How Employee Resource Groups (ERGs) Boost Retention—and How to Build Them

Employee turnover is costly—and it’s not just about the money. Every departure means lost knowledge, lower team morale, and additional strain on those who remain. According to Gallup, replacing an employee can cost anywhere from one-half to two times their annual salary. For employers looking to strengthen retention, the solution isn’t always a bigger paycheck. Often, it’s about creating a workplace where employees feel valued, heard, and connected.

That’s where Employee Resource Groups (ERGs) come in. ERGs are employee-led groups that bring together people with shared identities, experiences, or interests—like women in tech, LGBTQ+ employees, veterans, or working parents. Far from being “nice-to-have” initiatives, ERGs are powerful tools for retention, engagement, and long-term business success.

In this post, we’ll explore why ERGs matter for retention, and give you a step-by-step framework for creating and sustaining them in your workplace.

What Are ERGs?

Employee Resource Groups (ERGs) are voluntary, employee-led collectives that focus on creating community and support within organizations. Typically organized around shared backgrounds or experiences—such as race, gender, sexuality, veteran status, disability, or caregiving responsibilities—ERGs provide spaces for employees to connect, advocate, and collaborate. Importantly, ERGs are not only beneficial for those who identify with a specific group; many also welcome allies, creating broader understanding and engagement across the company.

Many leading employers have shown how impactful ERGs can be:

• Microsoft’s Disability ERG has been instrumental in shaping accessible product design, ensuring technology is inclusive for users worldwide while also improving retention among employees with disabilities.
   
• Salesforce’s Equality Groups, which include ERGs for women, LGBTQ+ employees, and underrepresented minorities, are closely tied to the company’s DEI strategy. These groups have helped Salesforce strengthen its reputation as an inclusive employer, making it more attractive to top talent.
   

When supported by leadership, ERGs like these can become key drivers of inclusion, retention, and innovation.

1. ERGs Drive Retention Through Belonging and Engagement

One of the biggest predictors of employee retention is a sense of belonging. When employees feel they’re part of a community, they’re more committed to their work and less likely to seek opportunities elsewhere.

• Salesforce research shows employees with a strong sense of belonging are 4.6 times more likely to feel empowered to perform their best work.
   
• Companies with engaged employees report lower turnover compared to those without high engagement levels (Gallup).
   

ERGs provide this sense of belonging by creating safe spaces where employees can connect with others who understand their challenges and experiences. For underrepresented groups especially, this connection can be the difference between feeling isolated—or feeling at home.

2. ERGs Also Boost Innovation, Morale, and Brand Value

Retention isn’t just about keeping people in their seats; it’s also about keeping them inspired. ERGs can directly fuel innovation and brand reputation.

• Employees in ERGs often surface new ideas that reflect diverse perspectives, which can improve product design, marketing strategies, and customer outreach.
   
• A Deloitte survey found that 83% of millennials are more engaged when they believe their company fosters an inclusive culture. ERGs play a major role in shaping that culture.
   
• For younger generations, ERGs are a deciding factor: around 70% of Gen Z job seekers say they’re more likely to apply to a company with ERGs, and over half report ERGs influence their decision to stay.
   

In short, ERGs aren’t just internal retention tools—they’re talent magnets that strengthen your employer brand.

3. How to Create and Sustain ERGs: A Step-by-Step Guide

Step 1: Define Purpose and Mission

Successful ERGs begin with clarity. What’s the group’s purpose? Is it to provide networking, advocate for inclusion, or create professional development pathways? A mission statement aligned with both employee needs and business goals will set the tone.

Example: “Our mission is to empower women in STEM through mentorship, advocacy, and professional development opportunities.”

Step 2: Assess Interest and Gather Data

Survey employees to see what groups they’d join. Look at retention and engagement data—are certain populations leaving at higher rates? ERGs can help close those gaps.

Example: If you notice higher turnover among early-career employees, an “Emerging Professionals” ERG could provide peer support and mentoring.

Step 3: Secure Executive Sponsorship

ERGs thrive when leaders show support. An executive sponsor can provide budget, visibility, and influence. Sponsors also help ensure the ERG isn’t siloed but connected to broader company priorities.

Tip: When pitching leadership, tie ERG goals to outcomes they care about—like retention metrics, employee satisfaction scores, or recruitment pipelines.

Step 4: Launch Thoughtfully

Start small. Launch one or two ERGs rather than a dozen at once. This allows you to test what works, gather feedback, and refine the model.

Promote the ERG widely and invite allies to join. Allies expand the network, amplify the ERG’s voice, and foster greater inclusion across the organization.

Step 5: Build Structure & Offer Resources

ERGs need structure to be sustainable. Define leadership roles (chair, vice-chair, event lead) and give them the tools to succeed—such as budget for events, communication platforms, and time allocation for ERG activities.

Consider providing leadership training for ERG leaders. Leading a group develops valuable skills like project management, communication, and cross-team collaboration.

Step 6: Boost Engagement and Impact

ERGs succeed when members feel they’re making a difference. Go beyond social gatherings and include professional development, volunteer projects, or advocacy initiatives.

Examples of high-impact ERG activities:

• Mentorship programs pairing senior and junior employees.
   
• Hosting panels during cultural heritage months.
   
• Partnering with community nonprofits for service projects.
   

These efforts deepen the sense of purpose while aligning with company values.

Step 7: Align with Strategy and Avoid Silos

ERGs shouldn’t operate in isolation. Connect their goals to the company’s DEI strategy, talent development programs, and business objectives. This ensures ERGs are seen as essential contributors, not side projects.

Encourage cross-ERG collaboration (e.g., a Women in Tech group partnering with a Working Parents group). This builds solidarity and reduces fragmentation.

Step 8: Measure, Report, and Iterate

Like any business initiative, ERGs need to demonstrate impact. Track participation rates, event attendance, and employee satisfaction scores. Look at turnover data among ERG members versus non-members.

Share wins with leadership: “Turnover among members of our Veterans ERG is 25% lower than the company average.” Data like this strengthens executive buy-in and secures long-term investment.

Final Thoughts: ERGs Are Retention Powerhouses

Employee Resource Groups are no longer optional feel-good initiatives—they’re strategic assets. By fostering belonging, sparking innovation, and signaling commitment to inclusion, ERGs directly influence retention and engagement.

For employers, the message is simple: if you want employees to stay, help them feel like they belong. Supporting ERGs is one of the most effective ways to make that happen.

By starting small, aligning with strategy, and sustaining them through resources and leadership support, ERGs can transform your workplace into a community where people don’t just work—they thrive.