Employee Resource Group (ERG) Budgets
Updated: Mar 11
Employee Resource Groups (ERGs) are the pulse of diversity, equity, and inclusion (DEI) within organizations. They foster belonging, attract and retain talent, and drive business results. Yet, despite their undeniable value, many ERGs face a constant hurdle: inadequate budgets.
Research from The Rise Journey reveals that 21% of ERGs operate with no budget at all why others have annual budgets which are far from adequate. While other research revealed that ‘more’ funding was the top answer (61%) for desired improvements in ERG programs.
So, how is the "right" budget determined for an ERG? It's not a one-size-fits-all answer. Effective budgeting requires strategic alignment with the ERG's goals, membership size, and planned activities.
What are Employee Resource Group (ERG) Budgets?
Here are four approaches to manage Employee Resource Group budgets.
Equal allocation: In this budgeting approach, each ERG receives the same amount of budget at the start of the year. The ERG leaders can decide on how they would like to utilize the budget over the course of the year. In this approach, all ERGs are treated equally irrespective of the number of members of each ERG.
Per-person allocation: In this approach, funds are allocated based on membership numbers. For example, if $10 is allocated for every member, then an ERG with 1000 members receives a budget of $10000 and an ERG with 500 members receives $5000. This approach encourages ERGs to increase their membership numbers.
Activity-based allocation: Funds are requested for every event or activity that the ERG wants to undertake. A detailed proposal justifying resource needs is shared with the ERG Program Manager and funds are allocated after approval. ERGs that are more active and that plan out ERG events well in advance benefit from activity-based allocation.
Hybrid: This approach combines elements of the other approaches as per the needs of the organization. All ERGs can have an equal budget or a baseline funding per member while offering additional grants for specific events or activities.
Advanced ERG management software have built-in features for budget management including providing a program-wide budget overview, allocation of budget, tracking of expenses, approvals and more.
Examples of how ERG Budgets are managed at various companies
Source: Webinar on leveraging ERGs (Watch the complete webinar here)
In this video excerpt, ERG Program Managers and DEI experts from Takeda Pharmaceuticals, Labcorp and Mass General Brigham discuss how they manage ERG budgets at their respective organizations.
How to get the most out of allocated ERG Budgets?
Here are some ways they can get more out of the program.
Seek sponsorships: Partner with relevant internal departments or external vendors to share event and program costs. For example, an ERG can work closely with the Marketing department to share their insights on consumer behavior and partner with them on an event, thus, leveraging the department's resources for increasing ERG visibility and membership.
Multi-ERG Events: Collaborate with other ERGs to pool resources and host joint events. Such collaboration provides ERGs with high membership numbers with much-needed resources for large-scale events while providing visibility to smaller ERGs and helping them utilize their budgets more effectively. Multi-ERG events can be easily planned and executed with the help of ERG management software like Teleskope.
Get creative: Explore low-cost or free alternatives for professional development sessions, communication tools, and event venues. Support local businesses and entrepreneurs from marginalized communities to share their stories and patronize their products and services.
Measure and report using the right technology: Track the impact of your activities and demonstrate ROI to secure future funding. Investing in an ERG management platform can benefit all ERGs as it reduces the hours spent by ERG Managers and Leads on manual, repetitive tasks. The long-term benefits of investing in ERG software outweigh the initial investment amount by consolidating multiple tools used for administrative purposes.
For an ERG to get funds and budget allocation, it needs to demonstrate the value it adds to the organization. When ERGs contribute as Business Resource Groups (BRGs), their strategic value becomes evident to senior leaders, stakeholders and other decision makers. By exhibiting an impact on business objectives such as employee satisfaction, employee retention, employee performance and inclusion at the workplace, ERGs can secure their place in the organizations.
By optimizing ERG budgets and maximizing resource utilization, ERGs can be empowered to ignite inclusivity, drive progress, and propel organizations towards a more diverse and equitable future.
Frequently Asked Questions (FAQs)
Is there a recommended starting point for Employee Resource Group budget allocation?
Employee Resource Group (ERG) budgets aren't a one-size-fits-all solution. Several factors influence funding, like the company's overall budget and its commitment to diversity and inclusion (DEI). The maturity of the ERG program also plays a role. Newer programs might benefit from an equal allocation approach to get things started. As ERGs mature, budget allocation can become more strategic. Established ERGs can submit proposals outlining planned activities and resource needs, while highly mature ERGs functioning as Business Resource Groups (BRGs) can tie budgets directly to measurable business outcomes.
How can ERGs measure the impact of their activities on business objectives?
ERGs can measure the impact of their activities on business objectives analyzing employee data. By comparing metrics like retention, satisfaction, tenure, and engagement between ERG members and non-members, organizations can gauge the program's effectiveness. For a deeper dive on this concept, consider downloading Teleskope’s Case Study - The Business Impact of Employee Resource Groups which explores how a global consulting firm used data to demonstrate the impact of ERGs on key business success factors.