Providing LGBTQ+ inclusive benefits reaps rewards

Supporting the gender and sexual diversity of the workforce makes good business sense. LGBTQ+ identification in the US continues to grow, with 7.6% of US adults now identifying as lesbian, gay, bisexual, transgender, queer or some other sexual orientation besides heterosexual. According to Gallup, this figure is up from 5.6% four years ago and 3.5% in 2012. This growth is due in large part to the fact that Gen Z, those born between 1997 and 2012, are six times more likely than their Gen X counterparts to identify as LGBTQ+. With Gen Z set to become 30% of the workforce by the year 2030, employers must significantly increase focus on LGBTQ+ inclusion.

Benchmark data collected by Human Rights Campaign Foundation (HRCF) on LGBTQ+ inclusive benefits, policies and practices demonstrates that being an LGBTQ+ friendly workplace positively impacts a company’s recruitment, retention, engagement and revenue.

The United States Chamber of Commerce reported that the presence of LGBTQ+ supportive policies is associated with increased productivity, increased profitability and higher firm valuation. Likewise failing to provide HR support for transgender, nonbinary and LGBTQ+ employees can come with real bottom-line consequences.

Benefits of inclusive benefits

Employers can support their LGBTQ+ employees through robust benefits packages. Benefits are an essential part of any organization’s overall compensation package. They help attract and retain the best talent, boost productivity, and improve employee satisfaction. Inclusive benefits show employees that you are not only invested in them now, but you are invested in their future.

Employees look for fair and equitable treatment in the workplace, regardless of their gender identity or sexual orientation. Inclusive benefits support all workers in their personal and professional lives, unlike traditional benefits which typically exclude certain groups of people. 70% of LGBTQ+ employees are more inclined to stay with their current employer because of its approach to inclusion. A competitive and inclusive benefit package is crucial to attracting and retaining top talent.

In 2023, the U.S. Bureau of Labor Statistics found that benefits account for nearly 30% of an employee’s total compensation. By amending their benefits structures, employers ensure that they extend this valuable bundle of benefits to their workforce equitably, irrespective of sexual orientation and gender identity.

Insuring a healthy future

Typically, when people think about benefits, they think about health insurance; in the United States, employer-provided health insurance is the single largest source of healthcare coverage. LGBTQ+ adults face barriers in accessing health care despite having similar rates of health insurance as heterosexual or cisgender adults. Further, the National Institute of Health found that LGBTQ+ individuals suffer disproportionately from mental, behavioral, and physical health problems. Restricted access to needed health services is a critical barrier to healthcare equality.

Employers should provide healthcare plans with inclusive coverage, including gender-affirming surgery, affirmative mental health care, transgender health care, inclusive fertility and family-building benefits, and social support in the workplace. The HCRF found that employers have an overall increase of less than 3.5% in total benefits costs when they extend healthcare benefits to partners (in lieu of legal spouses) and remove broad exclusions to provide transgender-inclusive healthcare benefits. The costs for providing these services often cost less than providing increased care for other conditions, such as depression and anxiety.

Inclusive health benefits

Inclusive benefits as a journey, not a destination

Employers that currently provide inclusive benefits should regularly review and update those benefits to ensure they are constantly improving workplace inclusivity. Employers can continue to extend their inclusive benefits by providing partner benefits in all areas, like leaves and retirement benefits.

Providing LGBTQ+ inclusive benefits to employees and their families are low-cost and yields high returns for businesses. Companies that take this approach will be best positioned to not only enhance a sense of psychological safety and belonging among their current LGBTQ+ workforce, but also to attract top talent from this community. Moreover, inclusivity promotes a better organizational culture and employee wellbeing.

Supporting Pride Month is one thing, but ensuring your workplace is inclusive year-round should be a top priority for your business.