The 4 C’s framework

A successful ERG strategy is not unlike a training strategy. You’re aiming for continuous, sustainable engagement to make a real impact on outcomes.

The four C’s ERG framework helps us focus on the tangible business value of ERGs, rather than creating groups for engagement’s sake. The framework includes career, culture, commerce, and community to get you thinking about ERG’s impact and how to measure success.

Want to create an ERG that resonates with C-suite and employees alike? Let’s break it down with examples and practical ways to tie them to company goals.

Career

ERGs aren’t just about identity. They’re also leadership labs. They give members a place to build confidence, take on responsibility, and grow. Think of an early-career Black employee who leads a Black employee network event. That’s public speaking, project management, and team leadership skills rolled into one.

Examples of ways to measure ERG career growth:

• Include at least one ERG leader in succession planning
• Launch two peer-led skill-sharing sessions per quarter
• Track the percentage of ERG leader promotions
• Compare the promotion rate of ERG members vs. non-members
• Measure the percentage of ERG-led mentorship pairings per quarter
• Track the increase in internal mobility among ERG members

Culture

Culture is where ERGs truly shine, and it’s not by accident. They create spaces where people feel seen and heard. When LGBTQIA+ employees bring their full selves to work, it sends a message to everyone: authenticity belongs here. ERGs can also help bridge cultural gaps, especially in global or remote-first teams.

Examples of ways to measure cultural improvements with ERGs:

• Improve inclusion scores on engagement surveys by 10%
• Co-host biannual DEI workshops with HR
• Segment inclusion scores by ERG participation
• Track participation rate for ERG events
• Improve employee engagement scores by 10%

Commerce

Here’s where ERGs move from “nice-to-have” to business-critical. Some of the most innovative product ideas come from employee insights, especially from groups that reflect your customers. For example, a Latinx participant might suggest culturally relevant messaging that helps expand into new markets. Or a participant with a disability might flag accessibility issues that impact user experience.

Examples of ways to measure the business value of ERGs:

• Collect and present ERG feedback quarterly to CX or product teams
• Host listening sessions with leadership on employee needs
• Track the percentage of product or policy updates tied to ERG input
• Measure the percentage of innovative ideas submitted through ERGs
• Monitor increases in customer satisfaction for affinity-aligned segments

Community

ERGs also connect people to each other and to the world outside of work. Whether organizing a Pride fundraiser, volunteering as a team, or building relationships with local nonprofits, ERGs help employees see how their values align with the company’s. It’s a powerful way to build loyalty and purpose.

Examples of ways to measure the value of community in ERGs:

• Host three volunteer events annually
• Establish partnerships with one external organization per ERG
• Track the number of community events or total volunteer hours
• Measure cross-functional participation
• Collect member satisfaction scores for ERG-sponsored events

Diversity and inclusion initiatives bring culture to life. When employees can share who they are, it creates belonging. From a Diwali celebration to a discussion on neurodiversity, engagement and retention will thrive when you spotlight employee experiences.

ERG lifecycle management: 6 common challenges and solutions

Launching an ERG is one thing; sustaining it is another. Many organizations start strong but struggle to maintain momentum, measure impact, or keep members engaged over time.

Like any initiative with long-term goals, ERGs go through cycles: growth, plateau, and sometimes decline. To help, we’ve listed the most common challenges ERGs face and practical solutions to manage the more uncomfortable realities (like internal conflicts).

Challenge 1: Defining the value

Many ERGs launch with energy but lack clear alignment to business outcomes, leading to confusion about their purpose. This can discourage leaders from giving you the resources to help you thrive. More importantly, employees might feel the purpose of the identity group is to promote inclusion, rather than to make a real impact on belonging in practice.

Solution: Tie ERG goals to strategic objectives in the 4 C’s, as laid out above. Collaborate with DEI, L&D, and the C-suite to align on what you want to achieve.

Challenge 2: Gaining leadership support

Without leadership buy-in, ERGs can struggle to secure budget or influence, but it might not be as difficult as you think. In 2023, 28% of organizations increased their ERG investment by 22%, with an average budget of $20,000–$50,000.

Solution: Use the 4 C’s to show leadership the value of ERGs across functions, appoint executive sponsors, and show them successful examples of ERGs.

Challenge 3: Recruiting leaders and members

Without a solid plan for ERGs, it’s difficult to answer the silent question employees ask themselves: “What’s in it for me to participate?” Employees are already navigating burnout, workplace culture, and personal commitments. Without clear value or incentive, it’s hard to recruit and retain leaders (and members).

Solution: Position ERGs as leadership development incubators and offer participants stretch opportunities, recognition, and visibility.

ERGs give your underrepresented employees a seat at the table, shaping conversations about product, brand, and inclusive project management. It’s real experience that strengthens your next generation of leaders.

Challenge 4: Creating value for employees

Already defined the value of each group? That’s just the beginning. Your ERGs can be clearly defined, but still feel irrelevant to their intended audience. To keep the momentum, you need to raise the stakes.

Belonging and career growth are intrinsically linked. ERGs deepen both, especially when employees see a clear path to connection and advancement.

Solution: Take suggestions in a survey before launching the group, and offer identity-based mentorship within each group.

Challenge 5: Showcasing impact

ERG work often goes unnoticed without structured reporting or storytelling. Although it’s challenging to measure the full impact, your existing key engagement metrics can be used as indicators.

Solution: Track participation, impact, and alignment with business goals. These include member participation, workforce involvement, event attendance, and progress toward goals. You can also integrate your ERG platform and HCM/HRIS to get advanced insights on employee engagement.

Challenge 6: Navigating conflict and evolution

ERGs can evolve or dissolve. They may experience internal conflict, identity shifts, or stagnation. And without a framework for resolution, ERGs can burn out or fracture.

Solution: Start by giving each group a clear charter—something that spells out why the group exists and how it’s structured. From there, set ground rules for open, respectful conversations. Establish a clear path for handling conflicts if they come up.

To keep things moving forward, check in regularly with feedback loops. Use surveys to see what’s working and what’s not. And don’t forget about the ERG leaders. You can rotate leadership so no one burns out, retire inactive groups, and consider offering a stipend or other recognition. Most importantly, make sure leaders have a solid support system around them.

Healthy ERGs are dynamic. They lead with support, feedback, and flexibility so they can grow alongside your workforce and make a lasting impact.

The verdict is in: ERGs are underused, underfunded, and underestimated

If your resource groups aren’t delivering impact, it’s not time to write them off but to reimagine their value. Too often, companies treat ERGs as feel-good initiatives or check-the-box DEI tactics. But when managed strategically, ERGs are so much more.

They’re leadership incubators. Culture builders. Innovation engines. Community connectors.

Tie ERGs to your bigger strategy. Integrate them into your talent and learning plans. Define their purpose. Align them to business goals. Then, give them data and the support to act on it. The question isn’t whether you can afford to support ERGs. It’s whether you can afford not to. Now’s the time to stop asking if ERGs are worth it and start embracing them as a part of your business strategy.