Open diversity pays in Hong Kong's workplace
Updated: 2014-11-20 09:05
In October last year, HSBC's main building was illuminated for the first time with the rainbow colors used to represent lesbian, gay, bisexual and transgender (LGBT) people. The bank's CEO, Anita Fung Yuen-mei, explained at the time that the rainbow lights were a sign that the bank supported LGBT inclusion. The bank was doing this, she added, not only because it was "the right thing to do" but also because of the business case. "HSBC has no choice but to be an authentically compassionate organization for which all its employees can joyfully work," she explained. In this realization, she joined Lloyd Blankfein, chairman and CEO of Goldman Sachs, who famously responded to the question "Has your firm lost business because of your support for LGBT rights and same-sex marriage?" that he didn't care if it had, because no one had yet been able to walk him through a case that discrimination made good business sense.
This realization that inclusive policies give a competitive advantage is now one shared by many of Hong Kong's business leaders today. These hard-nosed executives do not see their firms as human rights advocates nor are they prepared to allow anything to deflect them from providing returns for their stakeholders. Instead, their support for LGBT equality in the workplace is motivated by the realization that having equal, inclusive LGBT policies enhances staff relations and makes business sense.
First, supporting LGBT equality dramatically improves productivity at minimal cost. Bank of America Merrill Lynch calculates that 5-10 percent of its staff are LGBT and that these, when forced to hide their orientation or gender identity at work, do so only at a terrible cost in energy and emotion. That leads to a drop of around 30 percent in their productivity. Treating LGBT employees equally and inclusively leads to an immediate rise in creativity at virtually no cost.
Second, having good LGBT policies is closely tied to increased profitability. Credit Suisse is now so convinced that good ratings in the Corporate Equality Index (which the New York Human Rights Campaign uses to measure LGBT policies) lead to better corporate profits that they have issued an LGBT Equality Portfolio, which will include the stock of the top 20-30 equality-rated US equities from the S&P 500. These stocks outperformed the S&P 500 by 5 percent between the 2008 and 2013. This is not only because of the effect good LGBT policies have on a firm's productivity, but also because LGBT policies are a measurable indicator of performance across a range of activities.
Third is the massive market for LGBT-friendly business, the "pink dollar". Companies which offer LGBT customers better treatment attract and retain them. How big this potential market is has always been a matter of hazy conjecture, but by now a good deal of research has been done to clarify the figures. Worldwide, LGBT people are estimated to have 10 percent greater income than their heterosexual counterparts. The margin in disposable income is even greater and the numbers are huge. China, for example, is reckoned to have about 85 million LGBT people (more, in fact, than the entire population of any single European country), and these have an annual income of some $300 billion. The LGBT market reaches approximately $800 billion for Asia and a staggering $3 trillion worldwide.
Fourth, LGBT inclusion aids talent recruitment. It attracts employees of the new generation which are overwhelmingly in favor of LGBT equality and protection.
Business has also started to get the message that it cannot successfully implement equal and inclusive policies without being public about it. It is no longer enough to have good diversity policies; the world has to be told if customers are to know and if potential employees are to notice.
Martin Cubbon, the CEO of Swire Properties, recently summed this up succinctly: Swire had to be an 'open, inclusive meritocracy' to gain the edge it needed in the market place. The firm now publicly recognizes that, particularly in its hotel business, "its LGBT employees are instrumental in delivering our product." Swire is not alone. The major Hong Kong businesses are coming to the understanding that to generate greater wealth in a world city, they and Hong Kong need to embrace inclusiveness and diversity.
The author is Hong Kong correspondent for the Singapore-based LGBT online newsletter fridae.com. In 2008 he was appointed English secretary of the Pink Alliance, Hong Kong's largest grouping of LGBT organizations and he remains prominent in LGBT activism in that post.
(HK Edition 11/20/2014 page10)