A group of employees of various ages, races, and genders stands in a semicircle with their hands together in the middle. They wear neon vests and smile for the camera.
Employee resource groups are employee-led organizations that aim to make their companies better places to work for all employees. — Getty Images/SDI Productions

Employee resource groups (ERGs) are becoming more popular as companies seek to diversify their workforces and create more inclusive work cultures. By one estimate, ERGs exist at 90% of Fortune 500 companies, and many of the companies found on the Great Place to Work ranking have active ERGs.

Employee resource groups aren’t just for big enterprises. Founding an ERG at your business can bring a dedicated commitment to inclusivity, support and mentorship to your small team.

Here’s how to start an ERG and why employee resource groups are important for businesses of all sizes.

[Read more: Diversity Leaders from WW, LinkedIn and Seattle Seahawks on Building—and Retaining—Inclusive Teams]

What is an employee resource group?

Employee resource groups are voluntary, employee-led groups that are aligned with the company’s mission and help foster a safe and supportive working environment for all employees. The goal of an ERG is to provide a safe space for employees from a specific interest group, as well as to support career development opportunities.

[Read more: The Language of DEI and the Terms Every Business Owner Should Know]

ERGs are an important ingredient in building an inclusive workplace culture. Employee resource groups serve a number of purposes. “Typically organized around a shared identity, such as race, gender, age, or mental health, they serve as a haven of belonging, offering a space for underrepresented employees to find one another, stave off a sense of isolation, and experience a reprieve from the daily aggressions they’ve endured at work,” explained Harvard Business Review.

There are benefits to bringing an employee resource group to your organization. These groups are shown to lead to higher employee engagement and retention, as well as to help business owners identify and mentor up-and-coming leaders. ERGs can help attract candidates during the recruiting process and diversify your talent pipeline. And, of course, ERGs play an active role in creating a workplace culture that’s positive for everyone.

How to start an ERG

Though ERGs are voluntary organizations run by employees, they do need institutional support. Starting an ERG requires buy-in from leaders and from team members.

“Effective ERGs are both top-down and bottom-up,” writes Great Place to Work. “First, the executive management team needs to fully support, fund and endorse any ERG. One best practice is to ensure that each ERG has a senior leader as their executive sponsor and full participant.”

Leadership support is crucial to ensuring the ERG is successful. Without funding, mentorship and career opportunities, an employee resource group will be limited in what it can achieve.

Each ERG has a unique need and style — this should be valued and not compared.

Laura Folks, Inclusion Resource Group (IRG) Program Managers, Indeed

One of the best ways to recruit senior management buy-in is by aligning the goals of the ERG with the mission and values of the organization from day one. Start by assessing which groups are underrepresented or represented well within the company. Are there retention issues with millennials? Are you having trouble recruiting women? Dive into your HR data to see which groups may be best served with more investment.

ERG goals should align with the company goals and needs. Balance the company goals with the needs of the group. A good place to start is by soliciting input: What do group members feel they would most benefit from?

“Once you’ve articulated your mission and purpose, establish a structure that will help you reach your goals. You can start by outlining the roles and responsibilities of ERG leaders, executive sponsors and volunteers, and setting standard operating procedures — like meeting cadence and terms of service,” write the experts at Indeed.

Align on your big vision within the group, and then set some smaller goals that help you reach the biggest outcome. “New ERGs don’t need to ‘catch up’ to others that may be more advanced,” said Laura Folks, one of Indeed’s Inclusion Resource Group (IRG) Program Managers, in a recent blog post. “Each ERG has a unique need and style — this should be valued and not compared. I recommend allowing each group to find what drives them. In year one, it's completely fine to do social events and build the community. Anything else is icing on the cake.”

A good first-year ERG goal is to build membership and awareness. Some ERGs encourage allies to join; others focus on connecting within their own interest group. Inclusivity is the ultimate goal here. For instance, even if your women’s ERG is not open to men, remember to bring in all women’s perspectives and include women of different races, religions and sexual orientations. How can you create an ERG that’s empowering and supportive?

CO— aims to bring you inspiration from leading respected experts. However, before making any business decision, you should consult a professional who can advise you based on your individual situation.

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