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Helping Your Clients Become LGBTQ-Friendly Employers

Businesspeople shaking hands in front of a Pride flag.

Quick look: Pride Month takes place every June, but there are many reasons your clients should continually strive to make their workplaces more supportive of LGBTQ+ employees. While the LGBTQ+ community comprises nearly 10% of the U.S. population, they face disproportionate hardships at work. Here are five key benefits brokers can consider offering to their clients to help them become LGBTQ-friendly employers.

With 20 million people, or 8% of the U.S. population, identifying as LGBTQ+, the time is now for clients to become an LGBTQ-friendly employer.  And while Pride Month may be ending, brokers can enable their clients to become more inclusive all year long by expanding the reach of accessible, affordable, and equitable benefits. Let’s explore what work is like for LGBTQ+ workers, and five employee benefits brokers can help clients offer to become a more inclusive workplace.

The LGBTQ+ workplace experience

Before we dive into which benefits clients should offer to best cater to their LGBTQ+ workforce, we would be remiss to not discuss what work is like for this population.

In 2021, the Williams Institute at UCLA discovered that approximately 10% of LGBTQ+ people in the U.S. experienced workplace discrimination during the previous year, and about half faced bias at some point on the job. This bias includes situations like being harassed, terminated, passed over for a job, denied a promotion or raise, excluded from events, or denied additional hours.

The Human Rights Campaign also found that:

  • 46% of LGBTQ+ employees are closeted at work
  • Over half of LGBTQ+ employees hear jokes about lesbian, gay, or queer people at least occasionally
  • Nearly one-third of LGBTQ+ workers have felt unhappy or depressed at work
  • 25% of LGBTQ+ employees feel distracted from their tasks when working in an unwelcome environment
  • The top reason these employees don’t report negative comments is because they fear no action will be taken, and they don’t want to damage their professional relationships

Unfortunately, many LGBTQ+ employees have a more difficult time climbing the corporate ladder. Despite these workers desiring to become top executives just as much as their cisgender colleagues, McKinsey reports their actual representation in senior-level positions is much lower. For example, LGBTQ+ women comprise 2.3% of entry-level employees, but only 1.6% of managers and even smaller percentages of higher-ranking positions.

Similarly, McKinsey found that transgender workers are 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 believe their gender or sexual orientation is hindering their advancement.

5 LGBTQ-friendly benefits clients can provide

The days when cut-and-dry benefits packages were sufficient have passed. The modern workforce is increasingly diverse, and LGBTQ+ workers face challenges that clients can help alleviate by offering the right benefits.

Expanding benefits packages provides clients with advantages, too. A recent U.S. Chamber of Commerce report found that out of businesses that implemented inclusive practices, 76% experienced greater employee engagement, 53% reported higher employee retention, 71% improved their reputation, and 59% grew their job applicant pool. What’s more, 72% of employees state they would leave an organization for one they thought was more inclusive.

With that being said, let’s discuss five benefits that brokers can help their clients provide which can boost LGBTQ+ inclusivity.

1. Financial wellness benefits

A recent survey of 1,000 LGBTQ U.S. adults by the Nationwide Retirement Institute found that approximately two-thirds of them live paycheck-to-paycheck. Many of these people also feel less prepared for retirement, investing, and estate planning than their straight counterparts. Clients can help narrow this divide by offering a 401(K) retirement plan with a company match, if possible, and financial wellness training sessions on topics like investing, retirement planning, saving for college, and more.

2. Fair compensation

The inequity that LGBTQ+ employees face affects their paychecks, as well. The Human Rights Campaign analyzed data from a 2022 Bureau of Labor Statistics report and found that LGBTQ+ workers make just 90% of what the typical worker earns. Furthermore, approximately one in five LGBTQ+ U.S. adults lives in poverty, compared to just 16% of their cisgender and straight peers.

Clients can directly improve this disparity by conducting salary benchmarking, a process that compares internal pay and benefits with competitor offerings to ensure employees are receiving fair and equitable compensation. This project can be offloaded to the experts at a professional employer organization (PEO), who analyze market intelligence and statistical data to help clients determine salaries, reduce unequal salary disparities, and balance their budgets.

3. Family-forming support

Clients can make a big difference in their LGBTQ+ employees’ personal lives by offering family-building support. Many LGBTQ individuals and couples encounter difficulties having children, and the process can be expensive and stressful. A supportive family-forming benefit can relieve some of the burden by providing:

  • 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

4. Mental wellness benefits

Unfortunately, studies show that mental health issues affect the LGBTQ+ community more than the heterosexual population. According to the American Psychiatric Association, LGBTQ+ individuals are:

  • More than twice as likely to have a mental health disorder in their lifetime
  • 5 times more likely to experience depression, anxiety, and substance misuse
  • Found to use mental health services more than their heterosexual counterparts

All of these facts make it critical for clients to offer a variety of mental wellness benefits to their employees. By partnering with a PEO, brokers can enable clients to provide their staff with access to an employee assistance program (EAP), meditation and mindfulness apps, telehealth care, and more.

5. Inclusive paid leave policies

Sometimes existing policies have inequalities that clients are unaware of, and they should revisit their handbook to ensure all policies are inclusive of their LGBTQ+ workers. Some policies to consider adding or updating are:

  • Parental leave that does not exclude non-birth parents, and does not discriminate based on sex, sexual orientation, gender identity, or marital status
  • Caregiver leave that allows paid time off to care for domestic partners as well as the children of a domestic partner, regardless of biological or adoptive status
  • Bereavement time off that includes the death of a domestic partner and the partner’s immediate family

Professional guidance to create a positive change

Opportunity abounds for clients to better support their LGBTQ+ employees both professionally and personally. A PEO, like ExtensisHR, can equip brokers with the knowledge and resources needed to help clients become LGBTQ-friendly employers. Working with a PEO means you can make inclusive health benefits more accessible, affordable, and equitable for those who need them the most.

PEOs provide a variety of Fortune 500-level benefits to attract and retain LGBTQ+ talent, like 401(K) retirement plans, mental wellness benefits, and family-forming support. They also have dedicated human resources and compliance experts available to assist clients with non-discrimination and paid leave policies. And finally, ExtensisHR’s DEI Dashboard can provide insight into potential pay disparities by providing actionable data on pay equity, salary trends, promotions, and more.

Are your clients looking to become LGBTQ-friendly employers? Contact ExtensisHR today to discover how we can support you.

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