Employee Networks

By Jennifer Taylor Arnold Jun 1, 2006
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HR Magazine, June 2006Supporting affinity groups allows some companies to reach and retain more-diverse talent.

Texas Instruments (TI) has a lot to offer potential employees. But a few years ago, the recruitment staff at the Fortune 200 semiconductor company ran into a challenge: An engineer the company was interested in hiring was reluctant to join TI because she feared the Dallas location would not be welcoming to an Indian woman.

Fortunately, the company was prepared to address her concerns. At the request of recruiters, representatives of TI’s Indian Diversity Initiative, a network of Indian-American employees, spoke with the candidate and shared their experiences. “When she heard about the Indian network, it was key in her making her decision,” says Terry Howard, diversity director.

For companies with employee network groups like TI’s, such an experience is not unusual. Employee network groups provide a variety of benefits to employers as well as employees. Such groups offer employers opportunities to recruit and retain more-diverse talent and to gain broader perspectives on company practices and products. Also, members’ broad cultural experiences can help a company increase its global awareness and extend its reach in the marketplace.

But companies that tap the resources of employee network groups are still in the minority: The 2005 Workplace Diversity Practices Survey Report by the Society for Human Resource Management (SHRM) showed that only 29 percent of surveyed companies support employee network groups.

Diversity experts say the other 71 percent are missing a great opportunity—and that even companies with affinity groups may not be maximizing their potential. “Employee networks have been completely underutilized in a lot of organizations,” says Mauricio Velásquez, president and chief executive officer of The Diversity Training Group, a diversity training and consulting firm based in Herndon, Va.

A Natural Affinity

Employee networks—also known as affinity groups or employee resource groups—are formed around a variety of issues, including ethnicity, age, sexual orientation and disability.

“They are usually associated with a particular culture or perspective that has had some challenges in the workplace,” explains Nancy McMillan, associate consultant for workforce partnering at Indianapolis-based pharmaceutical company Eli Lilly, which supports eight affinity groups.

While the first networks were formed in the late 1970s and early 1980s and usually were focused on race and gender, such groups today are likely to be recognized for delivering bottom-line benefits.

Diversity professionals say employee networks are critical for any company pursuing “reduced costs associated with turnover, absenteeism and low productivity,” an “improved bottom line” and “increased organizational competitiveness,” the top reasons for launching diversity initiatives, according to the SHRM report.

“I think employee networks are part and parcel of any effective diversity strategy,” says TI’s Howard. “I can’t imagine working in an organization that didn’t have them.”

Gaining in Recruitment And Retention

As the TI example illustrates, affinity programs can be a boon for recruitment efforts, by providing a built-in comfort zone for diverse new hires. “They are valuable to employees from a connectivity standpoint,” says McMillan. “Candidates get the feeling that they can come here and immediately have a group of people they have a lot in common with.”

Affinity groups can also play a more active role in recruitment. At Ford and at technology giant Hewlett-Packard (HP), employee resource group members attend college job fairs and professional organization events with company recruiters to connect with diverse candidates. Affinity groups at Eli Lilly put together information about the community for the recruitment staff. “If someone comes in for a plant visit, we will provide them with the material so they can see just how diverse Indianapolis really is,” says McMillan.

To retain those diverse recruits, companies need to make sure they are fulfilling their diversity promises. Affinity groups can aid in this effort as well, by providing valuable feedback on initiatives. At Sonnenschein Nath & Rosenthal LLP, a law firm with 700 employees in offices around the world, the gay and lesbian attorneys association (GALA) reviewed the firm’s diversity materials and pointed out inconsistencies—noting, for example, that sexual orientation was not mentioned on the diversity page of the firm’s web site. “We wanted to make it very clear that, particularly for recruiting, the firm was gay-and-lesbian-friendly as opposed to tolerant,” says Farrington Yates, a partner at Sonnenschein’s New York office and co-chair of GALA.

Similarly, network groups can provide feedback on internal policies that are important to their constituencies. For example, a group for parents at Sonnenschein broached topics such as emergency day care, part-time work schedules and extended parental leave benefits. This type of give-and-take opens the lines of communication and demonstrates to all employees that the commitment to diversity is real. “People that feel listened to have a vested interest in staying and seeing it through,” says Velásquez.

Diversity experts say such efforts pay off by helping to create a collaborative, inspired atmosphere. “When you have the diversity in the organization, everyone is allowed to come to the table and participate,” says Sidalia Reed, vice president of global inclusion and diversity at HP. “That breeds creativity and innovation. That’s what really makes diversity a successful value proposition.”

Reflecting the Marketplace

Organizations want to attract and retain a diverse workforce not just because it’s the right thing to do but also because employees who mirror the marketplace put companies at a competitive advantage. “We need to understand diverse buying needs,” says Allison Trawick, a manager in Ford Motor Co.’s corporate diversity and work/life office in Dearborn, Mich. “We look to all employees to help us build that kind of environment.”

Affinity groups can boost organizational competitiveness by providing valuable insight into the needs and wants of certain segments of the marketplace. “Look at them not just as employees but as potential customers,” says Velásquez. “Allow them to comment on the organization completely, not just on HR issues. Ask them about how you market, how you sell, in addition to how you promote and how you hire. It’s really quite ingenious—you can hire a marketing company to put together a focus group for you, or you can do it yourself.”

Ford, which supports 10 employee resource groups, has been a pioneer in this area. The Professional Women’s Network has weighed in on seat height. The Ford Parenting Network was asked to review minivan designs. Ford Employees Dealing with Disabilities review designs for accessibility issues. The advertising and product development departments regularly invite the employee resource groups to share their thoughts on advertising campaigns or new designs. “Understanding our customers’ buying desires and tendencies is critical to our success,” says Trawick.

Other companies report similar interaction: Eli Lilly’s corporate communications department recently asked members of various affinity groups for their opinions on a series of external marketing pieces. And at HP, employees with disabilities have done accessibility testing on a number of new products.

Efforts such as those make employees feel valued and demonstrate that diversity awareness is an integral part of the business.

Ford has also tapped its employee resource groups as an ad hoc sales force by encouraging members to promote the company’s recent Friends and Neighbors discount program. According to Trawick, employee resource group referrals have brought in $290 million in sales since the program’s inception in 2003.

Affinity groups can also bridge gaps between affiliates and potential customers around the globe. According to Howard, TI’s Japanese Diversity Initiative has helped with translation services for clients, and the Chinese and Korean employee resource groups have worked together to help identify a list of suppliers in Asia.

All three Asian groups also worked together to create a culture-based training program for TI employees who interact with Asian partners. At Eli Lilly, members of the Chinese affinity group welcome colleagues from Lilly’s Chinese affiliate whenever they come to Indianapolis. “They don’t stay in a hotel; they stay with a member of the affinity group,” McMillan says.

Big value For Small Companies

While affinity groups have traditionally been the domain of larger companies, experts say they can be an effective strategy for small to medium-sized businesses as well. “Affinity groups are something anyone can do,” says Velásquez. “A smaller company can move the needle faster, get more done.”

One reason affinity groups work well for smaller companies is that they require little financial backing. While most companies provide budgetary support for affinity groups, the needs are usually minimal.

And for companies focused on growth, the creation of affinity groups can be a strategic move to bring talent on board and expand sales reach. “Medium-sized firms that want to be big clearly follow the big firms,” says Velásquez.

Smaller companies are sometimes reluctant to sanction affinity groups, fearing that they will turn into lobbying organizations with a litany of complaints. But experts say that can be avoided if the organization takes control of the process.

“Affinity groups fail when organizations don’t give them any structure,” says Velásquez. He recommends creating a formal application process, including the identification of a mission, goals and leadership structure. “Insist that they provide solutions, not just identify problems,” he says. “Tell us how to fix it within reasonable budgetary constraints.”

Velásquez sees a particular interest from small and medium-sized companies that deal with a diverse customer base. “If you’re in hospitality, retail, any industry that is business-to-consumer, you know the consumers are getting more diverse,” he says. “Companies are saying, ‘Let’s tap into this.’ ”

Appreciating the Prospects

Experts say the mutually beneficial role of affinity groups is timeless. “Our ultimate goal is to have the broadest set of perspectives available,” says McMillan. Affinity groups play a part in achieving that goal by helping to attract, retain and support a diverse workforce and by providing channels for communicating their perspectives on company policies and products.

Successful companies learn to recognize the potential of affinity groups and to harness the potential to drive business results. “There are companies that really shy away from them and don’t think they are a good idea,” says McMillan. “Our experience has shown that they really do have value.”

Jennifer Taylor Arnold is a freelance writer in Baltimore.

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