According to the latest research from the Aalto University School of Business and the University of Vaasa, companies that take their corporate responsibility to LGBT+ policies seriously yield better performance.
The research, which was conducted by Jukka Sihvonen, Assistant Professor at Aalto University School of Business along with the University of Vaasa team, looked to examine the relationship between LGBT‐friendly corporate policies and company performance, using data on 657 publicly traded US firms over the period between 2003 to 2016.
The study found strong evidence that not only do more LGBT-friendly companies see higher performance and profitability, but also higher stock market valuations.
This is because firms that focus on inclusive policies produce happier and more satisfied workers, and what the study called ‘altruistic workplace behaviour’. Due to this, workers also have a tendency to stay in their role longer, and remain committed to the company.
The research also noted that creating a more open and welcoming culture attracted a wider talent pool and therefore more varied range of skilled talent within the recruitment stage, and kept them engaged whilst working at the company.
“Our empirical findings demonstrate that LGBT‐friendly corporate policies pay off, and the documented positive relationship between LGBT+ friendliness and firm performance can be considered economically significant” said Sihvonen.
“Previous studies have documented that LGBT‐friendly firms are associated with greater employee commitment, improved job satisfaction, increased employee productivity, and more altruistic workplace behaviour” he added.
Although the study was US-based, it has key takeaways for HR regarding the importance of promoting D&I in the workplace.
How can HR promote equality and D&I within the workforce?
Previously, Karen Davies, Head of HR at both Washington Green Fine Art and Castle Fine Art stated that the first step in improving D&I is to get the ‘employer brand’ right.
“[Businesses] need to be clear and honest about the type of employer they are and what they can offer a prospective employee. The more flexible and diverse their proposition, the wider the range of candidates they will attract. They also need to ensure their recruitment material reflects the diversity of their current workforce,” Davies said.
“Companies can also consider applying for accreditation which indicates that they have a commitment to diversity. This can provide HR teams with support and information, as well as advertising the firm’s commitment to inclusion for potential employees,” she concluded.
Kiernan Howells, HR Grapevine
May 2021