Closet-Cultures Mean Costly Flight Risk for Employers

By Melissa J. Anderson (New York City)

Last week the Center for Work Life Policy released a long-awaited report entitled “The Power of Out,” a report that details the cost of the closet. Based on the results of a CWLP survey, out of the estimated seven million LGBT employees in the US workforce, 48% are closeted. And according to the report by Sylvia Ann Hewlett and Karen Sumberg, that closet costs companies big time.

Sumberg said, “What surprised me most about the research is that so many people are still in the closet at work, and really the effect of someone’s engagement at work is profound.”

The report says, “Among those LGBTs who feel isolated at work, closeted employees are nearly three-quarters (73%) more likely to say they plan to leave their companies within three years.” Not just that, write Hewlett and Sumberg, but when employees are out, they are more productive and build stronger relationships with co-workers and clients.

Based on the CWLP’s numbers, that means almost two and a half million LGBT employees in the US are looking for a new job, simply because their company’s culture prevents them from being themselves at work.

Attrition is expensive. If simply doing what is right (providing a workplace that’s open to people of all stripes) isn’t good enough to encourage employers to build inclusive workplaces, doesn’t the cost of potential attrition show it’s time for companies to address the issue of the closet culture?

Role Models

How can companies build more open workplaces? First of all, Sumberg said, role models are key. “One of the things that would be tremendously helpful is having more senior people who are out.”

She explained, “It makes a tremendous impact to see someone like yourself at the top – just as seeing women at the top helps more women get to the top, looking up and seeing a role model makes environments more inclusive.”

And out role models would be particularly valuable for women, she indicated. “Lesbians, anecdotally, are just not out and about in the corporate community.” And this can be particularly costly for companies. For example, lesbians who are closeted are more than twice as likely to distrust their employers than lesbians who are out.

Additionally, when employees face an unwelcoming culture internally, they begin to go elsewhere. According to the report, “Perhaps owing to a lack of access to informal social networks inside the organization, closeted lesbians are far more likely to be actively building external networks (55%) than their out peers (37%).”

Sumberg pointed out, “One of the key things would be to not assume that gay men and lesbians have the same needs and challenges.” Companies that are not making an effort to build inclusive cultures for LGBT employees, and in particularly female LGBTs, face a significant loss in expertise, productivity, and client relationships, as those employees seek work elsewhere.

Communicating Policies

According to the report, the corporate world is far ahead of the US government regarding policies toward LGBTs. Hewlett and Sumberg write:

“While an individual can still be legally fired in 29 states for being gay, and same-gender couples have no federal right to marry, 97 of the Fortune 100 companies offer sexual orientation protections, and 57 percent of Fortune 500 companies offer domestic partner benefits.”

Surprising then, that while corporations are ahead of the game on paper, so many LGBT workers are still in the closet. Sumberg points out that one way companies can encourage cultures to catch up to their policies is to improve communication.

She said, “One of the key things they can do is communicate those policies more broadly. In many cases, what is offered has not gotten through to LGBT employees.”

Beyond Networks

Finally, Sumberg said, making workplace cultures attractive for LGBT employees means more than creating networking opportunities. She said, “Building an inclusive environment is incredibly necessary. And it doesn’t just come from having an LGBT affinity group – everyone has one of those.”

She continued, “It means recognizing that you must go beyond networking needs to those true nuts and bolts – LGBT protections and same sex couple benefits – and really communicating those to the workforce.”

She explained, “Companies need to understand that policies effect people beyond the workplace. Considering how involved today’s corporations are in employees lives, we need to be sure they include everyone.”