Inclusion & Diversity Employee resource groups (ERGs) & Staff Networks: How should they be funded?

My route into working in inclusion and diversity started with staff networks so that I could appreciate first-hand the value they can bring to the workplace. Staff networks, or employee resource groups, are great places for colleagues to come together to support, educate, and uplift each other. This blog will focus on the world of funding and staff networks – so let’s dive into it.

What is an ERG, and why are they important?

Employee resource groups (ERGs) are employee-led networks within a business that support a particular community, such as a group based on gender, race, sexual orientation, or disability. ERGs are crucial to promoting diversity, equity and inclusion within a company. This is because they create a safe space for employees to connect with others who share similar experiences and to discuss the issues that affect them as individuals and employees. Staff networks also provide opportunities for personal and professional development, which can lead to increased employee engagement and retention, as well as (equally importantly) increased job engagement and satisfaction!

Should an ERG be funded?

In the UK, there is no legal requirement for a company to fund an ERG, but there are several reasons why funding an ERG is beneficial:

1. Demonstrates commitment to diversity and inclusion: Funding an ERG shows that a company is committed to creating an inclusive work environment and is willing to invest in that effort.
2. Increases engagement and retention: ERGs help create a sense of belonging and community for employees, which can lead to increased engagement and retention.
3. Provides resources for events and initiatives: ERGs may organise events, training sessions, and other initiatives to support their community. Funding can help provide the resources needed to make these events successful.

Ultimately, ERGs are more likely to be empowered to make change knowing they have both financial and, consequentially, an implicit cultural buy-in from their company.

Considerations for assigning a budget to a network

Most staff networks and I&D committees need an annual budget of some kind to support their work. While many networks achieve a lot with very little financial support, having access to a set budget helps to ensure their work has impact across the business. Additionally, by setting out clear processes you support networks to manage their own budgets.

ERG financial governance could consider the following:

• Setting a budget, an equal amount for each staff network. Network leads or chairs should either be or assign the budget holder, who is responsible for managing the budget throughout the year. For Staff Networks with more formal structures, the role of Treasurer may be helpful.
• Networks in which members have clearly defined roles might benefit from having a budget assigned to their individual pillars from the overall budget pot (i.e. Communications, Events, Philanthropy, etc.). This helps ensure transparency amongst members and encourages ownership from multiple members.
• How the budget is managed should be set out in the network terms of reference. You might consider setting terms of reference for guidance – for example, how the budget could be used to support employees or the Network strategy.
• Ideally, Networks should have an annual plan that schedules their objectives and events for the year. This plan can then be used to plan for budget spend and ensure that the network’s budget can cover more costly events (such as conferences, parades, etc.).
• You might encourage your networks to present a budget proposal to your Company’s treasurers on how they intend to spend their money and how that aligns with their strategy. This encourages transparency and dialogue between the Network and other stakeholders in the organisation.
• If Networks look to be going over their budgeted spend or wish to pay for a one-off large event or programme, support them in writing a business case to request the additional funding.
• Similarly, Networks can combine their budgets to run pan-network activities, programmes and events. This has the added benefit of promoting intersectional collaboration between networks.

Considerations around paying staff and percentage pay proportions (Is this really equitable?)

ERG leaders are typically volunteers, but some companies pay ERG leaders or provide them with a budget for ERG   initiatives. If a company decides to pay ERG leaders, it’s important to consider the following:

1. Transparency: The process for selecting ERG leaders and determining their pay should be transparent and equitable.
2. Compensation: ERG leaders should be compensated fairly based on their level of responsibility and time spent on ERG activities.
3. Percentage proportion of pay: The percentage of pay that ERG leaders receive should be consistent across all ERGs to avoid any perceived favouritism.

There is debate as to the best way to remunerate the work of volunteers in the ERG space, which depends on the individual company. Some might think that the work should be directly renumerated, but paying ERG leaders directly might limit their independence. There is no one size fits all, but the principle of valuing and protecting volunteer contributions should be at the heart of any financial decisions.

If you’re not paying your ERG leaders there are still things you can do to compensate people for volunteering their time to further business interests. You can provide development opportunities for ERG leaders, such as network lead training, to show you’re invested in their development and progression as part of this role. You can also implement protected time, sometimes called facility time, so people will have time in their week to carry out their role. This can be helpful to encourage line managers to support team members that are involved in ERGs and avoid resource gaps in teams.

Business impact

Staff networks can have a significant impact on a company’s bottom line. Here are some of the ways that staff networks can benefit a business:

• Improved recruitment: ERGs can help attract diverse talent to a company, which can improve recruitment efforts.
• Increased retention: ERGs can create a sense of belonging and community for employees, which can lead to increased engagement and retention.
• Enhanced brand reputation: A company that invests in diversity and inclusion initiatives, including ERGs, can enhance its brand reputation and attract customers who value diversity.

Members legal rights

As with all employees working for an organisation, ERGs have to abide to the Equality Act 2010. ERGs cannot discriminate against employees based on protected characteristics, and companies cannot retaliate against employees for participating in ERGs. Additionally, if you work in the public sector the Public Sector, Equality Duty sets out the responsibility to pay due regard to fostering relations and decrease discrimination, something that staff networks directly support.

In conclusion, funding for ERGs can have a transformative impact on a company’s diversity, equity and inclusion efforts. Companies should consider the benefits of funding ERGs and ensure that any compensation for ERG leaders is transparent and equitable. ERGs are protected under UK law, and companies cannot discriminate against employees for participating in ERGs.

How Inclusive Employers can support organisations in creating and maintaining staff networks

Take a read of our Member’s resources- not yet a member, why not take a look at our membership benefits?

• Guide to staff networks

• Global staff networks

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