In March of this year, Centers for American Progress released a report on why diversity in the workplace could help organizations improve their performance and increase their profit margins. http://www.americanprogress.org/wpcontent/uploads/issues/2012/03/pdf/lgbt_biz_discrimination.pdf
When businesses and large corporations lose opportunities in hiring the best of the most qualified and skilled labor force, cities are equally and adversely affected.
Discrimination drives away the skilled and qualified labor force. Companies compromise their fiscal stability and experience a decline in profit margins with net losses.
Centers for American Progress reports that the price of discrimination cases is a hefty one for businesses. The annual estimated cost of losing and replacing workers who leave their jobs because of discrimination amounts to $64 billion.
In fact, according to Centers for American Progress, a Transgendered employee at IBM filed a discrimination suit against the organization. It cost IBM millions in unrealized profits. The cost of employee replacement occurs at a national rate of $5,000 – $10,000 for hourly employees and $75,000 to $211,000 for executives. In one aggregate study, employees who work in a hostile work environment will cost companies an annual $1.4 billion.
Shareholders recognize that companies with all-inclusive hiring policies improve their profit margins dramatically because the pool of applicants is comprised of the top performers. Shouldn’t we expect cities to adopt all-inclusive policies if cities rely on organizations’ financial earning power? Successful organizations contribute to cities in many ways. When businesses can no longer remain fiscally sound this affects the financial markets and the welfare of the city in which the company operates or has its headquarters.
According to Scott Quehl of Brookings Research, it took Philadelphia and New Haven financial planning to recover their millions of dollars deficit. The cities were either at Junk Bond status or just above Junk Bond status. Investments were deferred, and short fix-it methodologies were running out. Their deficits prevented them from borrowing from capital markets at percentage rates that they could manage. By 1999, both cities recovered with a budget well exceeding their expectations. They improved by cutting costs and expenses among some strategies, one of which was to open their doors to a broader market. http://www.brookings.edu/research/articles/2000/06/summer-transportation-quehl
But, when corporations cannot attract well qualified, and skilled employees and cities cannot attract tourists, then the market shifts and results in lost earnings and fiscal instability.
The cost of relocating organizations to gay-friendly cities, where legal protections do exist for LGBT, might initially be a costly endeavor, but in recognizing a link between shifts in profit margins and a decline in employee retention rates, organizations realize that where they position their headquarters matters. If a company has all-inclusive policies which raise the bar, both regarding employee morale and regarding recruitment but have to risk losing opportunities in recruiting the best candidates for the job, isn’t it best that their shareholders, civic and corporate leaders speak out? Why when a city relies on the success of organizations, would it not offer protections and adopt all-inclusive policies as a matter of Best Practices when its’ leaders step up and speak out?
Are shareholders willing to ride the waves and if so, for how long of a period of time? After all, the bottom line is what matters, and when shareholders cannot see a return on their dollars, the risks in gaining opportunities by relocating to other parts of the State or country might outweigh the risks of losing investors. These concerns do concern those who are running the organizations.
According to authors, Dr. Robert Brown and Ms. Ruth Washton, of Packaged Facts, a division of Market Research which conducts research of the Gay and Lesbian Market in collaboration with another Marketing firm, WiteckCombs Communications, LGBT consumers spent 660 billion dollars in goods and services. The projections for 2011 were set at $835 billion, a rounded 21% increase in four years. LGBT have spent a trillion in consumer spending. Their spending across the globe accounts for 6%. http://www.witeckcombs.com/research_insights/harris_interactive.html
In fact, this number would be exponentially so many times more than this, if businesses global-wide were gay-friendly. Could we venture to guesstimate? The researchers report that Sixty-six percent of LGBT consumers indicated that they would purchase from gay-friendly businesses even if the unfriendly businesses offered lower prices and were convenient.
So why do cities refuse to adopt bills which otherwise would provide legal protections against discrimination for LGBT, if this would improve their economy social standards? How do we get venture capital to flow from booming industries to industries in need of capital?
When we cannot recruit the level of performers corporations to need due to the lack of protections, cities miss out on valuing cultures. Cities which have added value have in turn boosted their economy and their scores on a national level go up.
Folio FLOG Weekly reported in their online August 28th publication Activist and frequent City Commission critic Ed Slavin asked commissioners to amend the city’s Fair Housing Act during public comments.“It sends the message that St. Augustine is open for business, and our hearts are open,” Slavin told Folio Weekly after the vote. http://www.flogfolioweekly.com/?tag=st-augustine
Some of the business owners in Jacksonville, argue that they have the right to select to whom they will open their doors. But, if they are a public entity serving the public, can they? ACLU won a case in Vermont on behalf of a Lesbian couple, who were turned away after the Wildflower Inn learned that they were Lesbian and argued that they turned them away because of their religious beliefs. ACLU won the case based on the federal laws which prohibit discrimination. The message is an important one for business owners that clearly says to everyone – “Open your doors to the general public, you have to follow the same rules that apply to everyone else, and you can’t use your own personal religious beliefs to pick and choose who you want to serve. This is not a new idea.”
According to the Corporate Equality Index of 2004 firms such as some of these referenced moving forward have stepped up their Best Practices by incorporating diversity training, building diversity teams and ensuring that policies include the necessary language for training and protections of LGBT, along with providing sensitivity awareness training in recruitment practices.
If corporations cannot retain their top-performing employees because their city doesn’t offer protections for LGBT against discrimination, they are settling on a mediocre employee while long-term vested employees relocate to gay-friendly cities in exchange for a better lifestyle.
Lifting the glass ceiling to people of color and the spectrum of gender matters a great deal if it means hiring or promoting someone who is qualified for the job. Sexual orientation and gender identity/expression are not what drive business away. What drives business into the ground is the lack of Best Practices and the focus on personal features that hold very little weight in regards to skills sets and performance.
The Williams Institute of Law at UCLA in October of 2011 – Economic Motives for Adopting LGBT-Related Workplace Policies – lists statements made by top 50 federal contractors. The following organizations made these statements.
Diversity and inclusion are part of Boeing’s values at the highest level. Having diverse employees, business partners and community relationships is vital to creating advanced aerospace products and services for our diverse customers around the world. The company’s commitment to diversity means providing a work environment for all employees that is welcoming, respectful and engaging, with opportunities for personal and professional development. This, in turn, increases productivity, quality and creativity and innovation.”
As HP has grown and expanded throughout the world, its workforce has become more diverse. HP believes that this diverse workforce helps the company realize its full potential. Recognizing and developing the talents of each individual brings new ideas to HP. The company benefits from the creativity and innovation that results when HP people who have different experiences, perspectives, and cultures work together. This is what drives invention and high performance at HP. We believe a well managed, diverse workforce expands HP’s base of knowledge, skills and cross-cultural understanding, which in turn, enables us to understand, relate and respond to our diverse and changing customers throughout the world, connecting them to the power of technology. Our overall commitment is reflected in our diversity and inclusion philosophy. http://williamsinstitute.law.ucla.edu/wp-content/uploads/Mallory-Sears-Corp-Statements-Tables-Oct2011.pdf
Centers for American Progress lists some of the corporations with these Best Practices. In looking at the corporations cited in the article by Crosby Burns, Research Associate for the LGBT Research and Communications Project at the Center for American Progress in Washington, D.C., the corporations are mostly positioned in markets where diversity is welcoming, and some protections exist.
Morgan Stanley and Bank of America along with J.P. Morgan, Pepsico, and IBM all have their headquarters in NY. While Microsoft has its headquarters in both Redmond, WA, and NY.
NYC has legal protections for LGBT. In fact, recently NYC’s mayor, Andrew Cuomo, signed a bill legalizing same-sex marriage.
Let’s look at corporate conglomerates such as Lockheed Martin whose headquarters is in Bethesda, Maryland and Dell’s headquarters in Austin, TX, all organizations along with Johnson & Johnson’s headquarters in Brunswick, NJ exist in cities where diversity is welcome. GM’s headquarters are in Detroit, MI which does not have legal protections for GLBT. Yet, Detroit benefits from the hiring policies GM has in place.
Joann Muller, Forbes Detroit bureau of the chief writer, reports that Tim Bryan, chairman and chief executive of GalaxE Solutions, says “If you don’t capitalize on opportunities, you get left behind.”
Muller writes that the entrepreneurs and business leaders are capitalizing on opportunities to turn a city on the brink of bankruptcy, is to gain on realized profits. By bridging with Detroit’s police force in addressing solutions to a rapidly growing crime rate and offering protections to the citizens and collaborating with the city’s existing smaller businesses, funding programs which provide for green, sustainable agriculture in urban food. Whole Foods contributed $10 million to local businesses to help them grow and become financially independent as business operations.
Jacksonville, FL continues to coexist despite the massive debt it carries. Civic leaders and CEO’s who run corporate conglomerates and small businesses have come to city hall in the recent year and months to encourage the city council members to pass legal protections for LGBT. Among these bigwigs were ex-mayors who reported seeing the backlash of a city which refuses to recognize gay rights. Some of them said a decline in employee retention rates and lost opportunities in hiring the most qualified and skilled individuals in the labor force. City council members in Jacksonville, however, were more concerned over their own small business operations despite expert witnesses such as educators and leaders from programs well versed in LGBT matters.
None of the arguments in favor of passing the human rights bill mattered. Some of the city council members in interviews with the press argued that LGBT would result in turning away their loyal clients who would live in fear that their rights would be placed at risk. They argued that Transgendered persons would pose a threat to their children and clientele, while others claimed it would be against their religion to accept the lifestyles of the LGBT and one city council member went as far as filing a bill 2012-377, pledging religious freedom. She also runs a congregation and has published books which address homosexuality as a sin. Sentiments shared by some of the citizens ran parallel with attorneys from the Family Research Council making a case against voting in favor of bill 2012-296 for fear that this would be damaging to families.
The data presented by some of the leaders shed light on what happens when inefficient hiring and firing decisions result in costly and harmful business practices. None of which seem to sway this group of city council members. What persuaded 17 city council members were the arguments from Family Research Council which were based on misaligned data while the caveat came from First Baptist Church whose leader, on YouTube, announced that they were pleased the city council heeded their advice and voted against protections of LGBT.
Shouldn’t legal protections against LGBT discrimination weigh considerably more when it affects the city’s economic downturn? Doesn’t a city have fiscal as well as social responsibility? Is Jacksonville caught in a gridlock of religious warfare? The arguments during the council hearings were mostly religious. When the federal government has federal protections in place against housing discrimination, and small independent entities can discriminate, aren’t they in essence in violation of the federal laws if they are operating as public entities? Which does raise a red flag on the rental housing industry since they are managing public properties for rental income?
Is Jacksonville hedging towards a fiscal cliff? The answer is yes. Many cities are facing fiscal cliffs by year end 2012. With the amount of debt Jacksonville is in can it afford a zero tolerance policy? COJ reported in their Quarterly Summary of August 2012 that the city has over 3 billion in outstanding debt. The short end of the story? When a city has to declare bankruptcy then who will provide and pay for public services? Who pays the garbage company for collecting garbage? Who pays the utility company? Who does or doesn’t receive their pension? Is this city in need of city council members who can serve its’ best interests without serving their own first and at the city’s welfare?
What are Jacksonville’s Best Practices? Are Jacksonville’s city council members operating in the city’s best interest when they avoid legalizing protections against discrimination for LGBT? What in the end will this cost the city?
Is Jacksonville placing itself at a competitive disadvantage compared to cities such as Orlando and Miami?
Will Jacksonville, along with these corporations, be adversely affected?
Will large corporations relocate?
Prosperous cities have recognized that narrowing their diversity pool ranging from tourists to employees are some of the reasons for economic shifts and the best way to avoid fiscal cliffs is to adopt Best Practices in providing policies that protect LGBT from discrimination. The best message a city can send is in opening her doors to a diverse market.