The Power of Diversity & Inclusion: Building the Business Case for ERGs

A guest blog from Matt Parsons from Radius Networks on how ERGs drive diversity, innovation, wellbeing, culture, and business performance, shaping EDI strategies from the ground up.

A group of young people of varied genders and ethnicities jump joyously into the air, against a backdrop of blue skies. Above them is the Radius Network logo, with the tagline "Build Better Networks, Together".

In an ever-evolving business landscape, diversity feels more important than ever. Organisations that commit to DEI recognise their ability to future-proof culture and drive innovation. They also understand that DEI is more effective when driven from the ground up.

Employee networks and resource groups (ERGs) have long been a safe space for colleagues who want to network, and share lived experiences. But increasingly, employers are leveraging these groups to shape and drive their DEI strategy.

So what impact can ERGs make, and why are they so important? Here’s why the business case for ERGs is stronger than ever.

ERGs Build a Diverse Talent Pipeline

Attracting and retaining the best talent is a challenge across every industry, but there’s evidence that signalling a clear commitment to DEI can make a difference. A recent survey by Monster found that 83% of Gen Z candidates think that a company’s commitment to diversity is important, with 70% saying that they were more likely to apply for an organisation with ERGs.

In addition to providing prospective employees with a sense of belonging, ERGs can help companies tap into new talent pools and connect with underrepresented communities. ERGs are also an excellent resource for advancing diverse talent. Running a network not only builds leadership skills but also creates mentoring opportunities by allowing colleagues to connect with senior leaders.

ERGs Foster Innovation

A sense of belonging unlocks employee potential, and studies show that diverse teams generate greater innovation in the workplace. ERGs can accelerate this by creating a safe space where ‘outside the box’ thinking is heard. They also give business leaders an active and engaged resource to tap into for new ideas.

Organisations that value their ERGs often see them as incubators for creativity and draw upon the lived experiences of their networks to drive innovation in everything from policymaking to product design. ERGs can also foster cross-functional collaboration and knowledge sharing, which encourages the free flow of ideas. This, in turn, creates a culture of continuous learning, which is vital for future-proofing business.

ERGs Boost Employee Wellbeing

According to McKinsey, over 90% of Fortune 500 companies now have ERGs, and these networks are increasingly playing an important role in boosting employee engagement.
ERGs help people to feel seen, and when colleagues are supported and valued for their unique perspectives, they are more likely to fully engage with their work and get behind a company’s mission.

ERGs can also boost employee wellbeing by enhancing job satisfaction and providing a space for colleagues to share health challenges and find support. There’s evidence that ERGs with a wellbeing focus can help staff navigate complex health challenges and keep working, for example, during Menopause or when experiencing Mental Health difficulties. Many organisations now look to their employee networks to help shape policy in these areas, adopting a bottom-up approach that empowers staff to influence decisions about their personal wellbeing.

ERGs Build Culture & Reputation

In today’s socially conscious marketplace, customers and stakeholders increasingly expect businesses to demonstrate CSR and uphold the values of DEI. ERGs can help brands achieve this by championing these values from within and positively shaping organisational culture.

When a business supports ERGs, it signals a broader commitment to issues such as disability inclusion, racial and gender equality and LGBTQ+ rights, which enhances its reputation. Within local communities, ERGs can also improve brand visibility through volunteer and charitable activities linked to the causes they champion.

ERGs Drive Business Performance

Not everything in business is about the bottom line. However, organisations that invest in ERGs are increasingly reaping the benefits. Research has consistently shown that companies that embrace DEI outperform their peers against a wide range of metrics; they are more innovative, competitive, and able to mitigate risk and unlock new market opportunities.

Such companies don’t just pursue DEI as an ideal, they fully commit to it, and they do so by weaving an inclusive culture that creates true belonging. ERGs are perhaps the most tangible manifestation of this because they visibly unite people. They create a place of psychological safety which enables people to bring their authentic selves to work and freely exhibit the behaviours that drive business performance: adaptability, collaboration, enthusiasm, and creativity, to name just a few.

In summary, ERGs aren’t just a way for organisations to promote DEI. They are a vital resource that can drive strategy from the ground up. By building a diverse talent pipeline, fostering innovation, boosting employee engagement and enhancing brand reputation, ERGs can positively impact performance and prepare today’s businesses for tomorrow’s challenges.

This blog post was written by Matt Parsons, Director at Radius Networks. It was originally posted on 30 April 2024. 

Radius develops employee networks and resource groups for the world’s biggest brands, putting them at the heart of organisations and unlocking their potential to ignite change. With a focus on developing networks to support the entire ERG ecosystem, Radius offers a complete range of services and programmes for everyone involved in an ERG’s success, from training for Network Leads, Sponsors and DEI Champions to network audits, playbooks, maturity reports and in-house summits. Visit to find out more.

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