LGBT Inclusiveness and Firm Performance

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People who are lesbian, gay, bisexual, or transgender, or LGBT for short, continue to face workplace prejudice and discrimination. For example, in most US states, failing to hire or promote someone because of their sexual orientation or gender identity is legally permissible. 

And, large-scale studiescontinue to show that LGBT employees face both subtle and overt forms of bias on a regular basis. 

Despite its prevalence, there is a growing research base showing that such mistreatment harms workplace performance. Instead, diverse and inclusive organizations regularly outperform their peers. 

Some of the more recent evidence of this relationship comes from Shaun Pichler, of Cal-State Fullerton, and his colleagues. In their study, the researchers collected data from thousands of firms from 1996 to 2009. 

They found that LGBT-inclusive policies positively contributed to a number of desired outcomes, like firm value, productivity, and profitability. 

These patterns were most pronounced in firms where creativity was at a premium, such as those focusing on research and development. This finding is consistent with the notion that creative people are attracted to regions and workplaces where diversity and inclusion are the norm.

Finally, the authors found that the benefits of LGBT inclusiveness on firm performance remained even after taking into account state-level employment protections. Thus, whether you are in a state like Texas, which does not offer protections, or one like California, which does, LGBT inclusiveness is related to improved performance. 

The study shows that prejudice, stereotypes, and discrimination don’t pay. They serve to deter creative people from joining the workplace and ultimately hurt performance. Thus, organizational leaders would do well to create welcoming, inclusive spaces where all employees can thrive.