Employers barely get a passing grade on workplace inclusiveness from LGBTQ+ Gen Z, New EY Research Finds

EY US LGBTQ+ Workplace Barometer highlights ignoring Gen Z LGBTQ+ workforce's growing needs could mean millions in increased turnover costs and a shrunken talent pool

NEW YORK, March 12, 2024 /PRNewswire/ -- Employers' efforts around workplace inclusiveness are falling short with Gen Z workers in the LGBTQ+ community. They give their employer's inclusion efforts a C+ grade compared to a B grade from other generations. What's more, they are 3x as likely to be "unsure" about their organization's LGBTQ+ initiatives. That's according to the 2024 EY US LGBTQ+ Workplace Barometer, a study of 500 US LGBTQ+ full-time corporate employees.

Today Gen Z identifies as LGBTQ+ at nearly 6x the rate of Gen X¹, and are expected to make up 30% of the total US workforce by 2030², highlighting disconnects in employee engagement that need to be addressed. And millennials continue to view diversity, equity and inclusion (DEI) as priority. The EY US Generation Survey found that 76% millennial employees would leave an employer if DEI initiatives weren't offered.

"Feeling safe to be your authentic self is something that everyone should be entitled to, but we know reality is often more complex than that," says Mitch Berlin, EY Americas Vice Chair -- Strategy and Transactions and Americas Executive Sponsor of Unity, the EY LGBTQ+ Business Resource Group. "Company leaders should remain steadfast in their commitments to diversity, equity and inclusion, cultivate an environment where people feel comfortable to be themselves and offer the right resources so employees can thrive."

The cost of ignoring inclusion

For many employees, an inclusive environment is a base-line expectation when it comes to joining an organization and a lack of it can drive them to leave a workplace. Only 38% of LGBTQ+ workers who rate their workplace experiences poorly on the EY US LGBTQ+ Workplace Barometer are likely to say they expect to stay with their employer for the next year.

For the average Fortune 500 company, which has about 62,000 employees, improving retention of LGBTQ+ employees by just 5% could result in annual savings of nearly $4.2 million in turnover costs alone.³ "There are millions of dollars on the line, and as the LGBTQ+ population grows, organizations that prioritize inclusiveness will differentiate themselves among top talent," added Berlin.

Conversely, LGBTQ+ workers who rate their workplace experiences high on the barometer are 2.6x more likely to say they intend to stay with their employer for another year.

Understanding generational shifts

Failing to reach and address the needs of a growing Gen Z LGBTQ+ workforce could mean missing out on a talent pool of up to 10 million⁴ workers over the next five years.

• LGBTQ+ Gen Z employees were also found to be 3x as likely to be "unsure" about their organization's LGBTQ+ initiatives.
• On average, Gen Z LGBTQ+ employees surveyed gave their employer's inclusion efforts a C+ grade, compared to respondents from other generations who gave their employer's a B grade, highlighting that Gen Z may have different expectations when evaluating employer actions.

The uneven landscape

In addressing the expectations and needs of the LGBTQ+ community within their workforce, organizations should keep in mind intersectional identities. The survey uncovered some stark findings of racially and ethnically diverse (R&ED) workers within the LGBTQ+ community. Among them:

• R&ED LGBTQ+ employees are 1.7x more likely than white LGBTQ+ employees to experience harassment at a previous employer.
• R&ED LGBTQ+ employees are 2.3x more likely to experience microaggressions in the workplace.

"Building and sustaining a culture where people feel seen and valued starts with leadership setting the tone at the top," says Leslie Patterson, EY Americas and US Diversity, Equity and Inclusiveness Leader. "Through listening, learning, offering support and taking action, leaders will build trust and credibility, which in turn can help their organizations stand out with a powerful and growing segment of the population."

For more information on the 2024 EY US LGBTQ+ Workplace Barometer, as well as additional actionable recommendations for businesses, visit https://www.ey.com/en_us/diversity-inclusiveness/2024-ey-us-lgbtq-workplace-barometer. 

2024 EY US LGBTQ+ Workplace Barometer methodology

Ernst & Young LLP and FleishmanHillard TRUE Global Intelligence surveyed 500 LGBTQ+ full-time workers in the US who hold corporate roles at mid- and large-size organizations (2,500+ employees). The 13-minute online survey was fielded from December 6, 2023, to January 12, 2024. EY employees were not included in the survey sample.

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¹ Data is pulled from Gallup
² Data is pulled from the U.S. Bureau Of Labor Statistics
³ Data is pulled from Capital IQ and company filings
⁴ The data is pulled from the U.S. Bureau of Labor Statistics

SOURCE EY