Journal of Financial Planning: November 2022
Ana Trujillo Limón is the director of coaching and adviser content at Carson Group. She holds a bachelor’s degree in political science and journalism from the University of Miami and is pursuing a master of business administration at the University of Colorado Denver. Carson Coaching is the official coaching partner of the Financial Planning Association.
JOIN THE DISCUSSION: Discuss this article with fellow FPA Members through FPA's Knowledge Circles.
FEEDBACK: If you have any questions or comments on this article, please contact the editor HERE.
This year has been a rollercoaster. Every news cycle, we’re hit with worrisome news that quite honestly makes many of us feel hopeless and fearful.
And our industry reacts to all this news in very polarizing ways. As such, I recently toyed with the idea of leaving the industry altogether. I discussed it with my bosses and was encouraged to not give up on the industry, but validated in that this industry has that effect on people like me. I felt like I had to constantly call out negative or harmful behavior, and my mental health was suffering. Quite frankly, I started to feel like there was no hope and I should make my exit like so many before me.
But then I found some hope. At our company, we have “Connections” groups that are for employees who have similar interests—like our Green Team for people who are interested in zero-waste practices, and the Young Professionals for those who are newer to the industry. We have one resource group for veterans but none for our diverse employees.
Part of that hope came in the form of meeting regularly with a young diverse colleague. We talk about the state of the world in a safe, no-judgment space, bounce ideas off each other, and generally make each other feel like we have a place in this company and this industry.
We started thinking: wouldn’t it be amazing if we could get all our diverse employees to come to these meetings and feel the same way? So, we began the process of starting a multicultural employee resource group—awesome name pending.
Because I wanted to ensure our group was off to the best start, I did what any former reporter would do: I asked the experts. I pinged DEI professionals to ask about their best practices and advice for starting and maintaining employee resource groups and why they are a valuable addition to your diversity practices.
If you’re in a position to establish an employee resource group (ERG) at your company, here are a few things the experts suggest you keep in mind.
The Pros and Cons
Let’s start with the definition of an employee resource group from the Society of Human Resources Management: ERGs are “employee groups that come together either voluntarily, based on common interest or background, or at the request of a company.”1 SHRM notes that these groups can be formed based on race, ethnicity, gender, disability, sexual orientation, parental status, national origin, religion or belief, or generation (Gen X or Gen Z, for example).
A wise woman in our profession told me to sit down and write a pros-and-cons list for why I should stay in the industry. The pros far outweighed the cons. Sitting down to write a pros-and-cons list is a valuable exercise when deciding whether to establish an ERG at your firm.
I’ll help you get it started. That same wise woman, Lisa Bruce, DEI manager for Envestnet, noted that the benefits of ERGs include that they cultivate inclusive environments where like-minded individuals can grow and learn from each other. They also help spread awareness that helps employees of all backgrounds understand things like microaggressions and biases, thus strengthening allyship.
Shelton Goode, former chair of the diversity and inclusion leadership council for The Conference Board, noted in a SHRM article that ERGs can also help identify gaps in your business strategy, can ensure diverse employees feel valued, and can help you gain insight into business performance.2
On the cons side, however, Bruce said that lack of participation or engagement in programming can be a drawback. Also, a lack of executive or leadership buy-in can be a barrier to the success of ERGs. Isaac Dixon, Ph.D., adjunct professor at Portland State University and president of VISTA HR Consulting, noted in a SHRM article, “Are Employee Resource Groups Good for Business?” that ERGs are also perceived to create “fragmented silos” and can give a false impression that inequity and DEI issues have been solved.3
The Process
But it appears the pros of establishing ERGs outweigh the cons, specifically if you’re at the beginning of your journey in establishing DEI best practices and policies at your firm. While there isn’t one concrete path to follow to establish your first ERG, here are steps that should be included in the process.
Send a survey out to employees. This survey should be designed to gauge their interest, and see how frequently they want to meet and what types of programming they might desire.
Get executive buy-in. Dixon noted that lack of executive support can stifle ERGs. Your ERG has to have leadership support for success. Later, when you’re better established, you need more than that—you need a commitment in the form of having leaders be executive sponsors for each ERG.
“This shows ownership and commitment to DEI at the top of leadership,” Bruce noted, adding that Envestnet’s ERGs each have an executive sponsor. “An executive sponsor is instrumental in aligning the goals of the ERG back to the business. They will also be the champions to explain to leadership the progress of the ERG that they sponsor.”
Create a mission statement and goals for your ERG. Greg Jenkins of Greg Jenkins Consulting noted that best practices dictate that the ERG mission and goals be aligned and support the overarching goals and objectives of the organization.
Formalize a working group. This working group will help organize the initial meetings and programming. Eventually, this working group will morph into a steering committee, which will launch official meetings and establish subcommittees within the ERG.
Establish leadership structure and guidelines for your ERG. Bruce said this includes establishing the group’s chairs and co-chairs, who will lead the charge and keep the group up and running. Jenkins added that this step should include defining the roles and responsibilities of each of the group’s leaders.
“Many ERGs employ rotating leadership and other group officer positions—chairperson, vice chairperson, secretary, etc.—through well-defined voting procedures,” Jenkins said.
Craft an ERG toolkit. Document everything throughout the process and then use that to establish an ERG toolkit to serve as a blueprint for other ERGs to follow.
If you are a firm leader reading this, give your employees the autonomy to start these groups and don’t bog them down with a formal approval process. And be the person who offers executive buy-in and support. This is how we begin to create inclusive spaces.
At Envestnet, there’s no formal approval process for establishing ERGs.
“Our leadership wants more ERGs in our company to represent our diverse community at our firm,” Bruce noted. “The process to get an ERG up and running is up to the project leader and working group.”
Track and measure progress and effectiveness. Jenkins said it’s critical to establish a baseline when you’re forming your ERG and to develop metrics and measurements that will communicate your group’s effectiveness. This can help you show your group’s value proposition and can help you figure out if you’re doing what you set out to do.
Establish a system for recognition and reward. In our pros and cons section, we noted that a lack of engagement is one of the risks of ERGs. However, if you have a system where members are recognized and rewarded for going above and beyond in serving their ERG, they are likely to continue to participate.
The Most Important Things to Remember
Getting leadership involved as executive sponsors and supporters is the most important thing to do when establishing ERGs.
“Top leadership that recognizes the value an ERG can provide will outperform others that neglect or ignore . . . their organization’s ERGs,” Jenkins said.
When your leadership team engages as executive sponsors of ERGs, there are many benefits that your firm can reap, Jenkins said, including:
- Executive sponsors can collect valuable information that serves as a feedback mechanism to the rest of the leadership and executive teams.
- ERGs can be a place to find future C-suite and leadership talent. If you have an active and robust ERG that’s supporting current and future leaders, your firm naturally has a pipeline of diverse C-suite talent; that way you never have to use the excuse that you don’t know where to find diverse C-suite talent.
“If the organization and the ERG are able to build a trusting and professional relationship, the ERG can serve as a voice of the workforce to top leadership,” Jenkins said.
Endnotes
