What are ERGs?
Employee Resource Group impact is a visible and essential element of every business’s diversity and inclusion strategy. Due to growing employee interest and employer funding, 90 percent of Fortune 500 companies now have a platform for ERGs.
These platforms offer a variety of benefits, including increasing employee engagement, innovation and diversity and inclusion within the organization. But the prevalence and popularity for ERGs also raises the expectation for greater transparency about the value of ERGs.
How do you know when ERGs are making a substantial impact for the organization and its members? The answer: performance measures and metrics.
The Employee Resource Group Impact Plan
Before having a discussion on measures and metrics, it is important to review how metrics fit into an ERG operating plan model. Most organizations require an annual plan that details the plan initiatives, metrics, action steps and events.
The following operating plan model shows the flow for the plan development.
The operating plan begins with defining key focus areas for ERGs. It continues with clear steps for demonstrating ERG performance, such as “Measures of Success” and “Action Steps to Drive Success.” Both of these steps contribute to the initiative’s overall performance.
Establishing Employee Resource Group impact measures like these are essential to the sustainability of ERG platforms and other employee-led teams in an organization.
ERG measures can be divided into two levels: ERG operational measures and the impact ERGs have on the organization.
ERG operational measures are the initiatives and activities that are in direct control of the ERGs and reflect the ongoing effectiveness of the ERGs. The following model highlights some of the factors that contribute to ERG effectiveness.
- Operating Plan Performance: A factor that assesses how effective the ERG is at delivering on its annual initiatives, metrics, and action plans.
- Financial Impact: An area where ERGs can tally either direct revenue or cost savings (avoidance) that are generated by its efforts. For example, one might be able to save on search fees due to the ERG’s ability to find viable position applicants.
- Membership: Membership is at the core of ERG effectiveness. It’s important to establish objectives around increasing the number of employees who are members of ERGs because this is a true depiction of employee engagement. Additionally, membership growth, participation and satisfaction are the essential measurements here.
- Event Performance: Event performance is a reflection of the success of an event, and like membership, is measured through attendance and event evaluation.
- Community Impact: Community impact is another central focus for ERGs. Capturing the number of volunteer hours and dollars raised for a charity are two great measures of success. Community involvement also aligns well with the company’s broader objectives related to reputation and brand management.
- Professional Growth: It’s critical that members of ERGs grow professionally, and doing so is one of the many values ERGs provide to both members and non-members. Whether through surveys or other means, it’s necessary to measure this impact on the individual level.
Once target metrics are set for each of these factors, it’s important to measure the outcomes and compare them back to the target for periodic reporting.
The table below provides an example of metrics for each target and calculations that show the actual performance as a percent of the target. Although not shown here, organizations can add weighting for each factor and calculate the performance index score for each ERG.
|Measure Description||Target||Actual||% Achieved (max of 100%)|
|Financial||Performance to budget||Percent of budget expended||100% or less||100%||100%|
|Revenue/cost savings||Revenue/cost savings as a percent of total ERG budget||50%||25%||50%|
|Membership||Growth||Percent annual membership growth||10%||15%||150%|
|Satisfaction||Percent member satisfaction||85%||92%||116%|
|Participation||Percent of membership attending events||85%||87%||102%|
|Events||Evaluations||Percent event satisfaction||85%||60%||70.5%|
|Attendance||Percent of target participation||90%||75%||83.33%|
|Initiatives||Metric performance||Percent target achieved||100%||85||85%|
|Action plans||Percent positive action plans||100%||95||95%|
|Community||Volunteer hours||Hours per member||5||4||90%|
|Charity dollars raised||Dollars as a percent of ERG budget||50%||50%||100%|
|Professional Growth||Skill Assessment||Percent improvement measured by skill assessment surveys||10%||8%||80%|
Let’s wrap this up
ERGs play an essential role in leveraging and engaging with diverse teams. Organizations are using these employee-led teams to positively impact:
- Product innovation
- Quality improvement
- Customer satisfaction
- Market growth
- Culture change
Although this article focuses on operational metrics for ERGs, there are other measures that are of interest to the organization and demonstrate the broader impact of ERGs. Some of those impacts include:
- Employee retention
- Engagement scores
- Promotions of ERG members
- Inclusiveness of the culture
- Individual job performance and compensation
These organization impact measures are typically outside the scope of Employee Resource Group impact, but highlight the ultimate value that ERGs and other employee teams bring to the organization.
Ready to Measure?
The ERG Operating Plan Development model and the ERG Effectiveness model are critical for the sustainability of ERGs and for the demonstration of its impact.
But the complexity of calculating performance, tracking, monitoring and reporting can be daunting. Luckily, technology tools like ERG Insight™ provide comprehensive ERG management capabilities.
This cloud application is designed to tackle the most common challenges when growing and managing ERGs and employee councils. ERG Insight™ allows organizations to easily measure and report on ERG effectiveness using metrics.
Some of the key features of ERG Insight™ include:
- A user friendly navigation dashboard
- Enhancing the link to an organization’s overall business strategy
- Standardizing the operating plan development process
- Capturing all the factors of an operation plan — initiatives, activities, costs, timing, accountability and measures of success
- Ensuring group activities align with business objectives
- Generating scorecards, reports and charts for reporting
- Online access for ERG leaders, ERG members and all employees with different security levels
- Managing group events, registrations and membership
To learn more about ERG Insight, visit our technology platform at www.stratustms.com.