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Employers are at risk of losing out on their LGBTQ Gen Z talent—But these 5 initiatives can help them stay

LGBTQ workers have always been part of the workforce, but the cohort is particularly prevalent among America’s youngest employees. Around 20% of Gen Z adults identify as LGBTQ, compared to just 3% of Gen X. And as more members of Gen Z join the workforce, that number is likely to grow.

But a report on LGBTQ workers across generations shows that younger members of the group are less than thrilled with how their employers handle inclusion, according to a new survey of more than 500 LGBTQ employees conducted by professional services firm EY. And those apprehensions are making them want to quit.

Compared to older LGBTQ workers, Gen Z gave their employers lower scores on inclusion categories like providing mentorship, educating colleagues on LGBTQ allyship, and providing a sense of psychological safety. And that bodes ill for attrition rates among the group. Around 38% of participants who gave their company a lower rating on those kinds of inclusion categories expected to stay with their employers for another year, compared to 97% of respondents who rated their organization highly and plan to stay with their jobs. And out of LGBTQ employees who left their jobs, 36% of millennials and 40% of Gen Zers said it was because their former employer was not welcoming to LGBTQ workers.

“For me, that was a particular wake-up call around making sure that we as organizations are doing what we need to do to make sure that people feel like they’re building a career in a safe environment,” Mitch Berlin, vice chair of strategy and transactions at EY’s Americas practice and an LGBTQ advocate, tells Fortune. “Even if you weren’t doing it for altruistic reasons, you should be doing it for business reasons.”

EY’s findings come as businesses try to walk a line between addressing increasing hostility toward corporate DEI programs and rising expectations from young workers that their employers commit to diversity and inclusion. Companies that take the wrong steps with their DEI programs could hurt the workers they’re trying to retain. 

And last year several companies, including Target and Bud Light owner AB InVev, backtracked on pride-related marketing campaigns following mass anti-LGBTQ boycotts and protests. Workers at these companies reported either experiencing harassment themselves or feeling alienated by their employer’s response. 

“I do think that taking your foot off the gas on some of these DEI programs [and] initiatives, de-emphasizing DEI overall, is probably going to have a detrimental effect on your ability to employ a lot of these Gen Zers, given how strongly they feel about social issues,” says Berlin. “If we’re not meeting them where they want to be met, they’re not going to accept the interview offer or stick around very long.”

The report estimates that if the average Fortune 500 company with around 62,000 workers reduced its attrition rate of LGBTQ employees by just 5%, it could save around $4.2 million annually. 

EY’s report recommends five initiatives that employers should consider implementing to improve LGBTQ inclusion among their ranks:

  • Creating LGBTQ business resource groups (BRGs) so workers have spaces to connect with colleagues, and access sponsorship and mentorship opportunities with senior LGBTQ leaders. This also gives workers the chance to support business initiatives including giving input on the company’s products and services, recruiting, and improving company culture.

  • Creating allyship through programs that teach non-LGBTQ employees how to support their LGBTQ colleagues, such as allyship training or having LGBTQ workers share their experiences.

  • Introducing LGBTQ-friendly benefits and wellness resources, such as benefits for employees’ domestic partners or transgender-inclusive health care plans.

  • Improving harassment reporting and accountability practices so LGBTQ workers have an anonymous and easily accessible channel for reporting mistreatment. They should also have guaranteed protections from retaliation, and companies should have established protocols for addressing claims.

  • Developing an LGBTQ-inclusive recruitment strategy, such as including statements in job postings about being an inclusive employer or establishing diverse interview panels.


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