Getting executive buy-in for an employee resource group (ERG) is an exercise in salesmanship. For executive leaders to jump onto the bandwagon, proponents of ERGs have to make it clear that there's a lot in it for them. ERGs use up employee time and budget, but there are good reasons companies like Ernst & Young, AT&T, and Microsoft are supporting them. 

Read on to find outs why ERG groups are crucial for today’s organizations, why they will not succeed without executive buy-in, and ways to secure the support of those all-important executives.

The Buzz Surrounding Diversity and Inclusion

ERGs are employee-led and organization-supported groups composed of people with a common interest or background, such as gender, ethnicity, race, disabilities, or LGBTQ+. ERGs work to represent and support their members through initiatives and to promote inclusive company culture. ERGs are also known as business resource groups, affinity groups, network groups, or inclusion resource groups. Ultimately, they promote a sense of belonging for a diverse workforce

There is notable buzz these days surrounding diversity and inclusive leadership in the workplace. In fact, only the most tone-deaf of executive suites could have failed to miss the concept that inclusive leadership is the path to growth.

According to the Harvard Business Review, “Inclusive leadership is emerging as a unique and critical capability helping organizations adapt to diverse customers, markets, ideas and talent.”

Supporting ESGs is one way for organizations to engage in inclusive leadership, which will improve the employee experience. However, certain requirements need to be met for an ESG to be successful. 

Related: “Inclusive Leadership: What Is It and How Do You Cultivate It?”

The Pre-requisites for an Effective ESG

A successful group is one that achieves its ERG goals. For example, a group of young professionals may strive to ensure career development, so fulfilled ERG members with a clear path to promotion might indicate success. An ESG for women might strive for equal pay, childcare benefits, or hybrid work options.

But ESGs cannot meet their goals if certain pre-requisites are not met. For example, 

1. A Core Membership Body

Without strong representation in numbers, an ESG might struggle to show that an initiative is worth pursuing or that it can be carried out. A staff survey can show how much support there is for an ESG.

2. Passionate Members

Numbers are important, but motivation and passion are equally so. ESG groups need to feel strongly that their cause needs to be supported and that issues need to be resolved. There is typically a battle to be won, and that battle requires strong messaging, courage, and definitive action.

Often, when one group is empowered, another can feel disempowered or even threatened. So, members of an ESG need the courage of their convictions to build an inclusive workplace.

3. Executive Support and Buy-in

An executive sponsor is critical if an ESG is to achieve its goals. These groups need financial and emotional support, and an executive in an ESG leadership role sends a message to the organization that the group’s causes have merit.

So, how do an ambitious group of employees with an idea for an ESG get the necessary executive buy-in and sponsorship?

How to Get Executive Buy-in for an ESG

Changes in U.S. demographics and markets are forcing changes in the culture of organizations. According to the United States Census Bureau, the nation will be “minority white” by 2045. That year, whites are expected to represent 49.7 percent of the population, and other demographics will make up the remainder. Hispanics will represent 24.6 percent, blacks will represent 13.1 percent, Asians will represent 7.9 percent, and multiracial populations will represent 3.8 percent.

Companies are realizing that employee well-being is tightly linked to productivity, innovation, recruitment, and employee retention, and it is in an organization’s best interests to encourage diversity and inclusive culture through ERGs.ERGs are found in 90% of Fortune 500 companies.

To secure executive buy-in for an ERG program requires laying out the salient points, and using data to support the central arguments. 

Here are the reasons why executives should buy into ESGs with general examples of ERGS in real work environments.

1. ESGs Boost Innovation

According to the Society for Human Resources Management (SHRM), ERGs are like business incubators. Incubators are specially designed workspaces that support startups or entrepreneurs in new product development. Incubators spawn innovation.

SHRM describes an ERG that began in 2010 composed of two marketing employees who were piloting telework. The two employees discussed how to work effectively offsite. The two were soon joined by other remote workers across departmental functions. By 2013, ORBIT (Offices Remote but Integral Teammates) as it was called, had partnered with IT and HR, and its members included 95 percent of remote employees.

Today, the ERG has more than 750 members in 21 countries and has led initiatives on virtual technology, training, and virtual leadership skills.

2. ESGs Create Competitive Advantage

ERGs give companies insights into different consumer segments giving them a competitive advantage. According to LinkedIn, at Verizon Media, ERGs are essential to product development. Products are tested among customers from different demographic groups who engage with the ERGs. The customers reveal defects and identify changes that need to be made in new products.

Also, ERGs provide insights into “cultural moments” within communities, which allows Verizon to better serve those communities and develop products that meet their unique needs.

3. ESGs Promote Productivity and Retention

The fundamental concept of ESGs is to support the inclusiveness of different demographics and communities in the workplace. If employees feel safe, included, and supported, they will be happier and more productive, and employee engagement will thrive.

ERGs can advocate for the professional development of different worker groups, make onboarding an easier and less stressful experience, ensure equal pay and benefits, provide mentorships, and promote better work-life balance. This type of support makes workers more productive and improves retention.

4. ESGs Boost Talent Management

There are two ways that ERG leaders can help a company recruit talented workers. First, the social and professional networks created by ESGs are a source of referrals. According to the website Everyone Social, employee referrals have the highest applicant-to-hire conversion rate.

While only 7 percent of applicants stem from referrals, they make up a huge 40 percent of new hires. Not only that, but companies can tap a much larger pool of potential candidates through ESG networks and their social media. 

Second, a company that supports ESGs builds a reputation as an organization that cares about the well-being of its staff, which will make it a desirable proposition for job seekers. Companies with a diverse workforce build a reputation for being a great place to work.

5. ESGs Create Wider Customer, Supplier, and Partner Networks

ERGs have strategic value. Customers, suppliers, and potential partners are more likely to want to do business with a company that reflects their demographics. People naturally feel more comfortable interacting with those they can relate to. According to HR Daily Advisor, ERGs can help a company build its customer base and reach a wider pool of suppliers and partners to fuel growth.

6. ESGs Build a Better Reputation and Visibility Through Community Involvement

ERGs connect a company to outside communities through their networks. This gives organizations a direct line to communities where they can engage in initiatives, build relationships, gain visibility, and boost their reputation. These actions promote better business all around by attracting customers, partners, suppliers, and talent.

Tailor Your Arguments To Secure Executive Buy-in

The leadership team needs to be convinced that an ERG approach is right for their organization. The above are general arguments and examples of other organizations’ experiences, but arguments should be made as to why a specific ERG will benefit your specific company. Again, use data to back up the points made.

For example, a recent staff survey might reveal that 60 percent of young professionals in your organization would like a formal mentoring program. Not creating an ERG to address the needs of young professionals will negatively affect the retention and recruitment of that demographic.

Other points senior leaders will want to see are the resource and budget implications. An ERG approach can and should start small and then build as time goes on. Building in benchmarks with metrics that show progress over time can secure ongoing sponsorship.

Bottom line. With a strong mission statement and the right presentation backed up by data, your company can build a safe space for its employees, a culture of inclusion, and positively impact its business.