The truth about the UK’s LGBTQ+ pay gap (and what you can do)

There has been so much progress in terms of acceptance and visibility of LGBTQ+ people in the workplace. But, as with the gender pay gap, comes the responsibility to ensure fair treatment and equal opportunities for all employees. 

One area in particular that demands attention is the LGBTQ+ pay gap: the difference in average earnings between lesbian, gay, bisexual, transgender and queer employees compared to their straight counterparts. 

This article dives into the intricacies of the LGBTQ+ pay gap, the impact it has on queer people’s lives, and steps businesses of all sizes can take to improve how they pay their employees.

What is the LGBTQ+ pay gap?

The LGBTQ+ pay gap refers to the difference in average earnings between Lesbian, Gay, Bisexual, and Transgender employees compared to their straight colleagues, caused by systemic fear or aversion to differences from the norm. 

This is also why there is an ethnicity pay gap, a class pay gap, and a gender pay gap at many companies, due to the majority of business boardrooms statistically being dominated by the same group of white, upper or middle class men. 

Research by the Trades Union Congress (TUC) suggested that the LGBTQ+ pay gap is currently at a significant 16%, meaning LGBTQ+ workers earn an average of £6,703 less per year.

Why does the LGBTQ+ pay gap exist?

There are several factors that contribute to the disparity in pay. Here are some of the key reasons:

• Homophobia: homophobia encompasses a range of negative attitudes and feelings toward LGBTQ+ people based on irrational fear and has been defined as contempt, prejudice, aversion, hatred or antipathy. It is typically fuelled by general ignorance or religious beliefs that preach against alternative sexualities. At best, homophobic people are dismissive and are prone to perform microaggressions – and at worst they can become violent.
• Discrimination + unconscious bias: LGBTQ+ employees may face assumptions about their personal lives during recruitment, promotion, and salary negotiations which tend to lead to lower pay offers and missed opportunities. Recruiters and managers might hold unconscious biases against LGBTQ+ candidates, potentially overlooking them for promotions or leadership roles.
• Lack of transparency: a significant number of businesses (around 87%) don’t currently monitor their LGBTQ+ pay gap using HR and payroll software. This lack of transparency makes it difficult to identify and address potential discrepancies.
• Workplace climate: one in five workplaces reportedly lack policies supporting LGBTQ+ staff, according to TUC. This is apparent not just in larger companies but in the SME and startup ecosystem too. When employees feel they cannot be open about their sexual orientation or gender identity, it can stifle career progression and hinder access to equal pay.
• Career progression: feeling pressure to hide their sexual orientation or gender identity can limit networking opportunities and hinder career advancement for LGBTQ+ employees.

The impact of the pay gap

The LGBTQ+ pay gap has a negative impact on both individuals and businesses. 

For LGBTQ+ employees, lower earnings can lead to financial strain, reduced opportunities, and a sense of workplace injustice. Companies, on the other hand, lose out on the full potential of a diverse workforce. 

Why is closing the LGBTQ+ pay gap important?

Creating a workplace that actively supports LGBTQ+ employees isn’t just the morally right thing to do, it’s also a smart business decision. Studies by McKinsey & Company have shown that companies with greater diversity are 35% more likely to outperform their peers financially. 

When LGBTQ+ employees feel comfortable being themselves and advocating for their ideas, it fosters a culture of innovation and creativity. This can lead to a wider range of perspectives being considered, ultimately leading to better problem-solving and decision-making within the company. 

Additionally, a 2020 report by Diversity Best Practices found that companies with inclusive cultures have a 17% higher level of employee engagement. This translates to a more motivated and productive workforce, ultimately benefiting the company’s bottom line.

What can businesses do to close the gap?

Companies can implement several strategies to foster a more inclusive culture that avoids isolating LGBTQ+ employees:

Visibility and open communication

• Employee resource groups (ERGs): support the creation of LGBTQ+ ERGs. These employee-led groups provide a safe space for connection, mentorship, and advocacy within the company. According to HR Grapevine, 65% of LGBT+ young adults said a company’s commitment to DEI was “very important” to them when applying for a role, and 46% are currently or have previously been part of an LGBTQ+ network at work when it is available.
• Pride month and beyond: celebrate Pride Month in June, but also extend efforts year-round. Be sure to mention support for LGBTQ+ people when recruiting, by including information about company ERGS in job postings as a perk of applying, for example. Signifiers to show that your company is LGBTQ+ friendly are important, but make sure they aren’t performative. The difference is 100% in what else is done for LGBTQ employees and the wider community in the times when eyes are not on you – and LGBTQ+ people can tell the difference between true commitment and cash-grabs at specific times of the year.
• Open communication channels: create anonymous reporting systems for employees to report any discrimination or harassment. Regularly conduct surveys to gauge employee sentiment and identify areas for improvement.
• Acceptance through exposure: most employees just want to come in and do their work, and feel like “all this stuff” (stuff being anything to do with LGBTQ+ issues) is being shoved down their throats. It’s not malicious, but apathy can degenerate into negativity over time. If you can combat this slowly, intelligently and in a sustainable way through small but meaningful efforts, and exp[ose straight employees to actual LGBTQ+ people amongst the employee base, it will serve to reduce outwardly negative issues.
• Safe spaces: sometimes people are just curious, and don’t mean to offend. If it is not too much of a burden on LGBTQ+ employees, find a few who would be happy to volunteer their time and create a safe space for people to be nosy and ask what they’ve always wanted to ask, within reason. This may go a long way in showing that we’re all pretty much the same, there’s nothing to fear or be dubious about, and goes miles in normalising the situation for everyone. Commission-based bonuses or incentives for the extra work could work well here. Please don’t ask them to do emotional labour  for free – there is a big enough pay gap as it is!

Unconscious bias training

• Implicit Association Tests (IATs): IATs can help  identify unconscious biases in  hiring managers and leadership teams.
• Blind promotions: when promotion time draws near,  a good idea is to have the accomplishments of employees written up in plain black and white, in a way that showcases the value they have brought to your company, without any other identifying information. Using this method of blind promoting would be a way to ensure that no favouritism or implicit bias occurs in the selection process.
• LGBTQ+ people in leadership: if the board skews towards any one ethnicity, gender, or sexual orientation without any higher-up representation for queer people, it may be time to reflect (or shake things up).
• Interactive workshops: conduct regular workshops that educate employees on unconscious bias, its impact, and strategies to mitigate it.
• Focus on skills and qualifications: implement clear and objective criteria for hiring and promotion, focusing on skills, qualifications, and past performance.

Inclusive benefits and policies

• Domestic partner benefits: offer comprehensive domestic partner benefits that extend coverage to same-sex spouses and their families.
• Parental leave policies: ensure parental leave policies are inclusive and offer equal benefits to same-sex couples and those considering adoption.
• Gender-neutral restrooms: consider offering gender-neutral restrooms to promote inclusivity for transgender and non-binary employees.
• Acknowledge diverse holidays and celebrations: recognise and celebrate diverse holidays and cultural events alongside traditional holidays.

Conclusion

A workplace that embraces LGBTQ+ employees isn’t just about fairness and equality, it’s an investment in a company’s success. 

Studies show a clear link between diversity and inclusion, and a company’s bottom line – so by creating a culture of open communication, implementing unconscious bias training, and offering inclusive benefits and policies, businesses can unlock the full potential of their workforce. 

When employees feel valued and safe to be themselves, it leads to a more engaged, innovative, and ultimately, more profitable organisation. This shift towards a truly inclusive environment fosters a positive and productive work environment where all employees can truly belong, and feel empowered to give their best.