Why Companies Must Recommit to the Fight for LGBTQ+ Rights

When it comes to equity and inclusion, progress is rarely cumulative. LGBTQ+ rights are a case in point.

There were dramatic gains in the 20-year period between 2000 and 2020. Whether you’re talking about the reduction of discrimination and harassment in the workplace or in private life, over these decades, gay, queer, and trans individuals fought for and won a large number of important rights — equal treatment at work, legal marriage, the freedom to raise children, and the ability to openly serve in the military are just a few examples. The apex of this progressive trend was the Supreme Court decision Bostock v. Clayton County in 2020, which expanded the Civil Rights Act of 1964 to include protection from discrimination based on sexual orientation and gender identity.

But here’s the heart-wrenching news: Now, many of these new-won rights and freedoms are at risk.

On the global front, a number of countries (mostly in the Middle East and Africa) continue to criminalize sodomy and brutally repress LGBTQ+ individuals. What’s more, in January 2024, BRIC (an international bloc of nations comprising Brazil, Russia, India and China, which focuses on economic growth and trade policy) enlarged its membership to include five countries that are fiercely hostile to LGBTQ+ rights: Iran, Saudi Arabia, Egypt, Ethiopia, and the United Arab Emirates (UAE). The sixth addition to the bloc, Argentina, under its new President Javier Milei, is moving in the same repressive direction. Despite being long seen as a leader in this space (Argentina was the first Latin American nation to introduce nonbinary ID cards), it is now a nation in retreat. When asked about same-sex marriage Milei’s new minister of foreign affairs and worship Diana Mondino responded, “If you prefer not to bathe and be covered in lice, and it’s your choice, fine, but then don’t complain if someone doesn’t like that you have lice.” This quote gives a sense of the tone at the top in today’s Argentina.

On the domestic front, the new speaker of the House, Mike Johnson is radically anti-gay and focused on encouraging the hard right of the Republican Party to shoot down gay rights legislation in Congress. At the State level, 29 states still do not have laws prohibiting job discrimination based on sexual orientation, and in 33 states the long-discredited and harmful practice of conversion therapy is still legal.

Recent legislative action is just as threatening. A record number of anti-LGBTQ+ bills were introduced in State capitols across the U.S. in 2023 — a total of 510, three times the number of such bills introduced in 2022. Eighty-four bills were signed into law, 16% of the total bills filed across the country. “It’s not just the total number that has gotten worse, but the extremity of the bills,” adds Gillian Branstetter, communications strategist for the ACLU in an April 2023 interview with CNN. Out Leadership’s LGBTQ Business Climate Index has been measuring state-level inclusiveness across 22 data points and ranking each state on its score annually since 2018. In 2023, for the first time ever, the national average of LGBTQ+ inclusiveness at the state level declined by 1.16%.

Finally, in recent months the hard right has deliberately conflated lesbian, gay, and bisexual rights, which have enjoyed mainstream support, with trans issues, which are much more controversial. Partly due to right wing misinformation campaigns, the issue of whether gender affirming care should be available to minors has become an extremely fraught issue in many communities in the U.S. despite the American Pediatric Associations’ support for this care, and the weaponization of this issue is diluting mainstream support for the entire raft of LGBTQ+ rights.

Where to Turn?

With governments and international blocs in retreat, where can LGBTQ+ employees turn to for support? The not-so-obvious answer is global companies. Looking back on what has driven dramatic gains in the life prospects of LGBTQ+ people over the last 20 years, legislative action and culture shifts have been important, but center stage have been multinational corporations.

Spurred by fiercely committed scholars and advocates who have driven home the message that being “out” is good for the bottom line, over the last few decades business leaders have rolled out a suite of high-impact policies and practices which have gone a long way to level the playing field for their LGBTQ+ employees. These include providing harassment and discrimination training to managers; treating LGBTQ+ issues as confidential; offering specially tailored health care coverage to LGBTQ+ employees; creating ally programs; and starting Employee Resource Groups for LGBTQ+ employees.

Equally important, global companies have used their economic clout to press for legislative change. In fact, when promoting LGBTQ+ rights — specifically marriage equality — corporate leaders used their voices in new ways: they spoke up en masse to support what was considered a “social issue,” even signing their names to multiple amicus briefs to the Supreme Court. One thing to note is whether through amicus briefs, collective action, or CEO-driven policy initiatives, the largest single engine behind this progress has been the global business community.

The big question now is whether corporate efforts on behalf of LGBTQ+ employees will meet the moment or falter. After all, last summer’s SCOTUS decision banning affirmative action poured fuel on anti-woke forces in American culture, and over the last few months, right-wing groups have mobilized to punish companies who engage with a long list of DEI initiatives including those that support LGBTQ+ employees. Is this just noise?

We think that it is. Our belief is that going forward, most private sector leaders will stay strongly committed to LGBTQ+ rights and freedoms because they are good for the bottom line.

The Business Case

First, we’ve known for years that when LGBTQ+ employees feel comfortable being “out” at work, engagement and retention rates are much higher. The data is telling. In a 2023 survey from Out Leadership, 97% of LGBTQ+ employees who rated their organization highly on measures of inclusion expected to remain with their employer for the next year. Conversely, just 38% of workers who rated their organization at the low end of the spectrum for LGBTQ+ inclusion anticipated remaining at their company over the next year — a 59 percentage point difference. The cost of this enhanced attrition rate for companies is staggering. When employees don’t need to lie at work and can claim all aspects of their identity, they are much more likely to be fully engaged and “go the extra mile” for their company. They are also much more likely to stick around.

Second, Gen Z is our future workforce and a significant proportion of Zoomers (25%) identify as LGBTQ+. This group is actively seeking to work for companies that are gay friendly. Indeed, 92% of LGBTQ Zoomers give serious attention to a company’s reputation around LGBTQ rights when deciding whether or not to take a job. Across age groups the gay-friendliness of companies is an important factor in attracting talent: 36% of LGBTQ workers have considered crossing state lines to work for a more gay-friendly employer, and 31% have considered taking a pay cut to do so. All of which puts a great deal of pressure on companies to stick to, or even expand, their LGBTQ+ inclusion policies.

Third, workplace equity and inclusion policies benefit all employees. For example, LGBTQ+ parental leave policies expands access to benefits for a large group of employees who have nontraditional families. This umbrella effect greatly broadens impact and strengthens internal and external buy-in.

The reality is that an usually robust business case is determining CEO attitudes and actions rather than political pressure. The Conference Board CHRO Confidence Index recently reported that no HR leaders are planning on scaling back investments in DEI in 2024; and a Littler Study found that 99% of CEOs were either expanding or maintaining their diversity commitments, with only 1% indicating a scale back.

One shift that is happening among CEOs of global companies is, in the current climate, there’s a greater awareness of the need to differentiate between how they deal with lifting up and supporting LGBTQ+ employees in different countries and regions. One size certainly does not fit all. Those who head up multinational corporations are reacquainting themselves with research published by the Center for Talent Innovation (now called Coqual) and launched at Davos some five years ago. This study recommends that companies employing a traffic light filter — red zones, amber zones, and green zones — and lays out in considerable detail how corporations can be supportive of lesbian, gay, bisexual, and transgender rights in jurisdictions that are hostile to LGBTQ+ rights, as well as those that uphold rights to equality. Given what is happening in the enlarged BRIC bloc, this framework is increasingly useful.

As business leaders consider how best to engage with the LGBTQ+ community in increasingly divided countries and cultures, they’re well advised to their powerful activism on behalf of gay, lesbian, trans, and queer people has always been based on the clear cut wins for the bottom line. Today, the business fundamentals remain the same. Rainbow capitalism translates into an enhanced ability to recruit and retain top talent and access to a wider marketplace. For business leaders this is a much better deal than the arbitrary inefficiencies of discrimination. So going forward the script for companies going must be: Protect your hard-won competitive edge and recommit to the fight for LGBTQ+ rights. The battle isn’t over.

Copyright 2024 Harvard Business School Publishing Corporation. Distributed by The New York Times Syndicate.

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