Why employee resource groups still matter

Employees can make or break any business. 

That plain truth is even more pronounced in the world of hardware and LBM companies, which are so reliant on relationships, trust and close collaboration. The trick for everyone is: How can you recruit, engage, retain and train the best of the best?  

HBSDealer’s recent Top Women in Hardware & Building Supply event featured an illuminating session jam-packed with practical guidance on launching and nurturing employee resource groups (ERGs). The discussion featured Corrine Pech, a product data manager at Metrie; Lea Allah, senior director of corporate human resources at Builders FirstSource; Laura L. Freeman, executive vice president and chief human resource officer at Orgill. The panel was moderated by Chrystal Ensey, VP of talent management at U.S. LBM.

Below is a snapshot of their tips and takeaways on sustaining thriving ERGs.

The power of ERGs

According to the panelists, ERGs offer numerous potential workplace benefits and enrichment, including:

1. An experiential career advancement and leadership platform.
2. A way to positively and strategically uplift the business.
3. A source of leadership experience that has a positive impact on selection and succession decisions.
4. A way to observe and source new leadership talent and potential.
5. A leadership development opportunity not only for members, but for the executive sponsors who help guide these groups.

According to Corinne Pech, the inaugural chair of Metrie’s women’s network, the company’s initial ERG attempt had a top-down approach, with execs wielding most of the control over its direction. That initial iteration fizzled out. Since the program relaunched, with a focus on empowering women in the ERG to have more ownership and decision-making responsibilities, Pech reports that it’s now thriving.

As evidence of the ERG’s successes so far, Pech cites:

• A 39 percent increase in committee membership.
• A 20 percent promotion rate in women who participated in the ERG.
• A 60 percent promotion rate for those who took on leadership roles within the ERG.
• A companywide, “notable” increase in female engagement scores.

Pech says Metrie’s committee is split into three different workstreams, focusing on policy, engagement, and networking. Metrie’s women’s network issues a quarterly newsletter, as well as produce webinars and work to craft female-empowering policies. 

“One step at a time is all it takes to get you there,” Pech says, issuing a caution to avoid trying to do too much at once.  

She shares a few more secrets to success:

• Share lived experiences.
• Start small, and gradually add objectives, roles and responsibilities.
• Welcome and nurture male allyship.

Listen, monitor and pivot

Lea Allah, the HR director for Builders FirstSource (BFS), says engaged, inclusive teams drive bottom-line success. These sorts of groups can also provide: 

• A sharper focus on business objectives
• Career development
• A sense of community

ERGs can also be a bulwark against burnout by offering an avenue for employees to advocate for change. It’s also an excellent forum for recognition, which can be more meaningful than you might imagine.

To start, Allah says BFS used annual surveys to identify key priorities and uncover cultural gaps that existed and where workers said they’d like support. As a result, Allah led a charge to establish a “Culture Council” to provide a forum where employees could help shape the company. That led to the development of BFS’ two ERGs, which focus on empowering women  (WeBuild) and veterans (Proud to Serve), respectively.

Allah offers these tips to ensure ERGs stay relevant and effective.

• Learn: Understand the need and potential impact.
• Listen: Gather input, and ensure everyone has a voice.
• Align: Make sure goals mirror and support the organization’s broader mission.
• Advocate: Be a voice for members’ interests and needs.
• Communicate: Share priorities, goals and best practices.
• Monitor: Track progress to ensure accountability and measurable milestones.
• Stay engaged: Maintain active participation and consistent involvement.

At BFS, Allah says, “We defined the framework for ERGs to determine governance and deliverables. We assigned roles and responsibilities and also set guiding principles and ground rules. Then, we launched a pilot program that was sponsored by an executive.” 

Allah says BFS’s ERGs have a standardized template to ensure messaging consistency across the board. Each group also ends meetings with a dose of “good news” to leave folks feeling inspired and empowered. 

“Never stop listening to ensure everyone stays on the same page,” she says.

Bottom-line benefits

Laura Freeman, Orgill’s chief HR officer, provided a look at the future of ERGs. She notes that 90 percent of Fortune 500 companies still have ERGs, despite many prominent companies stepping away from formal DE&I programs.

However, “A sense of belonging, post-COVID, is more important than ever,” Freeman says. 

In addition to bolstering belonging, Freeman suggests tracking the ROI of your ERG to show execs hard proof that it’s worth time, investment and effort. One formula for gauging success, per Freeman, is to subtract “costs” (the ERG’s budget) from the “benefits” produced by your group (recruitment and training cost savings from increased employee retention) to produce your “net gain.”

As for metrics, Freeman advises monitoring “Membership Participation Rate” (pictured below) and also the “Company Retention Rate for ERG Participants.” You might also keep track of “Promotion Rate for ERG Participants” to show execs how your group is rising compared to non-ERG participants.