Organizational Governance

It’s Official:
LGBT-Positive Policies Do Enhance Corporate Performance. Here’s How and Why

LGBT employees still lack proper legal protection in more than half of all US states. But according to recent research, there is no doubt that LGBT-inclusive companies attract better talent and decrease employee turnover.

By Tom Idle | Published 5 years ago | About a 4 minute read

Image: WOCinTech/Flickr

Lesbian, gay, bisexual and transgender (LGBT) employees still lack proper legal protection in more than half of all US states. In a world without laws that do not explicitly prohibit employment discrimination based on sexual orientation and gender identity, being ‘out’ as an LGBT person can be grounds for dismissal. It’s no wonder so many Americans don’t feel safe bringing their whole selves to work.

Regardless, the last decade has seen strong progress from the corporate world, with more and more companies building effective ways to foster and encourage inclusivity and diversity in the workplace. Corporate policies have been rewritten to provide more protection for LGBT staff. Training programmes have been created to empower people to be good allies, and raise awareness of conscious and unconscious bias when it comes to things such as recruitment. More companies are creating space for inclusivity in the form of networking 'events' — whether on the intranet or on Instagram, for example — bringing together LGBT employees from different parts of the world to share concerns, explore ideas and build a community. Some have even revised procurement sheets to make sure suppliers adopt their own LGBT-inclusive policies, too.

Here in the UK, companies including GlaxoSmithKline, BP, HSBC, Pinsent Masons and Vodafone have rightly been recognised for their progressive attitudes; while, in the US, Human Rights Campaign gave over 550 companies — including 3M, Adobe, BASF, Caesars Entertainment, Campbell Soup Co, Estée Lauder Companies, Humana, Iron Mountain, Nielsen, Procter & Gamble, Target Corp and Visa — perfect scores for the inclusive policies, backed up by creative and effective approaches. Companies such as global law firm Simmons & Simmons have been singled out for making sure that LGBT employees do not suffer if they decline an overseas opportunity because of fears about their sexual orientation, for example.

It is a growing group of companies that continues to anticipate legislators. While workplace protection for LGBT staff remains absent in US federal law, 91 percent of Fortune 500 companies now have non-discrimination policies based on sexual orientation. And 67 percent of them have extended health insurance benefits to all LGBT families.

The danger with presenting any set of case studies on an issue such as LGBT inclusivity is that they are seen as being a special group of firms that have decided to take a stand because it is the ‘right thing to do.’ However, an ever-evolving set of statistics suggests that companies acting consciously on such an important issue are reaping the commercial benefits, too.

According to the US Chamber of Commerce Foundation, there is no doubt that LGBT-inclusive companies attract better talent and decrease employee turnover through internal and external policies.

“We have long understood that inclusive policies can improve a company’s bottom line, but it has been difficult to measure how they impact corporate culture and overall employee satisfaction,” says the Foundation’s president, Carolyn Cawley. But through surveys, interviews and focus groups with 70 businesses from across the US, the organisation has shown how critical indicators of success, such as employee recruitment and retention, are positively impacted by an inclusive corporate culture.

Meanwhile, a new study from Deloitte — drawing on the CSR ratings of more than 1,300 publicly traded firms — supports this assumption. It found that organisations which engaged in research and development (R&D) activities — and adopted LGBT-supportive policies, performed better overall: “For organisations engaging in R&D activities, those which had LGBT-supportive policies experienced 21.1 percent higher average firm value, 3.4 percent higher average employee productivity and 12.5 percent higher average profitability compared to those without LGBT-supportive policies,” it says, indicating that the benefits of LGBT-supportive policies are more pronounced in organisations with R&D activities.

“When CSR practices are tied to the ways in which organisations compete, these practices can be a source of competitive advantage,” says Chuah Jim Leon Yeow from Deloitte. “For organisations that want to be seen as an employer of choice for technical expertise, LGBT-supportive policies may widen the pool of prospective employees from which companies may hire.”

The Work Institute estimates that one in four US employees will leave their jobs this year, costing US businesses around $600 billion. Around 77 percent of that turnover could be prevented by employers, claims the organisation. Against this backdrop, LGBT-inclusive workplace policies and programs are increasingly important — not only in furthering social justice, but in driving performance and commercial returns, too.

Tom Idle

Content creator extraordinaire.

Tom is founder of storytelling strategy firm Narrative Matters — which helps organizations develop content that truly engages audiences around issues of global social, environmental and economic importance. He also provides strategic editorial insight and support to help organisations – from large corporates, to NGOs – build content strategies that focus on editorial that is accessible, shareable, intelligent and conversation-driving.

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