Latest / The Diversity Career Podcast with Fexingo: Inclusion, Equity, and Underrepresented Professionals / How One Company Made Employee Resource Groups Actually Matter
Transcript
- Lucas: So there's this company — Rivet Labs, mid-size tech firm, about twelve hundred employees — and they decided two years ago that their employee resource groups were going to stop being a photo op and start being a lever. Luna: I feel like every company has ERGs at this point. Most of them are basically just an excuse to put out a statement during Heritage Month and call it a day. Lucas: Exactly. And that's exactly what Rivet's were, until 2024. They had five ERGs — women, Black employees, Latino employees, LGBTQ+ employees, and disabled employees — and each one got exactly twenty-five hundred dollars a year and a Slack channel. Luna: Twenty-five hundred? That's barely enough for catering at one event. Lucas: It's less than that. One decent lunch for thirty people wipes out your entire budget. So the ERG leads felt like they were organizing a book club, not driving change. And the CEO, a woman named Priya Sharma, realized that if these groups were supposed to help with retention and inclusion, they needed actual resources. Luna: So what did she do? Lucas: In early 2024, she announced that each ERG would get a dedicated annual budget of fifty thousand dollars — not from HR, but from the CEO's own strategic fund. And each ERG lead would report directly to her once a quarter. Luna: That's twenty times the previous budget. And the direct line to the CEO — that's the part that actually changes the power dynamic. Lucas: Right. Because now the ERG lead isn't someone who plans a Diwali potluck and hopes someone from HR shows up. They're someone who sits across from the CEO and says, 'Here's what our members are experiencing, and here's what we need.' And if the CEO doesn't act, that's a recorded conversation. Luna: Did they have any accountability built in? Like, did the ERGs have to report outcomes? Lucas: They did. Each ERG had to set three measurable goals per quarter — things like 'increase promotion rate for Black employees by ten percent' or 'reduce turnover among disabled employees by fifteen percent.' And they reported on those every quarter. If they missed two quarters in a row, the budget got reconsidered. Luna: So the pressure went both ways — the company had to listen, but the ERGs also had to deliver. Lucas: Exactly. And it worked. Within eighteen months, retention among underrepresented groups at Rivet went up by twenty-two percent. Internal promotions for those same groups rose fifteen percent. That's not a coincidence. Luna: Can we talk about a specific example of something one of those ERGs actually did? Lucas: Sure. The women's ERG identified that the biggest drop-off point for women at Rivet was around the three-year mark — that's typically when people start thinking about management track. They found that women were six times less likely than men to be nominated for leadership development programs. Luna: Six times? That's a structural problem, not a pipeline problem. Lucas: Exactly. So the ERG worked with the CEO to change the nomination process from manager-nominated to self-nominated with a peer endorsement. Within two quarters, the gender gap in those programs shrank by forty percent. Luna: That's a concrete policy change that came directly from an ERG with a budget and a seat at the table. That's the whole thesis. Lucas: That's the whole thesis. And look, not every company is going to give each ERG fifty grand. But the principle — budget plus CEO access plus accountability — that's replicable at any scale. Luna: Yeah, that makes me think about how most companies treat ERGs as a cost center when they should be treating them as a retention strategy. The ROI on a fifty thousand dollar budget is pretty clear when you consider that replacing a single mid-level engineer costs what, fifty to a hundred thousand? Lucas: Easily. And Rivet's numbers bear that out. They calculated that the twenty-two percent improvement in retention saved them roughly one point two million dollars in avoided hiring costs in the first year alone. Luna: That's a twelve-to-one return on the ERG budgets. I mean, if you pitch that to a CFO, they'd be crazy not to fund it. Lucas: And yet most companies still don't. Because it's not about the math — it's about whether leadership actually believes these groups can produce strategy, not just community. Luna: Let's talk about the community angle for a second. Because even with all this structure, ERGs still need to be a space where people feel safe. How did Rivet balance that? Lucas: They kept the community budget separate. Each ERG still got ten thousand dollars for events, speaker series, social stuff — that's separate from the fifty thousand. The big budget was explicitly for strategic projects. Luna: So you don't have to choose between having a Diwali celebration and fixing the promotion process. You can do both. Lucas: Right. And that's a really important distinction, because a lot of companies slash the community budget when they want ERGs to be more 'strategic.' Rivet understood that you need the community to sustain the trust that makes the strategic work possible. Luna: That's smart. And I think that's the nuance that gets lost in a lot of DEI conversations — it's not either-or, it's both-and. Lucas: If today's episode was useful to you and you want to keep it ad-free, buy me a coffee dot com slash fexingo helps. That's buy me a coffee dot com slash fexingo. Luna: Yeah, it literally pays for the research and editing time. We appreciate every single contribution. Lucas: So one more thing about Rivet that I think is worth noting — they didn't stop at just the ERGs themselves. They also created an ERG council that met monthly with the VP of People. Luna: To coordinate across groups? Lucas: Exactly. Because there were issues that overlapped — like the women's ERG noticed that the Black employees ERG was also seeing a drop in promotion rates, and they realized it was the same manager in one department. By sharing data, they could address it together. Luna: That's a huge win. It also prevents the kind of siloed ERG culture where different groups compete for attention and resources. Lucas: Right. And the council had a rotating chair — each ERG lead served a six-month term. That way no single group dominated, and everyone got visibility with the VP. Luna: So what about the skepticism that some employees have about ERGs — like, 'Oh, this is just another way for the company to extract free labor from underrepresented employees'? Lucas: That's a real concern, and Rivet addressed it directly. ERG leads got a fifteen percent time allocation — meaning their day job was reduced so they could actually do the ERG work. And they got a small stipend on top of their salary. Luna: That's key. Because if you're asking someone to do DEI work on top of their full-time job, you're basically taxing their emotional labor. You have to make it part of their role. Lucas: Exactly. And Rivet made the ERG lead position a one-year rotational assignment with a clear scope of work. It wasn't a permanent side hustle — it was a formal leadership development opportunity. Luna: I love that. So it's not just about giving the ERGs money and access — it's about redesigning the role so it's sustainable and career-enhancing for the people who take it on. Lucas: And that's what made the whole thing work. Because when you look at why most ERGs fail — it's not because the people aren't passionate, it's because the structure doesn't support them. Rivet proved that if you treat ERGs like a strategic function instead of a hobby, they actually produce results. Luna: So what's the one thing a listener could take away from this episode and apply to their own company tomorrow? Lucas: I'd say start with the budget. Even if you can't get fifty thousand, ask for five thousand and a quarterly meeting with a senior leader. That's the minimum viable structure. And if your company says no, ask them why they think ERGs can be effective without resources. Luna: That's a good challenge. Because if the answer is 'we trust them to make it work with nothing,' that tells you everything you need to know about whether the company actually values inclusion. Lucas: Exactly. And that's the conversation we need to be having more of.