Tips to help finance leaders better understand the true cost of LGBTQ discrimination in the workplace.

The evolution of today's global workforce, coupled with ongoing legislation tied to LGBTQ discrimination in the workplace, has introduced a host of new challenges for both employees and business leaders alike.

While notable progress toward LGBTQ equality has been made over the past decade, a 2017 research study from the Center for American Progress shows members of the LGBT community "continue to experience pervasive discrimination" in the workplace. Between 11 and 28 percent of LGBT workers reported "losing a promotion simply because of their sexual orientation," per the Center for American Progress, and 27 percent of transgender workers reported "being fired, not hired or denied a promotion in the past year," according to the National Center for Transgender Equality.

Understanding the True Cost

Most leaders acknowledge the critical role HR plays in making sure the right policies are in place to prevent discrimination against employees on the basis of sexual orientation or gender identity. Given the significant financial implications of failing to protect or directly violating the rights of LGBTQ workers, it's also something finance leaders are prioritizing.

"Organizations could face varied financial consequences should a lawsuit arise from hiring or firing someone based on sexual orientation," explains Mollie Mantia, director of compliance for ADP's talent group. "We have recently seen Equal Employment Opportunity Commission (EEOC) court cases settle with payouts of more than $200,000 for this type of discrimination."

In addition to the obvious potential for costly lawsuits, it can also cost you in terms of talent. Establishing a workplace that celebrates diversity and values inclusion can significantly enhance an employer's recruiting appeal — especially among members of the LGBTQ community, who still face widespread discrimination at work.

Mantia says, "With an engaged, diverse, and inclusive workforce, you are fostering an environment where employees are productive, feel valued and feel free to express ideas that may be the next big change to move your company forward."

It's important for HR to partner closely with executives at every level to determine the right investments and develop the necessary policies and procedures to protect both the rights of employees and the organization's bottom line. As you consider your approach, here are three tips to help you better understand the true cost of LGBTQ discrimination in the workplace.

1. Stay on Top of Evolving Legislation

Appeals courts are split over whether the Title VII of the Civil Rights Act of 1964 prohibits LGBTQ discrimination under its workplace protections. The latest details on legislation tied to LGBTQ rights were featured in a recent Talent Economy article. At least two appellate courts agree with the EEOC's position that Title VII protects against discrimination on the basis of sexual orientation and gender identity. California and New York are noted as current "leaders in the evolving legislation," but many other states are still pending. It's likely that this uncertainty will continue until the issue is addressed by the Supreme Court or Congress passes clarifying legislation. As long as the law remains in flux, it's important to stay on top of the latest local legislation to ensure compliance.

2. Minimize Your Exposure to Liability

We must also face the unfortunate reality that some organizations will be sued despite their best efforts to prevent LGBTQ discrimination in the workplace. Your role as a leader is to make sure you've done your part to minimize the organization's exposure to liability. Here are a few tactics to keep in mind:

  • Review relevant policies and make any necessary updates multiple times a year to make sure you stay compliant. (We have the evolving legislation described above to thank for this one!)
  • Ensure there is always a written record of prior discipline when terminating an employee, and formally document the specific reason(s) for the termination as soon as the decision is made.
  • Implement policies and procedures that minimize the potential for unconscious bias to inform hiring and promotion decisions — e.g., adopt "blind" processes for reviewing applications and resumes (remove information such as name, address, graduation date, alma mater, etc.) and use standardized interview questions for all candidates.
  • Keep hard copies of corporate policies, HR forms and signed acknowledgements of their receipt by employees.
  • Communicate any policy revisions to all employees — use multiple channels (email, hard copy postings, intranet updates, staff meetings, etc.) to try and ensure you reach all worker populations.

3. Invest in Training and Supporting Resources

So, tip No. 1 keeps you up-to-date on changes in local legislation, and tip No. 2 makes sure you have all the appropriate "paperwork" in order. But how do you go about bringing these things to life? It's all about defining the specific behaviors you want to cultivate among managers and employees to foster an inclusive workplace that supports LGBTQ employees. Offer manager-specific training on preventing sexual harassment in the workplace, including how it relates to sexual orientation, gender identity and expression. Employees will look to their managers to translate what corporate policy means for them, so make sure to provide that information through training or other supporting resources.

Preparing leaders for success in their role as communicators is one of the best ways to create an inclusive environment that truly respects, embraces and leverages the skillsets and experiences of a diverse workforce.

To learn more about Pride Month:

The Benefits of LGBTQ Inclusion and Diversity Training

Foster an Inclusive Workplace for Transgender Talent by Creating a Preferred Name Policy

Transgender Equality in the Workplace: What Employers Need to Know

Tags: Discrimination Risk and Compliance Diversity Equity and Inclusion

Diversity and Inclusion: Supporting Employee Experience and Retention

You put a lot of work into assembling the most important assets of your organization—your employees. Now, help ensure you’re meeting their needs with a diverse, dynamic culture.

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