LGBTQ+ Inclusion in the Workplace: 5 Tips for SMBs

Quick look: June marks Pride Month, a time when many employers celebrate and reaffirm their commitment to supporting LGBTQ+ team members. LGBTQ+ employees bring valuable perspectives that positively impact workplace culture and performance, and small businesses can show their appreciation by embedding inclusion into their culture, policies, employee benefits, and communications.

Pride Month is an opportunity to recognize and support the rights, equality, and dignity of all individuals, regardless of their sexual orientation or gender identity. But while Pride Month is celebrated in June, employers can cultivate LGBTQ+ workplace inclusion all year.

Despite significant progress, a staggering number of LGBTQ+ workers still face employment bias, but luckily, small and medium-sized business (SMB) leaders have the power to ignite change. Read on to explore what the work experience is like for some LGBTQ+ employees, how to celebrate Pride Month authentically, and ways to make your company more welcoming and empowering year-round.

What’s the workplace like for LGBTQ+ employees?

While societal acceptance of LGBTQ+ individuals has grown significantly over the past two decades, some challenges still remain, particularly in the workplace.

A recent Human Rights Campaign (HRC) report found that:

• 40% of LGTBQ+ employees have withheld their identity at work due to fear of being stigmatized or potential harm
• 35% have overheard colleagues making jokes and/or negative comments about LGBTQ+ people
• 54% of transgender and non-binary workers have reported feeling unhappy or depressed at work

Further, data from the Williams Institute at UCLA School of Law reveals LGTBQ+ staff who are out to at least a few coworkers or their supervisor are three times as likely to experience discrimination and twice as likely to be harassed.

A challenging ladder to climb

While career ambition is universal, the path to advancement can be more difficult for some. In the U.S., nearly 10% of adults identify as LGBTQ+, and they are just as likely as their non-LGBTQ+ peers to aspire to leadership roles.

However, according to McKinsey, their representation in the corporate world remains disproportionately low. For example, LGBTQ+ women comprise 2.3% of entry-level employees, but only 1.6% of managers, and even smaller percentages of more senior positions.

McKinsey also found that transgender people are much more likely to be in entry-level positions than cisgender people of the same age, are less likely to have management, evaluation, or hiring responsibilities, and are more likely to perceive their gender identity or sexual orientation as a barrier to advancement.

A welcoming workplace benefits everyone

Creating an empowering workplace for LGBTQ+ employees makes a major impact and the numbers prove it.

The U.S. Chamber of Commerce’s report, Better Business: The Benefits of LGBTQ+ Workplace Inclusion, found that:

• LGBTQ+-inclusive organizations report 3% higher productivity levels than less-inclusive ones
• Companies with LGBTQ+-inclusive practices show improved profitability and market valuation
• 70% of LGBTQ+ staff are more likely to stay with their current employer due to its approach to LGBTQ+ inclusion
• 72% of LGBTQ+ allies have a greater tendency to accept a position with an organization that supports LGBTQ+ workers

5 ways to support LGBTQ+ inclusion in the workplace

Intentional, thoughtful action is necessary to develop a culture that enables employees to bring their whole, authentic selves to work each day. SMB leaders can leverage the following strategies, or alternatively, may work with a professional employer organization (PEO) to help bring them to life.

1. Establish a comprehensive nondiscrimination policy

As employers develop a nondiscrimination policy, they should pay careful attention to applicable human resource (HR) laws and include sexual orientation and gender identity as protected statuses. The policy should explicitly state how employees are expected to treat each other and outline a system enabling them to file complaints anonymously. If/when complaints are filed, HR leaders should promptly investigate and see that appropriate actions are taken.

Employers can reference the LGBT inclusion toolkit from the Society for Human Resource Management (SHRM) or work with their PEO partner to develop a comprehensive policy.

Disclaimer: This is not an exhaustive list of employment laws. Please refer to your regional and industry-specific legal guidelines or consult your legal counsel for detailed and specific information.

2. Review and update communications

Next, examine your business’s internal and external communications and review them for inclusivity. This can help employers avoid unintentionally using terms that may be exclusive. Some questions to consider include:

• Do you use general-neutral language and options beyond binary terms in your public and internal communications?
• Are employees encouraged to include their preferred pronouns in their email signatures and collaboration programs, if they choose?
• Are your policies (like your dress code) free of gender stereotypes?
• Is diverse representation reflected on your website, social media accounts, and in internal and external marketing collateral?

3. Educate your staff

Education is key to nurturing LGBTQ+ inclusion in the workplace. While most employees aim to treat their colleagues respectfully, some may benefit from learning the most effective ways to do so.

Employers can teach their staff by providing access to a learning and development portal with training on topics like workplace diversity, unconscious bias, harassment prevention, and more. Witnessing the actions of others can make a significant impact, and team leaders should set a positive example by using respectful and inclusive words and actions.

4. Offer the right benefits

Today’s workforce is diverse, and not just any benefits package will entice talent to join and stay with your company. Many LGBTQ+ employees, in particular, face challenges that employers can address by offering the right benefits.

For example, almost half of LGTBQ+ adults report financial challenges, compared to just 25% of the general population. Employers can bridge this gap by providing financial planning resources and 401(k) retirement plans with a company match, if possible.

Another impactful benefit to consider offering is family-forming support. Many LGBTQ+ couples and individuals face challenges on the path to parenthood. A supportive family-building benefit can include:

• Access to benefits experts, fertility clinicians, emotional counselors, and lawyers, as well as a dedicated care manager
• Discounted rates at select fertility clinics and adoption and surrogacy agencies
• Personalized care plans
• Prescription ordering and at-home delivery
• Support and educational resources for every stage of growing a family

Unfortunately, mental health issues tend to impact the LGBTQ+ community disproportionately. The American Psychiatric Association reports that LGBTQ individuals are 2.5 times more likely to experience depression, anxiety, and substance misuse. To support their LGBTQ+ workforce, employers can consider providing access to an employee assistance program (EAP), telehealth care, and a private in-office wellness room.

5. Celebrate and champion the LGBTQ+ community

Your LGBTQ+ workforce is full of talent and aspiration and should be celebrated, appreciated, and promoted at the same rate as other employees.

Visibility and representation matter, and workers who see similar colleagues in senior-level roles can more clearly visualize their career progression. To achieve this, SMB leaders can establish a mentorship program that allows LGBTQ+ staff to pair with sponsors who can help them grow.

Employers can also celebrate LGBTQ+ culture and historical contributions each June. Consider sharing relevant literature, hosting interactive and educational events, and highlighting LGBTQ+ contributions to your workplace and industry.

Encourage inclusiveness with a PEO

Developing a culture that welcomes, empowers, and supports LGBTQ+ employees is a marathon, not a sprint. It entails continually being open to growth and keeping a pulse on diversity, equity, and inclusion (DEI).

A PEO, a type of HR outsourcing provider, like ExtensisHR can offer the tools, resources, and expertise to make a lasting impact through:

• Policy and compliance: HR experts to guide you through developing nondiscrimination policies, employee handbooks, and more.
• Employee benefits: Access to Fortune 500-level benefits packages, including 401(k) retirement plans, mental health benefits, financial wellness programs, and family-building support.
• Mentorship programs: A PEO can help you establish a successful mentorship program for your workforce, whether it is in the office, virtual, or hybrid.
• Learning and development: Some PEO solutions include access to a training portal with various relevant training modules, and assistance with developing a learning and development strategy.
• DEI data: ExtensisHR’s DEI Dashboard provides actionable data on pay equity, salary trends, employee turnover, promotions, and previous hires.

Creating an inclusive workplace isn’t just a focus during Pride Month, it’s a year-round mission. By implementing thoughtful policies and celebrating diversity, employers can empower LGBTQ+ staff and drive collective success.

Making your workplace more inclusive for LGBTQ+ employees is a journey. Let’s take it together. Learn more about ExtensisHR’s PEO solution, or contact us today to start a conversation.