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U.S. Economy Could Save $9B Annually By Creating Inclusive Environment For LGBT Employees

This article is more than 9 years old.

The US economy could save $9 billion annually if organizations were more effective at implementing diversity and inclusion policies for their lesbian, gay, bisexual and trans (LGBT) staff, according to data released by Out Now, a LGBT research and marketing consultancy.

The data is taken from the world’s largest LGBT research project LGBT2020, and for the first time it measures the savings in dollar terms for companies who encourage an inclusive working environment where LGBT employees are comfortable to be themselves at work.

The research ‘LGBT Diversity: Show Me The Business Case’ reveals that in multiple countries around the world, LGBT staff who are able to be openly LGBT with all their work colleagues are significantly more likely to remain in their current employment than staff who are ‘not out to anyone’ at work. It also found that investment in the effective implementation of diversity and inclusion policies reaped significant cost savings for companies due to improved staff retention.

The research estimated that organizations of 10,000 employees in the US were able to save between $127,000 to $944,000 and larger companies with 250,000 employees could save between $3.2 million to $23.6 million. Total national US savings were measured at $8.93 billion.

In the UK, the research estimated that UK companies with 250,000 employees could save between $1.7 million to $12.4 million with total national savings for the UK measured at $1.02 billion. The analysis for savings relied on two third-party sources for the US and UK. The Center for American Progress undertook detailed analysis on the expected costs to replace workers at all skill levels and the research used their 16.1% estimate for its tables in setting the lower level replacement cost for lost LGBT staff. On the upper end, the report adopted the national average figure arrived at in the UK by Oxford Economics in 2014. For national average savings figures, the report applied a midpoint estimate between these two outlying figures. Measurements and valuations in the report were limited to full-time employees only.

“This report for the first time enables companies to see exactly why investing in a more equitable and supportive workplace for everyone is a sound business investment that demonstrates solid returns,” said Ian Johnson, chief executive of Out Now. “As well as boosting staff retention which delivers significant savings for business, providing a workplace environment where LGBT people are supported to be themselves also has a significant and powerful effect on motivating LGBT individuals by making them feel part of a team and boosting productivity.”

The research also revealed how comfortable LGBT employees feel about ‘coming out’ at work among the ten profiled countries worldwide. India is the country that achieved the lowest score on the number of respondents who felt able to come out to all at work (8%) and Australia scored highest (51%). The report also found that workers in some countries, especially India (9%) and Brazil (20%) face substantial obstacles coming out to all at work and respondents in Italy are also more likely to not be out to anyone as LGBT at work (32%).

The LGBT2020 study also asked respondents about the level of homophobia they faced in the workplace. It makes grim reading: the country with the greatest amount of observed homophobia at work is Brazil (68%), closely followed by India (61%). The least amount of homophobia at work was observed in Germany with a quarter of respondents reporting they had seen or heard homophobic behavior at work.

The LGBT2020 study also highlighted concerns that bisexuals, trans and gay employees have about the impact of coming out at work on their promotion prospects. Data from the US revealed that 55% of trans respondents think that if they come out as trans at work this might have an effect on prospects for future promotions. This compares to 40% for bisexuals, 30% for gay men and 24% for lesbian respondents. Bisexuals are often the least-discussed letter of the LGBT acronym. The study found that many bisexuals report they are poorly perceived by heterosexual people who think they are actually gay but have not come to terms with that fact. Bisexuals were also concerned they face rejections by homosexual people for being too opportunistic, the study found. It appears that organizations still have work to do to foster and encourage a workplace where employees feel comfortable being out regardless of their sexual orientation.