Sep 22, 2006  |  By: JOSHUA LYNSEN  | COMMENTS     

U.S. businesses are increasingly recruiting gay employees and customers, according to new research.

The Human Rights Campaign and other researchers say in separate studies that corporate America is paying special attention to gay consumers while extending more discrimination protections to gay staff.

In HRC’s fifth annual Corporate Equality Index, a record 138 major U.S. companies earned perfect scores by offering domestic partner benefits and barring employment discrimination based on sexual orientation, among other steps.

The report, released Sept. 19 by HRC, revealed a 37 percent increase in top scores compared to last year.

“I am incredibly encouraged and optimistic about the findings in this report,” said HRC President Joe Solmonese. “Companies are not only working to improve their scores, they are actively competing to be ranked the most inclusive and fair-minded in their industry.”

Among the 48 companies to achieve top honors for the first time this year are Coca-Cola Co., General Motors Corp. and Google Inc.

In a separate study published this month, gay marketing professionals Robert Witeck and Wesley Combs of Washington, D.C., say companies are showing gay employees and customers new respect.

“Business Inside Out” says that’s a smart move, because the nation’s estimated 15 million gay, lesbian, bisexual and transgender adults are expected to spend $641 billion this year.

“Gay consumers are like all other good consumers — they’re looking for good quality and service,” Witeck said. “But all else being equal, they’re going to differentiate based on things like the Corporate Equality Index score.”

Solmonese said that’s a major reason why the number of companies with perfect Corporate Equality Index scores has grown tenfold in four years.

 “CEOs are very much aware of their score and its impact on their business,” he said. “A bad score will hurt their bottom line.”

Daryl Herrschaft of HRC’s Workplace Project said compared to last year, 35 percent more companies extend health coverage to employees’ same-sex partners, and 14 percent more companies engage in philanthropic or marketing activities directed toward gays.

Compared to last year, 75 percent more companies prohibit discrimination based on gender identity, and 64 percent more companies offer at least one wellness benefit for transgender employees.

Herrschaft said the trend shows businesses “are rapidly adopting a more complete vision of fairness” for their employees.

But he said there’s room to improve. Wal-Mart, which scored 65 in the new survey, includes sexual orientation in its non-discrimination policy, but doesn’t offer domestic partner benefits.

 “Wal-Mart has made some very important first steps in this area,” Herrschaft said, “although there is still a lot of work to be done.”

Gays working for the nation’s most inclusive businesses said corporate America would do well to enact policies to protect all its workers.

Louise Young, a lesbian and senior software engineer at aerospace company Raytheon in Dallas, noted the policies make gay employees better workers.

“It makes business the focus, not anxiety of losing a job,” she said. “It makes us better not only as employees, but also as managers and as a team that is enriched by diversity, inclusion and openness.”

Improving retention

But the value of such policies isn’t limited to employee relations. Experts said businesses reap further benefits when they promote their inclusive policies.

“It’s a recruitment and retention issue,” Combs said, “as well as a market opportunity.”

Combs noted such policies are important to gay consumers. He said companies that have them — and follow them — often win business from socially conscious consumers.

And, according to “Business Inside Out,” there’s a lot of business to be had. Combs and Witeck estimated U.S. gay buying power at $641 billion this year, $674 billion in 2007 and $708 billion in 2008.

The numbers were derived from U.S. Department of Commerce income figures, and independent surveys that estimate the number of people that “freely self-identify” as gay at 6.7 percent.

“Business Inside Out” says several companies successfully target gay consumers with affirming ad campaigns. It cites Subaru’s “It’s Not a Choice” and American Airlines’ “Everybody’s Something Special” campaigns as examples.

But Witeck, who helped craft the American Airlines campaign, said that companies cannot successfully woo gay consumers through ads alone.

He noted companies must also “walk the walk,” and offer protections and benefits to gay employees.

Combs, a member of the HRC Business Council, agreed. He said a growing number of companies understand, and are working to raise their Corporate Equality Index score.

“It’s becoming an absolute ‘I have to get this score, because it demonstrates who I am as a company,’” Combs said. “It’s all about socially responsible business.”