Activating ERGs as Catalysts for Change

Dow combines global breadth; asset integration and scale; focused innovation and materials science expertise; leading business positions; and environmental, social and governance (ESG) leadership to achieve profitable growth and deliver a sustainable future.  Our ambition is to be the most innovative, customer centric, inclusive and sustainable materials science company in the world.

Our commitment to inclusion, diversity and equity (ID&E) has allowed us to navigate through challenging times with increased employee engagement and enhanced innovation. This is, in part, driven by the activation of Employee Resource Groups (ERGs).  Dow’s history with ERGs dates back 30 years. However, over the past five years, we have demonstrated the power of ERGs to drive greater employee satisfaction, engagement, productivity, and business value.

This case study represents one of the submissions for i4cp's 2023 Next Practice Awards, winners will be honored at the i4cp 2023 Next Practices Now Conference. You can also view other Next Practice Award case studies.

Business challenge

In 2017, only 15% of Dow employees globally were engaged in ERGs. At the same time, our annual employee engagement survey suggested that employees who participated in at least one ERG experienced higher overall satisfaction by seven percentage points when compared to non-ERG participants. While we believed in the external business case for ERGs, it was our own internal data that galvanized new focus and actions. We knew that if the differentiation in satisfaction was more than just correlation, getting more employees to participate in ERGs would be mutually beneficial for them and Dow. However, increasing participation would present significant challenges:

• Dow’s global workforce is spread across more than 60 countries, with different cultural norms and perspectives on ID&E.
• More than 60% of our employees work in manufacturing plants and labs, and by the nature of their roles experience barriers to ERG participation.
• Dow’s ERGs have historically been aligned to traditional dimensions of diversity, making it difficult for all employees to understand the value case and feel a sense of connection and belonging to them.

Over the last five years, we have addressed the above challenges and accelerated our progress.

Solution – Scope & Innovation

We have successfully activated ERGs through a robust strategy, intentional focus and deliberate actions in seven key areas:

1. We clearly defined the value proposition for ERGs in our organization. At Dow, the “R” really does stand for resource – ERGs are a resource for employees and for the Company. For our employees, they are a conduit for networking and connection, career development, community engagement, and alignment to purpose and business priorities. For Dow, ERGs are a voice for employees, inform key company decisions and provide a platform to address evolving employee interests and business needs. ERGs must be welcoming of allies, foster cross-collaboration, and promote programs in alignment with Dow’s core values.
   
   In 2018, we recognized the need to address key opportunities in the areas of new employee integration and cultivating a culture of support and appreciation for mature workers. As a result, we strategically launched two new ERGs – RISE for early career employees and PRIME for employees age 50+. These new ERGs helped to meet specific needs, and at the same time, allowed the Company to engage different parts of the workforce. RISE is Dow’s fastest growing ERG with ~10,000 participants.
    
2. We institutionalized robust I&D governance to ensure that ERGs have a seat at the decision-making table. We established a tiered structure with three distinct ID&E councils that play unique, but interconnected roles. The President’s Inclusion Council sets the strategic tone and direction from the top. This council includes business, function, and regional executives, many of whom are ERG executive sponsors. The Senior Leaders’ Inclusion Council influences change through senior leaders who are all ERG participants. And the Joint Inclusion Council convenes Dow’s global ERG leaders to leverage best practices, solicit feedback, and activate Team Dow.
    
3. As a science and technology company, we believe that “what gets measured gets done and what gets rewarded gets repeated”, and ERGs are no exception. In 2018, we elevated our focus on ERG measurement and accountability with the launch of a new Digital ERG Tool. The tool provides general information about each ERG, houses a global calendar of events, and gives employees the opportunity to sign on/off as ERG participants. It is an accurate and auditable system of record. In 2020, we embedded ERG participation into the annual performance award bonus for Dow’s 3,000 people leaders alongside diversity representation metrics. We also developed an ERG dashboard that provides deeper insights and allows us to identify gaps and take action.
    
4. As our ERGs have evolved, ensuring strategic alignment to our Company’s priorities is critical. In 2022, for the first time we launched our ERG Agenda and challenged ERGs to collaborate with each other and key stakeholders to amplify impact in key focus areas: wellbeing, war for talent, Dow’s strategy to Decarbonize and Grow, supplier diversity, and driving ERG engagement for all. The ERGs rose to the challenge and supported the launch of Dow’s new wellbeing portal, directly engaged in the recruitment and retention of diverse talent, developed a new sustainability literacy series, served as mentors for diverse suppliers, proactively engaged our manufacturing colleagues and more.
    
5. Our ERGs are catalysts for change, and we have focused on engagement and activation of employees to mobilize them through ERGs. We have done this in many ways, but one of the most visible is our EMERGE All-ERG Conference. EMERGE is a business meeting where employees are required to self-nominate and go through an objective selection process. The all-expenses paid conference welcomes 500+ employees from 30+ different countries, representing all job types. Participants learn more about the strategic direction of the company, are inspired by internal and external speakers, galvanized by powerful personal stories from colleagues, and give back to the community through volunteerism. The EMERGE experience has been a key source of inspiration for the global expansion of our ERGs.  
   
   Another way we have improved engagement is through the launch of a Global Volunteer and ERG Participation Policy that allows for 12 hours of paid time off for employees to volunteer and participate in ERG activities. This removes barriers for employees who want to participate but are unable to because of the nature of their jobs.
    
6. Our ERGs provide a platform for advocacy and action on issues that are important to them and relevant for the Company. For example, our Women’s Inclusion Network played a significant role in the new and enhanced Global Parental Leave Policy that resulted in expansion of leave to 16 weeks for birthing, non-birthing, and adoptive parents, regardless of gender. Military Degree Equivalency, championed by the Veteran’s Network acknowledges the unique skills and experiences of veterans, and recognizes relevant military experience as equivalent to a bachelor’s degree for U.S. and Canadian job postings. The Global African Affinity Network (GAAN) advocated for Dow’s support of the C.R.O.W.N. Act, which prohibits hair-based discrimination in the workplace, and in the wake of the murder of George Floyd, GAAN was a key architect in the launch of Dow ACTs – our systemic plan to address racial injustice.
    
7. We have leveraged ERGs as a source for innovation and business success. This can be a challenge for a business-to-business (B2B) company like Dow. But our ERGs have delivered. For example, Dow’s Home & Personal Care team partnered with GAAN to identify the unmet haircare needs of African heritage consumers in the textured hair care market. Their feedback is helping the business advance its testing capabilities and develop new formulation offerings. Dow’s GLAD ERG for LGBTQ+ employees and their allies helped forge the partnership that led to the release of the Under Armour HOVR Pride Collection which uses Dow’s technology in the shoe’s midsole.  This collection not only provides visible LGBTQ+ support during Pride Month, but all proceeds go to Athlete Ally, a non-profit created to eliminate LGBTQ+ discrimination in sports.

Results & Impact

Through intentional focus on our ERGs and deliberate actions, we have made meaningful progress and delivered visible results. Today, we have 10 ERGs and have expanded our footprint to 600 chapters worldwide. Global ERG participation has nearly quadrupled from 15% to 57%, which represents more than 22,000 employees. We achieved this by addressing key opportunity areas:

• Participation of people leaders increased by more than 3X from 31% to 98%.
• New hire participation quadrupled from 11% to 46%.
• Engagement of our manufacturing operations colleagues increased significantly from 10% to 48%.

In alignment with our original hypothesis, we have seen that as ERG participation increased, the difference in overall satisfaction has improved from 7 to 13 percentage points. Our progress has also been validated through external recognition such as: DiversityInc Top Companies for ERGs, Out and Equal ERG of the Year, SHPE Hispanic ERG of the Year, and SASE ERG Leadership Achievement Award.

In the words of our Chairman and CEO Jim Fitterling, “ERGs are more than a group of like-minded employees, they are champions for change both inside and outside of Dow”. We are proud of the progress we have made at Dow over the last five years. Going forward, we will continue to harness the power of ERGs and we are committed to finding new and creative ways to drive meaningful connection, engagement, and impact.