Blog Post

The ERG Leadership Trap: Opportunity or Exploitation?

By Kaela Blanks
June 6, 2023

The ERG Decade

Employee Resource Groups (ERGs) are having a moment. Although they are a decades-old DEI tactic, they have surged in popularity over the past three years, and Seramount’s DEI advisors have received many questions from diversity leaders at our member organizations about setting up, retooling, or expanding ERGs.

ERG use has risen slowly across the past decade, matching general investment in diversity, equity, and inclusion. They are popular, highly-visible, and relatively inexpensive. Organizations have also leveraged ERGs to help access new and growing aligned markets. Many have been rebranded as Business Resource Groups (BRGs) to show an increasing alignment with the business.

The recent spike in popularity has other causes. Racial flash points in 2020 left organizational executive teams unprepared to respond. They turned to their ERGs for help and counsel.

At the same time, the move to remote work transformed ERGs. A diaspora of staff could now attend ERG activities and membership surged. Remote events allowed for the consolidation, centralization, and standardization of ERG activities. Many DEI offices funded staff positions to coordinate and support their ERG programs.

Today, economic uncertainty seems to be increasing executive interest in ERGs as an economical approach to DEI.

Promise or Peril?

ERG leaders now have the attention of executive teams. They have some central support and are often leading vast, national, or even global groups with thousands of members.

These increasingly high-profile roles are an opportunity for development, access, and visibility.

But there are dangers.

Firstly, there are universal reports of ERG leadership burnout. These jobs, done on top of a primary job, are increasingly burdensome. Many DEI offices are having trouble replacing leaders.

Second, being an ERG leader may go unrewarded, or worse, hurt your career.  ERGs can be wonderful vehicles for engaging staff and creating community. They are often passion-projects for their leaders and members. However, as ERGs move from voluntary affinity groups to having professional business impact there is a risk. Instead of promoting diversity goals, they could perpetuate inequality.

Despite the rise of investment in ERGs, they have not proved to be successful in driving a key DEI goal: increasing the diversity of senior leadership. As our recent report, Increasing Diversity Among Senior Leadership concluded–only 8% of organizations have reached the goals they set for themselves for this important metric.

This could be a case of timing. Aggressively moving the dial on senior leadership representation might be a longer-term project. But there is also something else to consider: ERG leadership experience may not help remove barriers to promotion.

There is a long history and evidence of historically excluded talent in business environments expected to do ‘unpromotable work.’

For example, studies show women across roles and sectors take on an unequal amount of “office housework” or low-value assignments; work that is important, but does not lead to rewards or promotions. At one large consultancy, researchers found that women did 200 extra hours per year of unpromotable work compared to their male counterparts. A month’s extra work. Senior women at the firm did the same amount of promotable work as the men but also did their non-promotable work on top.  This disparity at work is in addition to the disparity for many women domestically.

A study of the teaching staff at a US university showed that academics of color spent an additional 3 hours per week on unpromotable tasks.

DEI work is often considered unpromotable work. In a 2021 McKinsey report, 40% of women leaders reported that their DEI work was not considered in their performance reviews.

The danger is that ERG leadership work, despite the best intentions, becomes just more ‘unpromotable work’ put on the backs of people who already have fewer opportunities.

Organization leaders must be very careful not to let opportunity become exploitation.

That’s why more organizations are compensating or thinking about compensating their ERG leaders.

Our latest report, ERGs at the Crossroads: Benefits, Boundaries, and Burnout, looks at the tensions inherent in ERG programs. We outline five ways organizations are compensating their ERG leaders, including the tradeoffs companies are making, monetarily and non-monetarily to ensure that ERG leaders are justly rewarded for their work.

Learn More

Interested in learning about how Seramount’s DEI advisors can help you improve your ERG strategy? Contact us or provide training for your ERG leaders.

About the Author

Kaela Blanks Headshot
Kaela Blanks
Associate Director, Advisory