Employee resource groups: The ultimate guide for small businesses

As a small business owner, tackling workplace diversity, equity, and inclusion can feel daunting. And we get it—from payroll to employee scheduling, you’re covering a lot of ground already. But since DEI in the workplace is more important than ever, we’ve got the secret weapon for leveling up workplace DEI in your hourly teams: employee resource groups.

Sure, employee resource groups (or ERGs) might sound like some corporate mumbo jumbo. But hear us out—they aren’t just for large companies anymore.

The right ERGs can be game-changing for your business. They’ll help you improve employee engagement, boost company culture, and above all, nail your workplace DEI. The best part? You’ll be able to do it all without hiring an HR or DEI department.

It almost sounds too good to be true, but we promise, it’s not. So let’s dive into everything you need to know about ERGs for small businesses.

What is an employee resource group (ERG)?

Employee resource groups (ERGs) are employee-led communities within a company made up of team members who share similar interests, traits, or backgrounds. 

The goal of ERGs is to improve workplace inclusivity and to provide a support network for employees. That’s  why you’ll often see them as part of workplace DEI strategies. You may also hear ERGs referred to as affinity groups or employee network groups.

ERGs are led by volunteer employees and are made up of team members who identify as part of the group. Many ERG groups will also welcome allies to help extend their reach.

Benefits of employee resource groups 

90% of Fortune 500 companies have employee resource groups within their organization. 

Coincidence? Probably not.

Large companies have embraced ERGs because they offer a huge number of benefits for employees and the company. But you don’t have to be a Fortune 500 company to see the impact of ERGs.

Let’s explore some of the biggest benefits of employee resource groups.

ERGs foster better employee engagement and belonging

There’s something comforting about being around people with similar lived experiences. ERGs are excellent support networks for employees. Whether it’s connecting, sharing tips, or even commiserating, ERGs offer a safe space for employees of similar backgrounds.

Employees who are part of an ERG are more likely to feel included and that their experiences are validated. This creates a sense of belonging with the rest of the team, which can improve employee engagement.

The proof? 91% of employees who feel a sense of belonging in the workplace are engaged in their work. ERGs in particular have been known to improve employee engagement by as much as 15%.

Plus, when ERGs are formally backed by a company, it reinforces that employees within that group are welcome within the organization. For example, if you formally recognize a BIPOC ERG, it signals to your employees that your organization welcomes and supports employees who identify as BIPOC. This type of employee belonging has been linked to a 50% drop in employee turnover, meaning employees are more likely to stick around longer.

ERGs create visibility for underrepresented employees within the company

There’s power in numbers and that holds true for ERGs. 

ERGs bring employees together and provide a formal platform for them to showcase their skills, knowledge, and contributions. Whether it’s events or targeted networking, these are opportunities for employees to make connections that may not have previously been available.

When employees are given the chance to shine, they’re more likely to put themselves forward for promotions and new roles, or even take on new projects in the workplace. And of course, this makes for happier and more productive employees.

ERGs offer a platform for employees to advocate for equity and inclusion 

ERGs are often leveraged employees in underrepresented communities who might experience barriers at work. It creates a space where diverse employees can express concerns from their unique perspectives. 

Think about it. If you’re just one person, it can be scary to go to a manager and voice your concerns. But employees usually aren’t alone in their experiences, so an ERG can amplify the voice of individual employees and give them a platform to advocate for change.

Whether it’s more inclusive benefits and employee policies, or equitable opportunities, ERGs represent the best interest of the group members. Together they can build a strong case for why changes need to be made and how your business can approach them.

We get it:  the thought of having an ERG highlight shortcomings or areas of opportunity in your business can be absolutely terrifying. However, it’s the only way you’ll be able to create a truly inclusive workplace for your team. 

ERGs improve diversity across your team (and beyond)

Your customers are diverse, which means your team should be too. It’s no secret that diversity is important and beneficial in businesses of all sizes. 

But when it comes to DEI, you can’t just say you want to prioritize diversity. You need to walk the walk. ERGs are an actionable solution for putting diversity and inclusion front and center. It shows that you’re elevating diverse communities and want to support their goals. In fact, studies have found that ERGs help build a workforce that’s similar to that of their customers. 

ERGs can also help improve diversity in your hiring strategy. Formally supporting ERGs can show potential candidates that you’re committed to diversity and inclusion, so they know they’ll feel welcomed at work.

But it’s not just your team. ERGs have been shown to help organizations bring on more diverse suppliers too.

The role of employee resource groups for small companies 

A quick Google search of “employee resource group” will tell you that they’re much more common in large enterprise companies. And if we’re being completely honest, ERGs in your small business won’t look exactly the same as those at a massive corporation.

But that doesn’t mean an ERG  won’t still make a major impact in your small company.

Creating a more well-rounded employee experience

Nailing the employee experience can be tricky if you don’t have a dedicated HR team, but ERGs can help do a lot of the heavy lifting. That’s why they’re almost more important for smaller, hourly teams.

Of course, your employee resource groups might be smaller and you might have fewer ERGs overall. But the benefits can pay off big time.

For example, in a larger organization, HR might be responsible for creating networking opportunities or facilitating cultural celebrations. But with an ERG, you’ll have employees who can volunteer to put together those events or activities. 

It’s not about passing the buck to your employees. Rather you’re empowering them to create a work environment that they actually want to come to every day.

Opportunities for career development and growth

We know that learning and development opportunities are key to fostering better employee engagement. But with hourly teams, it’s not always easy to offer promotions or even opportunities to build new skills.

ERGs give your team the chance to take on leadership roles that may otherwise be unavailable. They’ll be able to develop leadership skills and create a sense of ownership within your company, which can help improve retention rates and employee engagement.

Types of employee resource groups 

If you can think of it, there’s probably an ERG for it. They can be identity-based, need-based, or even interest-based.  Some common types of employee resource groups you’ll see in businesses include:

• Women’s resource groups
• LGTBQ+ resource groups
• BIPOC resource groups
• Parent resource groups

The groups that will benefit your business the most will ultimately depend on your employees. 

Creating (and managing) employee resource groups

While employee resource groups are employee-led, it’s up to you to get the ball rolling. As a company, you should set the parameters for how new groups get created and help your employees get started—especially considering many of them may have never been a part of an ERG before.

Let’s break down some of the ins and outs of creating and managing employee resource groups.

1. Employee resource group roles and responsibilities  

ERGs aren’t just gatherings of random employees. In order for an employee resource group to be effective, it needs to have some structure. And that starts with designating key roles within the group. These are the leaders who help keep the group running.

Some common roles in ERGs include:

• Chair: The Chair is the leader of the group and is responsible for holding meetings and leading group activities.
• Vice-chair: The Vice-chair supports the chair in fulfilling their responsibilities and can also step into the role of Chair when the Chair is unavailable. 
• Treasurer: If an ERG has a budget to manage, it will need a treasurer to watch over the finances. 
• Advisor: Some ERGs may have an advisor who is also an executive or leader in the organization. They can help facilitate communication between the company and the ERG.

In smaller ERGs, one individual may take on multiple roles. The specific roles and responsibilities will often vary depending on the needs of the group. 

So: how do you determine who takes on each role? Typically this is decided by members of the group. But the exact process for how roles are filled is typically outlined in the ERGs charter.  (More on those later!)

2. Employee resource group activities and functions

ERGs tend to wear many hats; they’re almost like a small organization within your company. While they are a support group and network, they’ll often bring together group members or even other employees to participate in or host activities. 

Some ERG events are private, meaning they’re only open to members. But some events may be open to all employees at the company or even the local community.

Some common ERG activities and functions include:

• Networking events: This includes opportunities to build connections with other employees or leaders in the industry.
• Professional development opportunities: This can include educational events, webinars, or lunch and learns that can help elevate employee skills and their careers.
• Volunteer activities: ERGs may take time to give back to their community through planned volunteer work.
• Cultural celebrations: Groups will often plan celebrations in recognition of calendar events that relate to the ERG. For example, an LGBTQ+ ERG may organize Pride Month celebrations.
• Fundraising to support the group: While all ERGs are formally recognized by the company, some organizations may not have the means to fund their employee groups. This means some ERGs may run fundraising events to pay for group activities or other employee resources.

3. Employee resource group charters 

A charter is a fancy and formal word for a set of guidelines. It outlines roles, responsibilities, goals, and rules to help everyone stay on the same page.

ERG charters are helpful for making sure that the group runs smoothly and that it continues to work toward its objectives. Otherwise, your ERGs might feel a bit like the wild west—which can make them ineffective and unproductive.

Generally, charters include details like:

• Objectives
• Membership criteria
• Roles and responsibilities
• Core ERG activities
• Processes for selecting leaders and filling key roles

4. Employee resource group best practices

As your business’s ERGs start to get into the swing of things, there are some best practices to keep in mind:

• Let the group lead: ERGs should be employee-led, so let the group make their decisions. This helps ensure that ERG is prioritizing the needs of the group members instead of what others want them to focus on.
• Keep it volunteer-based: While ERGs can benefit your business, they’re only effective if employees decide to join and take ownership themselves. Volun-telling employees to participate doesn’t quite have the same effect. You shouldn’t be paying employees to lead ERGs either. When ERGs aren’t volunteer-led, you run the risk of leaders joning for the wrong reasons and not putting the needs of the community first.
• Measure objectives: Running ERGs is serious business. It takes effort, time, and resources to get it right. That’s why it’s important to keep track of metrics like participation rates, diversity rates, and employee happiness. It’s not enough to hope for the best, you need to measure the impact.
• Provide financial support: Unfortunately, few things are free these days. Where possible, help your ERGs thrive by providing the financial support for them to run events and provide resources to their members. If not, make sure you’re doing your part to support fundraising efforts.

Ready to improve your DEI without hiring an HR department?

Homebase is the all-in-one hourly employee management tool that improves employee engagement and DEI without the hassle. With HR, compliance, payroll, and more, leveling up your employee experience has never been easier. Get started today.

Employee resource group FAQs

What is an employee resource group?

An employee resource group, or ERG, is an employee-led volunteer group within a company. ERGs are formally recognized by the company and are designed to improve inclusivity and foster community within a company. 

What is the role of ERG in DEI? 

The role of ERGs in DEI is to create a sense of belonging and foster inclusion for employees in underrepresented and diverse groups. They provide a safe space where employees can connect with other individuals from similar backgrounds and feel supported.

ERGs can be particularly valuable in improving workplace DEI in small companies, where dedicated HR and diversity roles aren’t always feasible.

What does an employee resource group do?

An employee resource group supports employees within an organization of similar backgrounds by providing professional and personal support. ERGs usually support their members by holding events and activities that meet the needs of their members. For example, networking events, professional development, volunteer opportunities, or even cultural celebrations.

What are the goals of ERGs?

The goals of ERGs will vary from group to group, but they typically include providing a support network for diverse employees, fostering inclusion, and increasing representation within a company. Their primary focus is meeting the needs of their members.

Beyond the individual groups, the goal of ERGs is to help organizations improve diversity and inclusion among their employees. The result? Better engagement rates, job satisfaction, and ultimately employee performance.