Embracing LGBTQ+ Talent: Tackling Turnover and Pay Disparities in Today's Workplaces

It is true that when incorporating equity and inclusion, progress often comes sporadically rather than steadily. The advancement of LGBTQ+ rights is a prime example of this phenomenon.

Between 2000 and 2020, significant strides were made in the fight for LGBTQ+ equality. Throughout these two decades, the efforts of gay, lesbian, queer, trans, and other individuals resulted in substantial victories, such as improved workplace conditions, legal recognition of marriage, parental rights, and the ability to serve openly in the military. Despite these achievements, LGBTQ+ individuals continue to encounter unique challenges in workplaces. Navigating the corporate environment is a tough journey for LGBTQ+ individuals, shaped by a combination of personal, professional, and societal factors.

But here’s the catch. As Gen Z enters the workforce in larger numbers, employers must also consider the needs of young LGBTQ+ employees within this generation.

The Rise of LGBTQ+ Gen Z Talent: Shifting Demographics in the Workforce

Gen Z adults are leading the charge in LGBTQ identification, with approximately 20% self-identifying, in stark contrast to the 3% of Gen X adults who do the same. So, what does this demographic shift mean? These projections suggest that within the next decade, the workforce will witness a surge of around 10 million young LGBTQ employees. However, despite this demographic shift, younger LGBTQ workers express dissatisfaction with their employers' approach to inclusion compared to their older counterparts.

Dissatisfaction Among Younger LGBTQ+ Employees

A recent report from professional services firm EY reveals that Gen Z LGBTQ employees are less satisfied with various aspects of their workplace environment.  

• Gen Z employees rate their employers lower in inclusion categories such as mentorship, educating colleagues on LGBTQ allyship, and providing psychological safety compared to older LGBTQ workers.
• The lower satisfaction among younger LGBTQ workers raises concerns about attrition rates, with only 38% of those giving low ratings on inclusion categories expecting to stay with their employers for another year, contrasting with 97% of those giving high ratings who plan to stay.
• A significant portion of millennials (36%) and Gen Z (40%) who left their jobs attribute their departure to their former employer's lack of LGBTQ inclusivity.
• Mitch Berlin, vice chair of strategy and transactions at EY’s Americas practice, emphasizes the importance for organizations to ensure a safe environment for building careers, highlighting both altruistic and business reasons for prioritizing LGBTQ inclusion.
• EY's findings reflect a broader trend where companies face challenges balancing addressing hostility towards diversity, equity, and inclusion (DEI) programs while meeting rising expectations from young workers for commitment to diversity and inclusion.  

Addressing the Persistent Pay Gap

Let’s address the elephant in the room– the pay gap. Part of the reason why LGBTQ+ individuals are unsatisfied with the work culture and employers are on the verge of losing talent is this persistent issue of the pay gap. A survey by Glassdoor reveals that—

Why is this? Part of the reason that LGBTQ+ workers face a large unadjusted pay gap is that they are disproportionately represented in lower-paying sectors like Restaurants & Food Service, Nonprofit & NGO, etc.: LGBTQ+ workers are 23% of Restaurant & Food Service and Nonprofit & NGO sector workers who report sexual orientation in Glassdoor salary reports, versus 11% of workers in the Finance and Information Technology sectors.  

However, LGBTQ+ pay gaps persist even after looking within sectors. The smallest pay gaps are in the Nonprofit & NGO (-5%), Education (-6%), and Aerospace & Defense (-7%) sectors; the largest pay gaps are in Telecommunications (-19%), Retail & Wholesale (-17%), and Pharmaceutical & Biotechnology (-16%) sectors.

Strategies for LGBTQ+ Workplace Inclusion

Neglecting the preferences and requirements of LGBTQ+ employees is unsustainable. There are numerous instances where companies faced backlash or boycotts due to their handling of LGBTQ-related issues. EY suggests strong strategies for enhancing LGBTQ workplace inclusion, such as  

• implementing employee resource groups,  
• aligning health and wellness benefits with community needs, and  
• refining harassment reporting policies.  

However, employers must recognize that neglecting the preferences and requirements of this demographic is unsustainable.

Final Thoughts

One can't neglect that each person's experience is influenced by cultural backgrounds, societal norms, and the prevailing climate within their organization. Central to LGBTQ+ inclusion is the importance of visibility and representation within the organizational framework. Seeing themselves represented within their workplace fosters a sense of belonging and affirmation for LGBTQ+ individuals. Yet, many organizations still fall short in achieving diverse representation across all levels.   

In fostering inclusivity, employers can support employee-driven groups, cultivate a culture of respect and empathy, and promote genuine allyship consistently throughout the year, according to a recent report by Randstad. Additionally, experts previously advised HR to conduct internal pay equity audits, which can significantly contribute to the advancement of diversity and inclusion objectives.