Beck Bailey, a queer, transgender man, understands the pains of sexual orientation discrimination in the workplace. In the late '80s, he decided to leave his job as a production manager at Stouffer's (the Nestlé-owned food giant), where he then identified as a woman and a lesbian. It was a job he loved, he says, but felt like "I couldn't be myself." For a long time, he adds, he kept a picture of a "fake boyfriend" on his desk, for fear of being found out.

In recent years, a number of companies have increased their efforts in providing more LGBT inclusive benefits. On Monday, the Human Rights Campaign Foundation released its annual "Corporate Equality Index," a report that assesses the LGBT inclusiveness of Fortune 500 companies. As many as 517 businesses earned the top score of 100, up a record 25 percent from the previous year, it found. A total of 887 companies were rated, based on factors like equal employment opportunities and employment benefits.

The incentive for small businesses to become inclusive isn't solely based on ethics, the HRC report suggests. Offering these policies is actually good for a company's bottom line. Consider that the LGBT consumer base accounts for nearly $1 trillion in buying power -- not including their straight or cisgender (those with a gender identity that matches the sex they were assigned at birth) allies.

Smaller, private businesses are joining in

While larger companies with bigger resources, like Kodak and Morgan Stanley, ranked higher in the HRC's report, a number of startups are also making headway. Grocery delivery service Instacart, for instance, scored an impressive 95 on the index. Earlier this year, the startup joined 67 businesses in signing the Amicus Brief, a petition in support of a Department of Justice lawsuit against North Carolina's House Bill 2. (The law, otherwise known as the Public Facilities Privacy and Security Act, reversed a Charlotte ordinance that prohibited discrimination against LGBT people.) Recentl emails show that the law has cost North Carolina as many as 700 jobs, as several companies now refuse do business in the state.

Similarly, Tesla was one of the 517 firms to score a perfect '100' for LGBT inclusion, according to the report.

Keeping up with the times

Today, Bailey serves as deputy director of employee engagement at the Human Rights Campaign Foundation Workplace Equality Program, a not-for-profit advocacy group that aims to help small businesses and Fortune 500 companies to become more LGBT inclusive. (Inclusion, for example, might mean inking equal employment opportunity policies, offering healthcare coverage to transgender individuals, or extending employment benefits to same-sex partners.)

"In today's society, you're talking about a workforce that values diversity and inclusion," Bailey says. "It's not just an LGBT employee who may look at the CEI (Corporate Equailty Index) score, it might be a cisgender, white, college-educated male who just values diversity and inclusion, and is looking at how the company approaches LGBT inclusion as a bellwether of the overall commitment to diversity."

The challenge of becoming more inclusive

A commitment could certainly behoove tech companies, many of which--despite investing millions of dollars into improving their overall diversity--have made minimal to no gains, and are thus delaying reporting their 2016 numbers, according to a recent Wall Street Journal report. Bailey argues that a certain level of complacency has descended on Silicon Valley, making it much harder to put meaningful policies into place.

"There's an assumption that tech companies are very forward-leaning, so they're going to be great, inclusive places to work at," says Bailey. "While that may be true, it's almost as though they rest on that assumption, and haven't necessarily done a lot of diligence around policy and practice and benefits. That's why you see some of our largest tech companies still facing massive inclusion challenges around race and gender."

But beyond the economic onus of having more diversity, employers who foster more loyalty from workers who identify as queer are able to avoid the costs to replace workers who might otherwise choose to leave. (The estimated cost of replacing an employee is around six to nine months' worth of his or her salary, according to the Society for Human Resource Management.)

It's less expensive than you think

Although entrepreneurs operating on a shoestring budget may be leery of introducing new diversity policies, keep in mind that it actually requires little to no money. "The investment from a cost point of view is very minimal," says Bailey. On the other hand, "even in a very small company, things like turnover can cost an amazing amount of your overall budget towards talent."

What's more, if LGBT inclusion isn't something you haven't prioritized in the past, it's never to late to do so. Bailey confirmed to Inc. that Nestlé, his former employer, has since made the HRC's index--with an approving score of 90.

Published on: Dec 5, 2016