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What is an ERG, why is it important, and why should an entrepreneur care?

Updated: Oct 17, 2022

Today’s guest is an entrepreneur who started a Community Growth Platform called Orbit, which is an online community growth engine that drives growth.

With Orbit’s single, shared view of members and activities, communities can create cohesive messaging. It also has reporting systems to gauge impact and prove return-on-investment (ROI).

One area I saw this platform performing well is Employee Resource Groups also known as ERGs.

What is an ERG, why is it important, and why should an entrepreneur care?

Employee resource groups are groups of employees who join in their workplace based on shared characteristics or life experiences.

ERGs are generally based on providing support, enhancing career development, and contributing to personal development in the work environment.

In my experience, an ERG provides resources for learning and development support through formal and informal opportunities by creating employee networking activities. These networking opportunities do not have to simply come from one employer.

In fact, I am one of the co-founding members of the Oregon Health & Science University (OHSU) Latino employee resource group. This group was officially formed 10 years ago almost to the day in 2012.

Since then our OHSU ERG has grown to over 200 members with just as many subscribed to our newsletter. Furthermore, I have recently established the Pacific Northwest Latino ERG consortium which is a collection of ERGs from other organizations throughout the State of Oregon.

Those organizations include, but not limited to: Airbnb, Nike, Adidas, Moda, Daimler, Cambia Health Solutions, and many more. The intent behind the creation of the Pacific Northwest ERG consortium is to share best-practices between our groups.

You see ERGs are not only about networking and leadership development, it is also about being a resource for decision-makers and leadership concerning the structure of organizational polices, staffing (recruiting and retaining), community needs and concerns, brand awareness, and that is why ERGs are important.

However, one of the biggest pieces that is needed in order to have a successful ERG is securing executive support. One way I gained executive support was making bullet points with supporting data highlighting the benefits of an ERG.

According to the Sequoia Consulting Group’s 2021 Employee Experience Benchmarking report, 40% of companies have Employee Resource Groups, a 9% increase from 2020.

This is in line with an uptick in Diversity, Equity and Inclusion (DEI) initiatives as the pandemic and racial injustice awareness “created new challenges and opportunities for employers to evolve their employee experience,” according to Sequoia officials.

DEI has been researched time-and-time again, and the data always supports diversity. In 2020, McKinsey & Company, a global management consulting company, did a study called “Diversity Wins: How Inclusion Matters”.

In that study, McKinsey & Company found that diverse companies are more likely to financially outperform their peers.

In that same study, McKinsey & Company found one-third of the firms they tracked since 2014 have achieved real gains in executive team diversity.

However, about 50% have made little or no progress and, with that, many have seen gender and ethnic minority representation even go backwards.

Another point this study made: promoting diversity does not ensure a culture of inclusion, and that is why the entrepreneur should care.

As I have stated time-and-again, I work in healthcare. If you look across the healthcare industry you will see many hospitals failing financially right now.

Although there are many factors, one issue hospitals are facing right now is staffing. There are not enough American born workers taking up healthcare as a profession, creating a huge staffing hole for our aging population.

In turn, healthcare systems have been turning to nurses beyond our country’s boarders to bring in healthcare staffing to support our community needs. In Oregon, 20% of licensed health care workforce speak another language, according to Oregon’s Health Needs Assessment.

ERGs are not simply about diversity in cultures – they are about the diversity in our communities.

At OHSU we have over 10 different ERGs: from OHSU PRIDE to Veterans to International to Older Employee resource group.

Any staff member can join these ERGs to understand what issues other communities are facing. It is about creating awareness and opportunity through fairness and transparency.

It is about fostering a multicultural diverse organization as diverse as our communities.

Our communities of entrepreneurs.

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