From culture to capital: How employee resource groups drive bottom-line results

In 2025, Employee Resource Groups (ERGs) will no longer be viewed as “nice-to-haves.” They are strategic business assets. As companies face increasing complexity, from talent shortages to DEI fatigue to economic headwinds, many HR leaders are asking: How do we support our people while also serving the bottom line?

The answer may be sitting in your Slack channel, underutilized and undervalued: your ERGs.

I recently spoke at the Association of Talent Development Professionals about the evolving role of ERGs. What I heard in the room was a familiar tension: HR professionals want to champion equity and inclusion, and they are increasingly required to do so in a language the C-suite understands—one of outcomes, metrics, and ROI.

Let’s talk about how ERGs can meet both human needs and hard business goals.

The ROI of ERGs: Five Bottom-Line Boosters

1. Retention Connected to Effective ERGs: Companies with strong and resourced ERGs, as opposed to underresourced ERGs see lower turnover; it’s simply not enough to have ERGs. When employees feel a sense that their ERG is taken seriously, they stay. One McKinsey study showed employees who rated their ERGs as effective or very effective in one or more categories were more likely to report significantly higher positive inclusion scores than employees who rated their ERGs as ineffective or very ineffective: 83 percent compared with 59 percent.
2. Reporting and Safety: ERGs create psychologically safe environments where employees feel empowered to voice concerns. This leads to earlier identification of workplace issues and better risk mitigation. Think of them as your early warning system.
3. Mobility and Talent Development: ERGs often serve as leadership incubators. Members gain visibility, mentorship, and cross-functional experience. Companies like Salesforce and Intel have tied ERG participation to leadership pipeline development and seen results.
4. Innovation and Customer Insight: ERGs represent communities that often mirror diverse customer bases. Their lived experiences can shape more inclusive, successful products and campaigns. ERGs at consumer companies have influenced everything from product packaging to market strategy.
5. Coaching for ERG Leaders: Offering professional coaching to ERG leaders is a powerful, tangible way to recognize their often-voluntary contributions. It sends a message that their leadership is valuable, strategic, and worth investment. Coaching enhances their ability to influence, manage conflict, and lead across differences, skills they can carry into broader organizational leadership roles. This not only improves ERG outcomes but also fosters rising talent, boosts retention, and delivers significant cost savings compared to external hiring.

Reframing ERGs: From Culture Club to Strategic Engine

The narrative needs to shift. ERGs aren’t social groups, they’re embedded problem-solvers and innovation labs.

For example, a Pride ERG might help audit a company’s healthcare benefits for gaps affecting LGBTQ+ employees. A Black ERG might co-lead community partnerships that boost brand visibility and social impact. These are strategic functions.

And when ERG leaders are supported with coaching, they’re empowered to step more fully into these roles. Coaching develops the leadership skills needed to drive initiatives, navigate executive conversations, and turn grassroots ideas into institutional impact.

How HR Can Maximize ERG Impact

1. Align ERGs with KPIs: Set clear goals linked to business outcomes, like increasing internal promotion rates or improving onboarding experience scores.
2. Executive Sponsorship with Accountability: Sponsor roles must go beyond symbolic. Tie leadership involvement to performance reviews or business scorecards.
3. Measure What Matters: Use engagement data, retention metrics, and qualitative feedback to evaluate ERG impact. Don’t just track event attendance—track influence.
4. Provide Coaching for ERG Leaders: Treat ERG leadership like any other critical leadership role, with real development. Coaching builds capability, confidence, and continuity. It’s one of the most impactful (and cost-effective) investments in your future leadership bench.

The Path Forward

With budget cuts and heightened expectations, supporting ERGs may seem optional. It isn’t. It’s an overlooked lever of value creation.

Companies that invest in ERGs as engines of belonging, insight, and strategic problem-solving are not just supporting inclusion, they’re building resilience.

The future of work is more human and more data-driven than ever. Let’s make sure our ERGs and their leaders are coached for both.