ERG Lead Compensation: What to Consider When Getting Started
Employee Resource Groups (ERGs) are developed for many reasons and almost always contribute robustly to company culture. They form to support a specific demographic of employees and provide a safe space for the group. It is ironic that it is often those of the same demographic that spend countless unpaid hours leading these groups. Although ERGs contribute dramatically to organizational culture, company leaders are not always developing these groups in a way that allows them to grow and flourish.
No matter how or why we create ERGs, they build a sense of belonging for groups of employees who are likely currently marginalized or have been in the past. The purpose of an ERG is to provide resources, build community, and serve as a point of connection for these groups. This helps create sustainable and supportive environments that allow employees to grow. When structured effectively, ERGs drive inclusion and contribute to higher retention and productivity rates, benefiting the entire company.
The Latest on ERG Lead Compensation
ERGs can be found in 90 percent of Fortune 500 companies. Successful ERGs are not possible without dedicated leadership. ERG lead compensation is currently a hot topic. LinkedIn, Twitter, and Autodesk recently shared publicly that they are compensating leads but provided little details into how they are structuring their approach. According to The Rise Journey’s 2021 State of the ERG Report, there is an increase in organizations across the board that are considering ERG lead compensation. It is clear that the majority of organizations do not compensate in any form. This means that there is work to be done to keep the momentum going to ensure that unpaid labor is avoided.
Acting as an ERG lead means extra work and responsibilities in addition to one’s day-to-day role. It can also demonstrate the organization’s commitment to not only the lead’s career success but the success of the overall group.
It is important to keep in mind that every organization is unique and requires an individualized program structure. Here are some things to consider when making a business case for ERG lead compensation at your organization.
1. What is the best form of compensation? (Hint: Cash is king.)
The compensation conversation does not just revolve around if an organization compensates, but how it compensates. While all forms of compensation show that an organization values this work, ultimately, cash is king. The majority of employees taking on ERG work are underrepresented in the workplace, and therefore historically underpaid for their 9-to-5 role. By compensating leads in monetary form, the organization is not only showing commitment to the work but showing commitment to breaking cycles of pay inequity. Monetary options range from hourly wage, stipends, bonuses, and spot bonuses. Whatever the rate is, paying leads will show your organization as a leader in this space for recognizing this work. If a company cannot or will not pay, be sure to propose as close to an equivalent form of compensation as possible.
*Image from The Rise Journey’s 2021 State of The ERG Report
2. How do you determine the compensation amount?
When deciphering the most equitable pay decisions for your leads, there is no right answer on how much to compensate. You should always start by conducting an internal survey to get an idea of the current work distribution. Then, build out a guide to support how much work is appropriate and expected.
Rather than expecting to have exacting rationale behind how much, instead focus on the impact that each ERG expects. Work with the leaders to focus on the work, its impact, and relevant metrics to track progress and outcomes. Each ERG can operate differently, but it doesn’t mean one has a “better” impact than another. Be sure to:
- Set up a review process to evaluate how the ERG leads are doing.
- Have a regular (often annual) discussion around whether the compensation amount is appropriate.
- Clearly outline goals and expectations of ERG leads.
The graph shows some back-of-the-envelope math. Compensating at minimum for five hours a week, $15/hour with a quarterly payout plan is somewhere to start. This pay rate (which is not a living wage) is the lowest hourly rate that should be paid for the work.
*Image from The Rise Journey’s 2021 State of The ERG Report
3. What should you clarify when building ERG lead structure and budget?
ERG budgets should not be inclusive of ERG lead compensation. The first thing you need to ensure is that “ERG Lead Compensation” is a separate line item in a company’s budget, meaning that during the upcoming budget planning cycle, this number can change or increase based on success.
Clarity is key. To support an effective business case for ERG lead compensation, start by revisiting your criteria for all ERG roles. Some questions to address include:
- Do employees need tenure to take on a lead role?
- What is the process of electing someone to an ERG lead position?
- What is the duration of each position’s term?
- Can the individual be on a Performance Improvement Plan and act as an ERG lead? Make sure to clarify what steps you take if they are not hitting work-related goals or are not clearly demonstrating organizational values.
- How does an ERG lead use or request budget? What is the difference between the two? (i.e. over a certain dollar threshold approval is needed vs. a lead being able to make the decision on their own)?
- Will they need to use technology as part of their role (project management tools, ERG software, intranet, internal blog, etc.)?
- What do they need to communicate to their DEI/HR lead or executive sponsor?
- Can an ERG leadership role lead to other leadership roles? How?
Do your research, know your organization, and utilize your resources. Your employees will notice and your company culture will be better for it. The future of work is now and it is about time for unpaid labor to remain in the past. For more insight on implementing effective ERG lead compensation practices, read The Rise Journey’s full report: State of the ERG 2021.