Why LGBTQ+ Inclusion is Good for Business

Workplace inclusion for LGBTQ+ employees, while far from perfect, has improved significantly over recent decades as the US in general has become a more accepting place for this historically stigmatized minority.

Anti-discrimination legislation in the 1960s followed by the origins of Diversity, Equity, and Inclusion (DEI) practices by US corporations in the 1980s and 1990s formed the basis of greater workplace inclusion (Kelly and Dobbin, 1998).

According to the Human Rights Campaign (HRC), Fortune 500 companies today overwhelmingly practice diversity management, with 91% prohibiting discrimination based on sexual orientation and 83% on the basis of gender identity.

It’s unequivocally the right thing for businesses to promote, and for HR teams to advocate for and sometimes defend and enforce, but as with any initiative in an organization, the allocation of resources (time, money, personnel, etc.) needs to be justified in terms of the bottom line.

If you find yourself in a position advocating to create, bolster, or save your organization's DEI initiatives, here are some key talking points on why LGBTQ+ inclusion is good for business:

Recruitment and Retention:

o  LGBTQ+ talent is more likely to work for a company that practices diversity management and more likely to stay longer at that company (Pichler et al, 2017).

Productivity:

o LGBTQ+ employees in diverse organizations have a greater sense of perceived organizational support and this creates a desire for reciprocity or to return good treatment in kind (Day and Greene, 2008).

o  LGBTQ+ employees at diverse organizations are more likely to be out and tend to have higher rates of job satisfaction (Badgett et al, 2013), which leads to better relationships with co-workers and supervisors and greater productivity (Pichler et al, 2017).

Competitive Advantage:

o   A company accepting of LGBTQ+ employees may also gain competitive advantage by creating an organizational culture and a workforce that’s difficult for competitors to imitate (Pichler et al, 2017).

Innovation and Creativity:

o  These organizations benefit from a variety of life experiences and perspectives (Mallory et al, 2011) that leads to higher innovation and creativity among employees, while presenting an employer brand that is open to new ideas (Day and Greene, 2008).

Brand Image:

o More diverse organizations may have a better brand image among the LGBTQ+ community. LGBTQ+ people and their allies may prefer to purchase from diverse organizations in much the same way they prefer to work such businesses (Wang and Schwarz, 2010).

o It is worth noting that market research indicates that LGBTQ+ spending power globally is around $4.7trn.

Cost Effectiveness:

o In addition to the above organizational factors underpinning the business case for diversity, research disputes the suggestion that these initiatives are expensive or not worth it. Diversity management is generally a low-cost aspect of the HR function, and actual costs are offset by improvements to the bottom line (Mallory et al, 2011).

Stock Prices:

o Research indicates that stock prices were positively associated with diversity policies and that companies with progressive practices had higher stocks than similar companies without these initiatives.

o The researchers suggest that investors may view companies who practice diversity management more positively, and within the organization itself there may be enhanced ability to recruit and retain talent, increase employee productivity, and potentially open access to new markets (Wang and Schwartz, 2010).

If all of the above ROI on inclusion isn’t enough of an incentive for your organization, a reminder that while discrimination against LGBTQ+ employees is illegal under Title VII of the Civil Rights Act, it still exists.

According to the HRC, 46% of LGBTQ+ workers say they are closeted at work; 1-in-5 LGBTQ+ workers report having been told or had coworkers imply that they should dress in a more feminine or masculine manner; and 53% of LGBTQ+ workers report hearing jokes about lesbian or gay people at least once in a while.

In my own dissertation research exploring LGBTQ+ workplace experiences for my master’s degree in HR management, I spoke to many queer people who must expend a lot of energy on managing their identity at work, e.g. figuring out who’s a ‘safe’ person to talk to, how they allow their voice to be, and what others may think if they have a ‘gay’ haircut.

This is both heartbreaking and a waste of productivity, and in an age where top talent is difficult to find and keep, organizations will find and maintain a competitive advantage if the internal culture is inclusive of LGBTQ+ employees.