As organizations increasingly prioritize diversity and inclusion initiatives, the role of Employee Resource Groups (ERGs) has become vital in driving change and fostering inclusive workplaces. The rapid pace of change and the current environment of uncertainty call for leaders to revisit and examine the role that ERGs will play moving forward, and near universal reports of ERG leadership burnout make these discussions urgent.
To address these challenges, Seramount researchers embarked on a new study, ERGs at a Crossroads: Benefits, Boundaries, and Burnout, and found that many organizations are choosing to recognize ERG leaders in different ways. However, determining the right compensation model for these leaders can be complex.
Here are five models to ERG leadership compensation that every DEI leader should be aware of as you decipher which approach may be best for your organization.
Model #1: Development, Opportunity, Exposure
The first approach, and the most popular, does not offer specific time or compensation but makes an explicit commitment to development, opportunity, and exposure to benefits. All the other models include this promise at their base.
Model #2: Volunteer Hours
Many organizations have a program for all employees where they have a defined set of hours that can be used for volunteer work within their roles. In some organizations, ERG work can be counted within those hours.
Model #3: Pay Supplement/Stipend
In recognition of the extra work and stress that many ERG leaders experienced during the pandemic, several organizations provided one-off or “spot” bonuses to some ERG leaders. However, this compensation is generally one-off and at the discretion of the company. An emerging model is a regular additional payment for ERG leaders. This can be called a bonus, a stipend, or a supplement, but it is permanent and not typically performance based. The model emerged mostly among technology companies in the early 2020s: Uber ($5,000), Ripple, Autodesk ($10,000), Twitter, Justworks (cash and stock options). From 2023, given the staffing and other changes in the tech industry, it is unclear how many of these programs have continued.
Model #4: Defined Role Carve-Out
To give ERG leaders protected time to lead and to make the roles more attractive, some organizations have implemented ‘role sharing.’ Role sharing sets aside dedicated time for ERG leadership work, creating assignments, cover roles, and stretch projects. Role sharing reserves a percentage of a staff member’s work week for ERG leadership responsibilities. ERG leaders get their regular wage from their department but spend a designated amount of their time on average in their primary role.
Model #5: Full-Time Role
Finally, a more radical approach is to create a full-time, paid role for ERG leaders, albeit for a limited period. In this case, the ERG leader is on a temporary assignment from their regular role, as opposed to creating a permanent ERG leadership career path. Organizations that have implemented this model have seen the business value that the model presents and have found that one of the primary benefits is accelerated impact. This model also enables higher visibility within the organization to issues that may be barriers to progress. Because leaders report directly to executive sponsors who are members of the leadership team, barriers can be addressed more readily and removed.
Conclusion
There is no one right answer for all. An organization’s approach to inclusivity, business support, and leadership compensation will be different depending on the organization, the stage of ERG development, and many internal and external factors.
However, we recommend leaders, no matter the stage of development of their ERGs, consider the questions surrounding ERGs as they plan for the future. In particular, to what extent are ERGs inclusive vs. exclusive, and voluntary vs. professional and how will that change as their ERGs develop and grow?
Interested in learning more about these ERG leadership compensation models and hearing case studies of companies who have implemented each approach? Sign up for our upcoming webinar on August 17, Enhancing ERG Success: A Deep Dive into ERG Leadership Compensation Approaches.
