Balancing People And Profit Margins
Last week, Meta CEO Mark Zuckerberg announced a shift away from incorporating diversity, equity, and inclusion strategies in hiring. This marks a significant and high-profile move in the growing trend of corporations scaling back DEI initiatives. The question remains: what now?
In an internal memo originally reported by Axios, Meta announced an immediate move away from its DEI programs by sunsetting supplier diversity targeted programming and its “Diverse Slate Approach” to hiring. The memo cites cost-cutting measures and changing cultural priorities as reasons for the change.
Yet, what is interesting is, even amid the retrenchment around hiring and supplier diversity, Meta detailed its employee resource groups (ERGs) have remained largely intact, suggesting that their value to corporations lies beyond DEI strategies.
Buried deep in the memo written by Meta Vice President of People Janelle Gale is the following statement:
“We build connection and community. We support our employee communities, people who use our products and those in the communities. We operate our employee community groups (MRGs) continue to be open to all.”
But how can Meta and other organizations complete this mission while eliminating diversity, equity, and inclusion strategies?
The Disconnect Between DEI And ERGs
While DEI initiatives aim to create structural organizational change, ERGs often function as an arm of that change. For years this has been a starting standard in building a diversity, equity, and inclusion strategy: build employee resource groups. However, according to Maceo Owens, also known as The ERG Homegirl, they are best utilized as an employee engagement tool, outside DEI strategies. This distinction, according to Owens, is critical yet often misunderstood.
"I don’t actually think that companies are pulling back in the way that people think,” says Owens. “But I think that the news has kind of framed it as this clickbaity title, like 'corporations hate DEI.'"
Owens continues, "at the end of the day, it’s about good culture— no one's attacking that. No one is attacking belonging."
ERGs are often mistaken for extensions of DEI programs, but as Owens noted, they serve fundamentally different purposes. DEI is strategic, focusing on hiring, benefits, and long-term organizational equity. By contrast, ERGs are operational, concentrating on improving the day-to-day employee experience.
Owens emphasized that this misunderstanding often leads to overreach, with ERGs being asked to drive business outcomes without the resources or clear direction to do so. For example, passionate ERG leaders may push for initiatives that align with DEI goals but inadvertently create tension with legal, financial, or organizational boundaries.
“ERGs are not a replacement for DEI,” Owens explained. “They are about creating safe spaces and improving employee engagement, not driving systemic change.”
ERGs As Employee Engagement Strategies
Employee engagement is a crucial component of organizational success, and ERGs play a pivotal role in this space. Research consistently shows that engaged employees are more productive, less likely to leave, and contribute to a positive workplace culture. Companies investing in ERGs often see cost savings through reduced turnover and increased morale.
However, for ERGs to succeed, they must have clear boundaries and expectations. Owens noted two recurring challenges: a lack of structure and overly ambitious goals. Without clear guidance, ERGs can become overextended, leading to burnout among their leaders and confusion about their role within the organization.
"Encouraging ERGs to impact commerce in a company... they're not supposed to do that. And there’s a lot of legal things that come up when ERGs even touch things like" commerce.
“ERGs should focus on providing niche programming for specific groups and universal programming that benefits everyone,” Owens said. This dual approach ensures that ERGs remain inclusive while meeting the unique needs of underrepresented employees.
The Business Case For ERGs
ERGs, when implemented effectively, provide measurable benefits to organizations. They improve employee satisfaction, foster a sense of belonging, and contribute to a positive workplace culture. These outcomes translate into cost savings through reduced turnover, enhanced productivity, and stronger team cohesion.
As Owens pointed out, the key to ERG success lies in balancing their role as safe spaces for employees with the broader needs of the business. By focusing on engagement rather than systemic change, ERGs can thrive without the pressure to deliver outcomes beyond their scope.
Looking Ahead
The future of workplace inclusivity may depend on a more nuanced understanding of DEI and ERGs. While DEI initiatives tackle systemic barriers, ERGs create the immediate sense of belonging that keeps employees engaged. Both are essential, but their roles must remain distinct to ensure their effectiveness.
As corporations navigate the tension between people and profit margins, the continued resourcing of ERGs signals a recognition of their value. However, success will require clear communication, structured support, and a commitment to prioritizing employee engagement as a strategic priority.
Balancing people and profit is no small feat, but with intentionality and clarity, companies can create workplaces where both can thrive.
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