A line of five people stands facing a sixth person, who stands in front of a whiteboard and speaks while gesturing with his hands. The person in front of the whiteboard is a man with dark hair and a dark beard. He wears a light blue T-shirt and blue pants with green rubber gloves sticking out of one pocket and a walkie-talkie clipped to another pocket. Three people dressed similarly stand in the line facing him; the two of them standing nearest to the viewer also hold yellow hard hats under their arms. The other two people in the line are a man in a white collared shirt and black blazer and a woman in a dark gray pantsuit over a light blue shirt. The two people in suits hold white hard hats under their arms. The room in the background is a large empty warehouse.
Members of employee resource groups can work together to solve problems and create innovative solutions while also providing a space for camaraderie to grow. — Getty Images/Drazen Zigic

Employee resource groups (ERGs) are employee-led groups designed to foster a diverse and inclusive workplace. An ERG will typically support employees who share a common identity, like people of color or employees with disabilities. Here are six ways employee resource groups can improve employee retention.

Foster inclusion

Research from McKinsey found that ERGs foster inclusion in a number of ways. The connections employees develop can help them feel like they’re part of a community and reduce feelings of isolation. They also give a voice to groups that were traditionally underrepresented in the workforce.

ERGs also help employees feel like they can be themselves, which helps them find more meaning in their work. And the systems developed through ERGs help build acceptance and camaraderie across the entire organization.

[Read more: What Is DEI? Defining Diversity, Equity, and Inclusion]

Improve diversity

When you advertise that your company has an ERG in a job posting or on a career site, it can help with your recruiting efforts. Having an ERG can help you recruit more diverse job candidates, since applicants can see you working to amplify minority voices.

And your employees who joined the ERG and feel supported may be likely to encourage their connections to apply for job openings. This is another way you can attract more diverse candidates.

One survey found that 70% of Gen Z respondents were more likely to apply for a job with an ERG. Across all age demographics, over half of those surveyed said the presence of an ERG would make them more likely to stay at a job.

Improve the employee experience

When a group of employees feel undervalued at work and like their opinions don’t matter, everyone at the office can be negatively impacted. These employees may become disengaged and pass off their work to their teammates. Disengagement can also lead to conflict and fighting among team members.

Having an ERG can help you recruit more diverse job candidates, since applicants can see you working to amplify minority voices.

An effective ERG helps everyone feel more valued at work, which improves your company culture. ERGs ensure that everyone’s voices are heard, which can improve employee engagement.

A good example of this is AT&T's ERG, the NETwork, which has over 11,000 members. AT&T reported that it has had an 86% retention rate among its black employees since starting the ERG.

[Read more: How to Increase Employee Satisfaction]

Improve innovation

In large organizations, it’s easy for silos to form and for different groups of individuals to stop talking to one another. But a truly innovative company needs a variety of different viewpoints looking at the problem.

An effective ERG can make your company more innovative since you have more diverse perspectives in the workplace. It can also act as a think tank to leverage the ideas of its members.

Solve workplace problems

When employees are involved in an ERG, they can solve workplace problems that may have gone unaddressed otherwise. When employees have an issue that frustrates them about the company, they may stay silent or complain to a coworker about it, causing resentment to grow.

Multiple people may have the same issue, but since they aren’t organized, they can’t do anything about it. However, employees involved in an ERG can come together, talk about the problem, and come up with possible solutions.

Develop new company leaders

In addition to providing support and community, ERGs can offer professional development opportunities. For instance, an ERG can host workshops, a speaker series, and other training to help employees develop the skills they need to advance in the company. So as you support your employees within the ERG, you’re also developing the future leaders for your organization.

Numerous studies have shown that employees want access to employee training and development. For instance, employee retention rates are 34% higher for companies that provide these opportunities.

[Read more: How to Find an Employee Upskilling or Reskilling Program]

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