Consumer Insights From Within
Insights from a wide range of employee resource groups are bringing new products and new consumers to a grocery aisle near you.
Employee resource groups have a new mission: to increase profitability.
Three decades after American companies first created employee resource groups (ERGs) to boost recruitment and retention, they're growing in stature as they take on new missions linked more closely to product development — and the bottom line.
ERGs are still dedicated to fostering a better work environment and providing networking and skill-building opportunities for diverse employee groups. But in many retail and consumer products companies, they're becoming go-to resources for insights on marketing, merchandising, packaging, community relations and more.
Kellogg Co., for example, has more than 2,600 employees in its six affinity groups, and these employees aren't just tackling workplace issues.
Kellogg African-American Resource Group (KAARG) and Kellogg Latino Employee Resource Group (¡Hola!) members have analyzed television ads — some for Kellogg, some for its competitors — directed at African-American and Hispanic consumers. The effort has helped Kellogg better communicate with these markets, and some Kellogg TV spots were developed specifically with ERG members' feedback in mind.
¡Hola! pushed to have contact information in Spanish on product packaging and hosted a Hispanic ideation event at which members brainstormed advertising, promotion and new products. In turn, the Kellogg North America leadership team has reached out to the company's ERGs for advice on incorporating the groups into business plans. The result: Leaders have committed to involve more ERG members in product and marketing focus groups; to mentor diverse, high-potential employees; and to create job-shadowing opportunities for ERG members to experience a "day in the life" of a leader.
New Flavors
Many ERG suggestions are making it onto grocers' shelves. ConAgra Foods reached out to its Asian ERG to help develop a new line of Healthy Choice Steamers and gained impressive results in the frozen food aisle. The Frito-Lay division of PepsiCo involved its Latino ERG in new product development and began offering Hispanic-friendly flavors, a move that increased sales.
At Newell-Rubbermaid, the objectives of the Hispanic Organization for Latinos (HOLA) include identifying areas for improvement in attracting, retaining and engaging Hispanic employees, and helping the company more effectively market its brands to Latinos.
The alignment of ERG activities with business goals has created a new level of ERG engagement and support, according to ERGs Come of Age: The Evolution of Employee Resource Groups, a 2011 Mercer report that surveyed 64 employers. Other factors behind reinvigorated ERGs include increased marketing of the groups to employees and the creation of new ERGs based on culture, age and common interests like the environment.
The average annual budget for ERGs reported by survey participants is $7,203 per every 100 ERG members. Many companies are spending six figures every year on ERGs.
On average, the companies surveyed have 1.4 full-time equivalent employees dedicated to the management, coaching and coordination of their ERGs, with many additional work hours logged by members, executive sponsors and others.
The payoff for these efforts? A virtuous circle where ERG involvement in providing real business solutions leads to greater profitability and more excited and engaged employees.
Joan Toth is president and CEO of the Network of Executive Women (NEW), which has more than 5,000 members from more than 400 companies and 72 national sponsors in 19 regions in the United States and Canada. For more information, visit www.newonline.org.