Companies across the commonwealth are struggling to find enough workers to meet their labor demands, a pre-pandemic labor problem that came home to roost when COVID-19 shook up the economy. In addition to seeking employees to fill those vacancies, many large firms are leaning farther into strategies to diversify their workforces and retain and develop their current employees.
Having a diverse workforce makes good business sense: Research shows that companies in the top quartile for gender or racial and ethnic diversity are 35% more likely to have financial returns above their respective industry medians. Diversity fosters innovation and creativity through a greater variety of problem-solving approaches, perspectives and ideas, according to a diversity study by global management consultant firm McKinsey & Co.
Many Kentucky companies from various industry sectors are implementing and utilizing employee resource groups (ERGs) to help meet their diversity and inclusion goals.
Employee-led and driven network resource groups (NRG), as they’re called at Humana, provide a sense of belonging and community, while fostering inclusion across the company, said Tyson Bauer, diversity and inclusion lead at the global health care company headquartered in Louisville.
At Toyota Motor Manufacturing Kentucky (TMMK) in Georgetown, Ky., more than 1,200 of its 8,000 team members participate in ERGs, which it calls business partnering groups (BPGs).
“We view BPGs as a great resource to engage, educate, develop and connect with our team members,” said Sandy Nott, vice president of administration at TMMK.
Global spirits company Brown-Forman, headquartered in Louisville, created ERGs in 2009 and now has chapters on all six continents where it has employees. The groups “support the company’s efforts to attract and retain the best talent, promote leadership and development at all ranks, build an internal support system for workers within the company, and drive inclusion among employees at all levels,” said Cynthia Williams, vice president of diversity and inclusion.
Republic Bank started its first employee group in early 2019. It now operates six ERGs, and in 2020, the Louisville-based bank hired its first director of diversity and inclusion to oversee the ERGs and all its internal and external diversity efforts.
Candymaker Perfetti Van Melle in Northern Kentucky created a diversity, equity and inclusion ERG about three years ago to further develop its culture of inclusivity, said Sylvia Buxton, president and CEO. The group, comprised of volunteers, creates educational programming and celebration events throughout the year.
ERGs vital to D&I strategy
Employee resource groups are a critical piece of an organization’s diversity and inclusion strategy, according to Diversity Best Practices, a firm dedicated to advancing DE&I in the workplace. ERGs can empower employees and help companies recruit and retain the best workers.
“If a company has established goals to foster an inclusive culture rooted in diversity and equity, starting employee resource groups is an ideal first step forward,” Humana’s Bauer said.
The Society for Human Resources Management defines ERGs as voluntary, employee-led groups that come together based on a common interest or background, such as race, ethnicity, gender, disability, sexual orientation, parental status, national origin, religion or belief. While ERGs typically have a focus area, the groups are usually open to all employees and typically have an executive sponsor.
All of TMMK’s groups have an executive sponsor, Nott said.
“Last year at our Georgetown site, we started including senior manager advisors to further engage with middle management, exposing them to talent within the BPGs and to further develop their D+I leadership skills and competencies,” she said.
Perfetti Van Melle’s DE&I employee group is led by two executive leaders who help “guide the group and serve as a bridge to the full Perfetti Van Melle North America leadership: our vice president of human resources and our vice president of process and technology,” said CEO Sylvia Buxton.
About 12 to 15 volunteers from the group make up the company’s core volunteer team, called the DE&I team, which serves as a sounding board to Perfetti’s leadership as the company explores how to expand its overall diversity, equity and inclusion efforts in the company and community, Buxton said.
“At the highest level, our DE&I resource team helps inspire and empower our employees by keeping front and center one of our six core company values—social and environmental responsibility,” she said. “Throughout the year, this resource group serves as an outlet for our employees to learn, celebrate our differences and surface concerns and ideas to our leadership.”
More than 30% of Humana’s employees actively participate in one of its nine employee groups, with membership nearing 15,000 for the first time in company history, Bauer said. Humana’s groups enhance the employee experience and provide professional development and networking opportunities, which opens doors to career advancement.
About 75% of Brown-Forman’s salaried U.S. employees are members of an ERG, with some participating in more than one group.
“Our ERGs are founded by employees, for employees, so they are a great representation of the many ways our employees define diversity, from demographics like age to lifestyle choices,” Williams said. “These ERGs have really become part of the company and our culture.”
At TMMK, group members contribute and connect in ways beyond their typical job duties, which helps create more opportunities for engagement across Toyota and leads to greater education and awareness—resulting in a more inclusive environment, which affects recruiting and retention, Nott said.
ERGs play a key role in driving a culture of diversity at YUM! Brands in Louisville by providing networking, mentoring, educational workshops and leadership development opportunities across the company and in the communities in which it does business, the global restaurant brand said.
American Water launched its first employee business resource groups in 2021, starting with a Women’s ERG and a Together We Stand group for Black/African American employees and their allies.
Affinity networks at GE Appliances provide employees exposure and networking opportunities internally to business leadership and externally to community leaders. They also give employees a voice.
“At GE Appliances, we know our differences are our greatest strength. It’s only through the power of unique perspectives, experiences and backgrounds that we’re able to design and build products that make everyday life better,” said A.J. Hubbard, global senior director of inclusion and diversity and GE Appliances. “That’s why we aim to create a culture that values every voice, isn’t afraid to ask ‘what if?’ and realizes the potential of all people. Because when diversity meets inclusion, the best ideas emerge.”
When employees can bring their authentic self to the workplace, they are empowered to do their best work, said Bauer.
“Empowerment comes from the opportunity to support internal company culture and amplify marginalized communities,” he said.
Empowered employees beneficial to business
In addition to supporting a culture of diversity and inclusion, ERGs bring many benefits to organizations. Potential internal leaders can be identified and developed, educational opportunities are provided across the company, and retention rates are higher. Employers in this kind of environment find it easier to recruit underrepresented individuals and develop a robust talent pipeline.
Amazon has 13 ERGs with thousands of employees in its Kentucky chapters, said Andre Woodson, Amazon spokesperson for Kentucky operations. The company believes people do their best work in an environment that is welcoming and inclusive, he said.
“We actively recruit people from diverse backgrounds to build a supportive and inclusive workplace as well as take steps to ensure employees have a sense of belonging, value and opportunity,” Woodson said. “We know that representation is critical to accomplishing our goal as we strive to be Earth’s best employer, and that diverse leaders attract and retain diverse talent. We are investing in growing these leaders from within.”
ERGs also increase employee engagement, produce valuable feedback and inspire collaboration that fosters innovation.
Diversity and inclusion are assets that drive innovation and provide insights that help Humana better serve its customers, Bauer said.
“NRGs help us see through their diverse lens while making business decisions,” he said.
Humana’s groups collaborate with business development, sales force, clinical and health equity departments and others to help Humana better understand and serve marginalized consumers, he said.
“Our NRG leaders and teammates help us advance diversity of thought and proactively contribute to innovative, insightful business decisions that benefit our ever-changing, diverse members,” said Humana CEO Bruce Broussard.
Employee resource groups at Humana provide a safe space for open dialogue and opportunities to learn how to be a better ally to marginalized community, he said.
Brown-Forman’s 10 ERGs have been instrumental in influencing how the company approaches employee benefits and policies, Williams said.
“For example, our HR team used input from GROW (the women’s group) for its flexible work policy, while conversations with young professionals group prompted a review that resulted in a new dress code policy,” she said.
YUM’s multicultural ERG, called Yum! Era, provides feedback on marketing materials for the company’s brands. Its young professionals ERG has participated in think tanks for KFC U.S., dividing into teams and pitching potential new products to senior leadership, who then explored opportunities to bring concepts to market, the YUM report said.
How to be more inclusive
Many Kentucky businesses are beginning to take an honest look at their company culture to find ways to be more inclusive. Some companies are investing in hiring a diversity and inclusion officer or setting up diversity committees that help inform decisions.
Katrice A. Albert was recently named vice president for institutional diversity at the University of Kentucky. She has decades of experience as a national leader for diversity, equity and inclusion as well as community engagement.
“Any company that really wants to excel, especially with all of the metrics that companies need to excel in—return on investment, the ability to grow their company; diverse teams are better do that,” Albert said. “The first thing is, the leader has to be really committed to inclusive excellence. Inclusive leadership starts at the top.”
She recommends professional development opportunities that allow leaders to grow their cultural intelligence, so that they learn how to be diverse in recruiting and hiring, how to set set up employee resource groups, and how to have brave conversations, she said.
Companies can’t “just wish” they were more diverse, Albert said. They have to learn how to do it correctly, and they need benchmarks to measure their progress.
Leaders need to ask employees—people of color, members of the LGBTQ+ community and other minorities—how the company is doing and then truly listen to the answer.
Ashley Duncan, director of diversity and inclusion at Republic Bank, said an open and honest dialogue with employees is critical.
“When asked, most of the time employees will share their thoughts on how to grow, enhance and create more diversity within the respective organization,” Duncan said.
Companies can start by examining their hiring practices, Albert said. Are there barriers for women or people of color to join the company? Is the company contracting with minority-owned businesses? Are leaders trying to grow their cultural knowledge?
Buxton of Perfetti Van Melle said it is important that any efforts to be more inclusive be genuinely tied to a company’s values and that leaders “walk the talk.”
TMMK’s Nott said companies should develop a long-term strategy to address the areas that need improvement and measurable goals for determining progress.
“As your D+I efforts begin to grow, look for ways to hold yourself accountable and ensure any audits use inclusion as a fundamental metric,” she said.
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