How Employee Resource Groups Can Drive Diversity in an Accounting Organization
This article dives into how Employee Resource Groups (ERGs) help firms build cultures that attract, engage and retain people by turning inclusion into action. Firms that invest in ERGs create workplaces where employees are more engaged, loyal and likely to thrive.
By Derrick Bonyuet, Ph.D., CPA, CFA, CFP
According to a survey conducted by the Association of Chartered Certified Accountants (ACCA), most employees confirm a strong diversity and inclusion culture to be a key factor when selecting an employer. This article discusses implications for many firms given the high response rate and how they can adapt their organizational culture by using Employee Resource Groups (ERGs).
Background
The results of the survey included 9,889 finance professionals from 157 countries; 73 percent of the participants confirmed that a strong diversity and inclusion culture is a key factor when selecting a future employer. The study also revealed 54 percent of respondents expect their next move will be outside their organization. As over half of the participants anticipate changing jobs, firms may need to improve their employee retention strategies.
When asked about the reasons to switch jobs to another organization, a better culture was cited among the top five reasons. These results indicate firms must take proactive steps to ensure their organizational culture aligns with their employees expectations and, by doing so, firms can also differentiate themselves to attract the human talent they need to succeed (ACCA, 2024).
Having the right organizational culture can also benefit a firm or company by promoting employee engagement. That is because organizational culture represents shared values, attitudes, behaviors and standards that make up an organization, resulting in a more positive work environment. In turn, employees will feel the desire to work more engaged, more productive and more committed. Higher employee retention will be the result.
While there is not a unique organizational culture, a healthy work environment includes several elements, including teamwork and collaboration, recognition, opportunities for professional growth, strong compensation and benefits, work-life balance, and a diverse workforce. Diversity will also allow ideas and perspectives from different people to arise, which fuels the creativity process and from there, innovation (Agarwal, 2018).
Promoting diversity is not an easy task. Based on a study from Harvard Business Review, most diversity programs fail, as they try to police managers decisions. Instead, the most effective programs are based on people engagement and promoting contact with women and minorities (Dobbin & Kalev, 2016). This is where ERGs can make a difference. ERGs, also known as affinity groups, can be defined as groups of employees who join voluntarily within their firms based on common interests, issues and/or a common bond or background (Welbourne, Rolf & Schlachter, 2015).
How Do ERGs Create Value for the Organization?
In their simplest form, ERGs create value in organizations by promoting the diversity of the employee base. ERGs also contribute to an organization s success in many areas, such as recruitment and retention, product development, creating a positive and supportive work environment, and helping deliver the commitment to diversity and inclusion (Seramount, 2009). Benitez & Gonzalez (2011) assert the role of an ERG often evolves through the following stages.
Cultural awareness promoter: During this phase, ERGs behave like social clubs as they seek to create social interactions to celebrate employees affinity and create a sense of belonging to a particular community within the organization. ERGs in this category may have limited outreach and resources and therefore, activities may not be well structured. Common practices on the social club category include social gatherings and heritage celebrations, which contribute to creating a culture of inclusion and diversity of background, thought and perspective.
Talent developer: In this phase, ERGs conduct activities conducive to employee engagement and talent retention and development, such as mentoring, coaching and skills development. Common practices include career workshops, development programs and career panels with executives that support communication within and across groups, problem solving and business acumen.
Trusted advisor: During this phase, ERGs play an advisory role and thus, ERGs conduct research and benchmark activities with professional organizations to share learning, best practices and advice. Key practices in this category include partnering with external organizations and the management of resources to fund related activities, bridging cultural differences across corporate boundaries and building a connection with the community.
Business advocate: In this phase, ERGs have successfully integrated their practices with key business drivers to enhance the full potential of the organization s human capital. Some practices include customer support, marketing campaigns and product testing. ERG members can be engaged in assessing the effectiveness of marketing campaigns or testing new products in specific markets or segments.
An Actual ERG in Action
William, a consultant at a technology company based in Central Texas, explains how ERGs are organized around diversity themes, such as Latino, woman, black and Asian affiliations. ERG activities are designed to promote the development and engagement of their employees and to contribute to the community. William elaborates on the structure of the Latino ERG around three pillars.
- Development: The purpose of this pillar is to develop the skills, abilities and capabilities of the team members. Activities include partnership with Hispanic associations along mentoring opportunities to further the development of their team members. Members from the Latino ERG are often requested to assist Spanish-speaking customers during their tours and field visits. In addition, the Latino ERG has traditionally partnered with the Hispanic Chamber of Commerce in their annual events to share insights on the Hispanic market, as well as minority supplier agencies to ensure compliance with the qualification process for minority vendors.
- Engagement: The purpose of this pillar is to coordinate all social and cultural activities to drive employee engagement, such as Hispanic Heritage Month, happy hours, and other music and fun events.
- Community: The purpose of this pillar is to drive all activities conducive to the engagement with the local Latino community by sponsoring local non-profit organizations. ERGs are provided with funding so their members can select which non-profit organizations deserve their support. In addition, ERG members may join the board of these non-profit organizations.
William also states the purpose of such activities is to drive collaboration across organizations. As a result, activities are open to any employee and often, ERGs partner in joint events. In addition, ERG activities are not restricted to a specific business function.
Finally, one of the most important statistics to highlight is that those ERG members who are actively engaged in their activities score 20 points higher in employee surveys as compared to those who are not involved. The interpretation is that those individuals who are highly engaged in ERGs feel better about the company s products and services, are likely to recommend the company as a great place to work, and are more likely to stay, so employee turnover is reduced, representing a huge value back to the organization.
Building a Culture That Attracts, Engages and Retains Talent
Firms must take proactive steps to ensure their organizational culture aligns to their employees expectations. By doing so, firms will be able to manage employee turnover and attract the human talent needed to accomplish their business goals.
Having the right organizational culture also allows firms to drive a diverse workforce and increase employee engagement. An effective way to do this is through ERGs, which have been found to be very powerful across organizations in driving people development, people engagement and connection with the local community.
Related CPE Attracting and Retaining Talent |
About the Author: Derrick Bonyuet, Ph.D., CFA, CFP, CPA, is a clinical assistant professor of accounting in the McCombs School of Business at The University of Texas at Austin. He teaches Intermediate Accounting and Financial Statement Analysis. He is currently serving as the acting CFO of Hazel Aero, an early-stage startup working to design the new generation of search-and-rescue aircraft. Contact him at derrick.bonyuet@gmail.com.
References
ACCA (2024). Global Talent Trends 2024. Association of Chartered Certified Accountants. https://infogram.com/gtt-2024-slides-master-1h0n25y55gw5z6p?live
Agarwal, P. (2018). How to create a positive workplace culture. Forbes. https://www.forbes.com/sites/pragyaagarwaleurope/2018/08/29/how-to-create-a-positive-work-place-culture/?sh=7613f32b4272
Benitez, C. & Gonzalez, M. (2011). Latinization and the Latino Leader. Paramount Market Publishing, Inc. 74-84
Dobbin, F. & Kalev, A. Why diversity programs fail and what works better. Harvard Business Review, July-August 2016, 52-60
Seramount (2009). Employee Network and Affinity Groups. Diversity Primer. Diversity Best Practices
Welbourne, T., Rolf, S. & Schlachter, S. (2015). Employee Resource Groups: An Introduction, Review & Research Agenda. Academy of Management Proceedings. DOI:10.5465/AMBPP.2015.15661Abstract
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