In a post-diversity policy landscape shaped by recent federal executive orders, some of America’s largest companies are quietly backing away from one of their most visible inclusion tools: employee resource groups (ERGs).
The decision is often portrayed as a compliance move—a response to evolving legal language about identity-based programming. But behind the scenes, the move away from ERGs may be creating more problems than it solves.
A Strategic Asset, Now Under Review
ERGs have existed for decades. Their modern structure was largely shaped by Ted Childs, former vice president of global workforce diversity at IBM. Widely known as the “godfather of ERGs,” Childs helped develop a framework that served as a model for companies across sectors: informal employee networks tied to shared identity or interest, designed not to advocate or negotiate, but to support professional development, cultural understanding, and internal communications.
At IBM, we didn’t build ERGs as activism—we built them as infrastructure, Childs told audiences repeatedly. They helped managers listen.
By the 2000s, most Fortune 500 firms had adopted some version of the ERG model.
These groups became standard fare in corporate diversity, equity, and inclusion (DEI) portfolios: employee-led, leadership-approved, and often aligned with recruitment and retention strategies.
A Shift Driven by Legal Uncertainty
But recent changes —most notably executive actions addressing race-conscious programs—have led to a growing sense of uncertainty among general counsel offices. ERGs, particularly those organized around race, gender, or orientation, are now seen by some firms as legal liabilities.
The result?
Downsizing, budget cuts, or outright dissolutions of ERGs across industries—from tech and finance to manufacturing and aerospace.
What companies risk losing, however, is not just goodwill, but institutional intelligence. ERGs often served as internal early-warning systems, peer support platforms, and community-facing ambassador programs.
“Eliminating ERGs may lower perceived risk on paper,” says one legal expert/DEI consultant, “but it increases risk in practice. These groups were preventing lawsuits, not causing them.”
Backlash and the Return of Informal Gatekeeping
There’s another consequence: the vacuum being created is increasingly filled by informal, exclusionary power networks.
As ERGs disappear, “old boy” networks are regaining relevance—golf outings, private dinners, and executive club events where critical decisions and relationship-building happen out of public view.
The problem? These venues are rarely accessible to women, people of color, or younger professionals without legacy connections. And without the alternative pathways that ERGs offered, internal advancement risks becoming less transparent and more relationship-based.
“Companies are unintentionally signaling that inclusion is negotiable,” says a human resources analyst and author. “That’s a dangerous message to send to your talent pool.”
Impact on Leadership Pipelines
The loss of ERGs is already being felt in succession planning. Many of these groups served as soft pipelines for leadership, highlighting rising stars, offering access to senior leaders, and providing informal coaching that often didn’t exist elsewhere.
With these programs cut, mentoring is more sporadic. Visibility drops. And diverse talent may not get the same level of exposure to the decision-makers who shape their career trajectory.
Internal culture suffers, too. Without forums to raise concerns or test ideas, HR departments become overloaded, and trust between employees and management erodes.
The External Pivot: Conferences Now Doing the Work
In the absence of internal support, external networks are gaining ground. Events like the Waves of Change (WOC) STEM Conference and BEYA (Becoming Everything You Are) STEM Conference are emerging as critical alternatives.
“These aren’t just conferences anymore,” says one event organizer and industry leader. “They’re strategic hubs for professional visibility and advancement.”
What they offer:
- Access to C-suite leaders across industries
- Networking opportunities with peers and sponsors
- Exposure to leadership roles, awards, and corporate recruitment
- Platforms to build what executive coaches call ‘professional convoys’—the groups of mentors, allies, and advocates who support long-term growth
For professionals who no longer find those opportunities inside their companies, these events are now indispensable.
What Smart Companies Are Doing Instead
Some companies are opting for rebranding over removal. They’re relabeling ERGs as Business Resource Groups, anchoring them to business units and embedding compliance oversight.
Others are creating inclusive participation models—open to all employees—and separating cultural engagement from human resources functions.
The most forward-looking firms are aligning their ERGs with innovation strategy, product development, and community relations, turning what was once considered soft culture into a measurable business advantage.
A Legacy Being Rewritten
Ted Childs once said: If you want a diverse workforce, you need systems that help them thrive.
Dismantling ERGs doesn’t just remove a support structure—it undoes decades of learned experience. Whether done out of caution or political pressure, the decision carries long-term costs for culture, talent, and innovation.
For now, the ERG is being reevaluated, restructured, or erased. But if history is any guide, companies that walk away from inclusion infrastructure may soon find themselves scrambling to rebuild it.
Click BEYA (Becoming Everything You Are) Is for Everyone: Why Inclusive Excellence in STEM Must Be Celebrated to read more.
STEM City USA Media