90% of Fortune 500 companies have employee resource groups (ERGs) as part of their DEI strategy. Yet, only about 5% of companies actually compensate ERG members for the very tangible benefits their work brings to the organization.
From community building to culture work, ERG members pour hours into recruiting members, hosting meetings, designing programming, and more. They do all this for free (ERGs are typically considered “volunteer-run”) and often without recognition, balancing their day-to-day responsibilities with the needs of the employee resource groups while also navigating microaggressions at work. As a result, many ERG members – especially leaders – feel burned out by the additional work ERGs involve.
This is ironic because employee resource groups are designed to benefit members of historically marginalized groups, not burden them with thankless (and unpaid) additional work. Moreover, the majority of labor is falling into the laps of BIPOC individuals and women of color (WOC), who historically perform more invisible labor and are paid less than their White and/or male peers. In that way, ERGs can perpetuate the historical practice of undervaluing, or even dismissing, the skills and expertise of underrepresented and marginalized groups of people.
If you want to put some muscle behind your “commitment to DEI,” compensating your ERG leads is one material way to deliver on your promises. However, as paying ERG leads is a relatively new practice, it can be challenging to implement financially, legally, and from a management standpoint.
In this article, we share key questions and areas of focus to help you answer the myriad questions that come with building an equitable compensation scheme for ERG leads.
Operationalizing your intention
Deciding to pay your ERG leaders is an important step towards creating a more diverse, inclusive, and equitable world of work. In doing so, you will join organizations like Twitter, LinkedIn, Autodesk, and Culture Amp, which have stepped up and started paying their ERG leaders over the last year.
If you’re reading this article, it’s likely that you’re interested in creating a compensation model for your ERG leaders and board members. Before diving too deep, it’s important to understand that deciding to pay ERG leads is easier than actually implementing the payments (the logistics can get complicated, but that’s no reason not to do it). There’s a lot of financial and legal red tape involved, and not much precedent to follow. Preparing yourself for this potentially slow process will help you fend off any potential frustration or “diversity fatigue.”
Paying ERG leaders: A cheat sheet of questions to answer
Based on our experience implementing an ERG compensation model at Culture Amp, we’ve compiled a list of key questions to ask and answer. Take these with you when you meet with your collaborators – we promise, this “cheat sheet” will help the process run more smoothly.
What should compensation consist of?
Every company will answer this differently. When answering this question, consider the number of ERGs you have, and how each ERG is structured.
At Culture Amp, our model is based on three pillars designed to support ERG leads in advocating for their communities as well as in their own professional growth. We provide leaders with direct financial compensation (in the form of increases to their regular paycheck), professional development (through access to existing leadership development programs and ERG lead-specific training), and access to executives (through quarterly invite-only AMAs).
Justworks, on the other hand, offers a “rewards package” consisting of “cash compensation, additional stock options, budget for external participation in ERG conferences, access to management coaching, and formal mentorship.”
How much should we pay?
As part of this question, consider how many leaders per group you are planning to pay. To give you an idea, LinkedIn pays their 20 ERG co-chairs $10,000 for each year of their two-year terms. Culture Amp provides $3,000 compensation for up to 4 leads per ERG and $6,000 for 1 Chair per group.
If you’re a global company, what currencies will this be paid in?
In a global company, it’s crucial to consider whether you will provide an equivalent amount of compensation to each lead, or vary the total amount based on local salaries. Here, you might consider whether the compensation amount is a fixed fee (as in Culture Amp’s model above), or a fixed percentage based on the lead’s existing salary.
How will compensation be paid out?
The three most common ways are (1) through a bonus, (2) as a stipend, or (3) as an allowance or increase in salary.
What tax implications are there for this payment, and how can we choose responsibly?
Depending on your answer to the above question, you may incur fringe benefit taxes, or other considerations. While every company will have different considerations based on their compensation structure and the jurisdictions in which they work, companies should always try to provide maximum transparency about any of these financial impacts on ERG leads.
Do your employment or other contracts need to be updated to reflect the change in role?
If so, be sure to talk to relevant stakeholders, including your legal team, to understand what this looks like so you can properly build it into your process.
What work is the ERG lead accountable for doing to receive compensation?
In other words, what is their “job description” as an ERG lead? As clearly as possible, define the role and responsibilities of an ERG lead. Here, you may also want to define minimum performance in an employee’s full-time role as a part of the qualification for ERG leadership.
Will ERG work be considered part of, or “in addition to,” the full-time role?
Once you’ve determined how ERG lead work relates to an employee’s work, communicate with their manager to ensure workloads are managed appropriately. Being explicit about these expectations can help avoid taking advantage of ERG leads or becoming overreliant on them.
What is the process for notifying the DEI team if the employee is underperforming?
In addition, what would an “action plan” look like for an ERG lead? Defining these can help the lead, their manager, and the DEI team stay in sync.
How should managers take ERG lead work into account during performance reviews?
Also consider: how is feedback on their performance, if any, collected? For example, do you have a framework for 360° reviews in place? How about peer feedback in general?
Work with your stakeholders to discuss and come to an agreement on these key questions. Your answers to these ten questions will become the framework of your ERG lead compensation model.
Reward and recognize your ERG leaders
Are you ready to recognize ERG leaders for the valuable work they do for your organization? We hope the above cheat sheet of questions will make it possible for more organizations to turn their commitment to DEI into concrete action.
Employee resource groups help promote a sense of belonging and social connection for folks from marginalized communities. They’re communities where internal leaders emerge and provide invaluable guidance to senior leadership on DEI initiatives. When done well, ERGs cultivate opportunities for growth and leadership development. They boost retention through inclusion – which is particularly valuable during the Great Resignation. And at the heart of ERGs are the hardworking leaders who drive the initiatives that bring these benefits to life, and whose valuable work deserves to be rewarded.