diff --git a/lib/srv/usermgmt.go b/lib/srv/usermgmt.go
index 3effd8248b830..c560e64ade78b 100644
--- a/lib/srv/usermgmt.go
+++ b/lib/srv/usermgmt.go
@@ -274,7 +274,7 @@ func (u *HostUserManagement) doWithUserLock(f func(types.SemaphoreLease) error)
 
 func (u *HostUserManagement) createGroupIfNotExist(group string) error {
 	_, err := u.backend.LookupGroup(group)
-	if err != nil && err != user.UnknownGroupError(group) {
+	if err != nil && !isUnknownGroupError(err, group) {
 		return trace.Wrap(err)
 	}
 	err = u.backend.CreateGroup(group)
@@ -287,10 +287,13 @@ func (u *HostUserManagement) createGroupIfNotExist(group string) error {
 // isUnknownGroupError returns whether the error from LookupGroup is an unknown group error.
 //
 // LookupGroup is supposed to return an UnknownGroupError, but due to an existing issue
-// may instead return a generic "no such file or directory" error when sssd is installed.
+// may instead return a generic "no such file or directory" error when sssd is installed
+// or "no such process" as Go std library just forwards errors returned by getgrpnam_r.
 // See github issue - https://github.com/golang/go/issues/40334
 func isUnknownGroupError(err error, groupName string) bool {
-	return errors.Is(err, user.UnknownGroupError(groupName)) || strings.HasSuffix(err.Error(), syscall.ENOENT.Error())
+	return errors.Is(err, user.UnknownGroupError(groupName)) ||
+		strings.HasSuffix(err.Error(), syscall.ENOENT.Error()) ||
+		strings.HasSuffix(err.Error(), syscall.ESRCH.Error())
 }
 
 // DeleteAllUsers deletes all host users in the teleport service group.