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How LGBTQ+ Diversity Builds Better Companies

Nathalia Sandoval

June 30, 2022

In my first interview with Courier, when my now-boss was telling me about the company, he stopped and said, “I see your display name is not the same as the name on your application. Are there any other pronouns that I should be using?” It was a small gesture, but it made an impact on me. The moment hinted at a company culture built around treating people with respect and appreciating authenticity. Courier is still a very small company building the foundation of a diverse team, but even as we grow, I’m confident that this will remain a priority for us in the future.

Encouraging employees to be their true selves in big and little ways is important because it’s the right thing to do—it also happens to be the best way to recruit a diverse team of employees. And increasing diversity improves many facets of an organization: Productivity, profits, employee retention, and even the ability to navigate conflict.

In honor of Pride month, let’s talk about the power of diversity and how tech companies should improve inclusion in their organizations.

Diverse Teams Make More Money

It doesn’t matter whether you’re talking about racial diversity, gender diversity, or other forms of diversity—people with different experiences often come up with different ideas from each other. Those unique insights drive innovation and better decision making, which, in turn, increases profits.

When looking at your demographics, it’s important to consider power and hierarchies. If most of your diversity is at the entry-level while management and leadership remain primarily white, cis, able-bodied, and male, you aren’t going to see the same results as companies with diversity at every level. Organizations with above-average diversity in management see 19% higher innovation revenue than companies with below-average diversity in management. The same study found that teams with above-average diversity in management also had EBIT (Earnings Before Interest and Taxes) margins that were 9% higher than organizations with below-average diversity in management.

Studies that zero in on the results of increased diversity when it comes to specific demographics see interesting results too. A study that compared two genders (men and women) found that companies where 30% or more of their executives were women, outperform their peers. Unfortunately, the study didn’t acknowledge or account for other genders. Available research indicates these results apply to LGBTQ+ diversity as well. A study of the LGBTQ+ inclusivity at 657 publicly-traded U.S. companies found strong evidence that “more LGBT-friendly firms have higher profitability and higher stock market valuations.” Diversity makes sound commercial sense.

Differences Improve Collaboration and Innovation

Diversity also affects how teams collaborate and innovate in complex ways. Overall, the more diverse a team is, the more creative and innovative they’ll be. Mixed-gender teams can better manage group conflict compared to homogenous teams and can better maximize creativity among team members.

But some situations can thwart the benefits diversity brings. For instance, stress makes people in groups start leaning back into homogenous thinking. In turn, this can discourage employees who belong to marginalized groups from speaking up. Because these insights are no longer being shared, the benefits of diversity are lost, while employees feel detached and alienated.

It’s also important to remember that employees who experience oppression are more likely to burn out. Glassdoor reviewed 209,112 workplace reviews and found that LGBTQ+ employees are 51% more likely to report burnout than their coworkers. A 2021 McKinsey report shared that LGBTQ+ women, disabled women, and Black women experienced more microaggressions than their peers and noted that, “Women who regularly experience microaggressions are…almost three times as likely to say that in the past few months they have struggled to concentrate at work as a result of stress.”

In other words, if you want to experience the benefits of diversity, you must create a place where people can genuinely let their guard down and be themselves. That means increasing diversity in your team so employees don’t feel tokenized. This also means making your workplace a safe place to be a marginalized person. How do you do that? By making it an unsafe place for discrimination and harassment. For instance, leadership and management need to step in and say something when they see a microaggression happening. They need to make it an uncomfortable place to foster exclusion and hate.

Harvard Business Review and Glassdoor partnered up for a series of studies on diversity in the workplace and published an article on their findings in 2021. The author recommends “encouraging diverse cultural ideas while fostering agreement among employees about the importance of a common set of organizational norms and beliefs.”

Inclusivity is a Major Factor in Employee Retention

Organizations looking to reduce employee turnover should consider that the level of inclusion employees feel at work greatly influences their career decisions. Whether or not your employees decide to take another job could come down to how comfortable they feel at work.

A survey of 1,789 full-time U.S. employees and 2,000 live participant experiments found “high belonging was linked to a whopping 56% increase in job performance, a 50% drop in turnover risk, and a 75% reduction in sick days. For a 10,000-person company, this would result in annual savings of more than $52M.”

A 2020 Catalyst survey of 2,100 employees at large corporations found that 35% of an employee’s emotional engagement in their job and 20% of an employee’s decision to stay or leave their current organization is determined by inclusivity.

That’s not surprising, given that feeling included at work is likely to make people happier, and happier employees are more likely to stay. What’s more interesting is that the retention benefits go beyond the demographics most affected. Workplaces with more gender diversity may see lower turnover in women and men. (Unfortunately, the research on inclusion didn’t include nonbinary employees.)

4 Tips for Increasing Employee Diversity

To get these benefits, organizations need to clarify where they stand on diversity at every stage of the hiring process. Candidates who are most likely to improve the diversity of your organization will also be looking most carefully at how you talk about and approach diversity.

1. Assume many of your LGBTQ+ employees aren’t out at work

The Williams Institute at the UCLA School of Law surveyed 935 adults who identified as “LGBT” in May 2021. They reported that 50% of LGBT employees aren’t out to their supervisor, and 25% aren’t out to anyone at work. That’s likely because 45% of LGBT employees have already experienced unfair treatment at work at some point in their lives. Keep in mind that many employees will be reluctant to be themselves due to past experiences.

It’s your job to make your organization's culture so welcoming and authentic that employees feel comfortable enough to be themselves. Have leadership and management start putting pronouns in their bios. Don’t invest in anti-LGBTQ+ companies or donate money to anti-LGBTQ+ politicians. Bring in diversity and inclusion educators from the communities they teach about. Never stop actively working to improve your organization’s diversity and inclusion.

2. Understand no marginalized communities are a monolith

Oppression and inclusivity are not simple things. Especially at work. A Catalyst report on inclusivity put it well: “Employees' work lives are often affected by their experiences as people with intersectional identities such as gender, race, ethnicity, religion, age, LGBTQ+ identity, etc. More granular views of employee experiences of inclusion are needed to truly make an impact.” The report advises organizations to avoid tokenizing employees and build inclusivity into the company culture so it goes beyond policies. Review your diversity and inclusion strategy and tactics. How is intersectionality addressed in the way you approach diversity and inclusion? If you don’t know the answer, bring in a dedicated diversity and inclusion educator to help you learn more and build intersectionality into your approach.

3. Don’t justify why diversity is vital to your organization

Organizations that trip over themselves to explain they’re inclusive because it’s good for business risk alienating potential employees. Research shows employees are more likely to view an organization favorably if they make it clear to potential employees that honoring diversity is at the core of the business and avoid any urge to explain why. For example, instead of saying. “We value diversity because it benefits us as well as our employees,” you could say something like, “Honoring and respecting employee diversity is and will continue to be a core value here.”

4. Take action

To impact future and current employees, you need to do more than learn and communicate; you’ll also need to take action. Think in big and small ways, such as ensuring health insurance covers gender-affirming care and encouraging employees to add pronouns to bios and email signatures. Ultimately each decision adds up to a culture that either helps employees thrive or holds them (and you) back.

You should prioritize diversity for your organization because it’s the right thing to do. If you can build an inclusive environment where employees like me can be their real selves, every part of the business will benefit, too. All this is not to say that Courier has mastered building a diverse LGBTQ+ team (or will be able to do so in the near future), but we’re definitely taking a whack at it and I feel confident that we’ll get pretty close. To be a part of this mission, come join the team!

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