When it comes to LGBTQ inclusion, Gen Z gave their companies a C+

Young professionals are serious about keeping their companies accountable for the culture they want to see at work, and that includes being harsh when rating inclusivity efforts. 

Approximately 20% of Gen Z adults identify as LGBTQ, according to a recent study from accounting company EY. And while employees from every other generation gave their employer a grade of B for LGBTQ inclusion efforts, the average grade given by Gen Z participants was less favorable at an average of C+ — and it's up to employers to change their own standing. 

"Gen Z brings unique perspectives, experiences and learning preferences to the workplace," says Mitch Berlin, vice chair for EY Americas. "They value inclusion and diversity deeply, and they expect their employers to reflect these values." 

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Only 38% of LGBTQ workers who rate their workplace experiences poorly are likely to remain with their employer for the next year, according to EY's findings, while 97% of participants who rated their organization highly on the barometer responded that they planned to stay with their employer. For the average Fortune 500 company, improving retention of LGBTQ employees by just 5% could result in annual savings of nearly $4.2 million in turnover costs alone.

The alternative, however, could seriously stunt the success of their future recruiting efforts. In fact, an estimate from EY found that missing the mark with Gen Z LGBTQ employees could cost employers access to a talent pool of up to 10 million workers by 2030. 

"It's crucial for companies to better understand the sentiments and aspirations of this segment of the workforce or risk losing out on top talent," Berlin says. "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." 

Read more: Does Gen Z have the power to revert RTO mandates?

Thirty-six percent of millennial LGBTQ employees and 40% of Gen Z LGBTQ employees who left their jobs were leaving companies that were not welcoming to queer communities, EY found. There are a few ways employers can avoid being lumped into that sum, according to Berlin, but it all starts with a commitment from the top that trickles down to the whole of the organization.  

First, Berlin suggests employers should establish targeted allyship programs to educate non-LGBTQ employees and create business resource groups where queer employees can connect with colleagues, mentors, sponsors and senior leaders. They should also provide accessible health and wellness resources tailored to the LGBTQ community, incorporate inclusive recruitment and retention strategies and design ongoing employee surveys to gauge sentiments around psychological safety and belonging. 

"It's clear that prioritizing LGBTQ engagement and retention and cultivating an environment where everyone can be their authentic selves is a strategic business imperative," Berlin says. "Leaders who get this right will reap the rewards of harnessing top talent, reducing turnover costs and building a more resilient, competitive business."