Retail giant Target has come under fire for its controversial decision to remove merchandise celebrating 2023 Pride Month. Though Target said the reason for the decision was to protect employee safety, LGBTQ+ advocates and allies condemned the response, stating it was just another example of rainbow capitalism.
Internally, Target's employees reported being negatively impacted by the decision, showing employers how business decisions impact not only business outcomes, but also the company's culture.
Target must now deal with the fallout, but other employers have the opportunity to avoid a similar outcome.
Target and Rainbow Capitalism
Indeed, Target's statement framed the decision as a choice to ensure employee safety, explaining that it was made because the company had, "experienced threats impacting [its] team members' sense of safety and well-being while at work."
What the statement didn't mention is that Target's stock suffered big losses following the backlash, dropping to its lowest value since mid-2020 and being downgraded by JPMorgan.
Recently, Anheuser-Busch received similar criticism for both its decision to partner with transgender actress Dylan Mulvaney, and after the fact, for its response to the anti-LGBTQ+ backlash. Since the post, Bud Light sales have also dropped significantly.
These losses didn't go unnoticed. The resulting message both companies sent was that their corporate Pride efforts are not genuine, but rather driven by what they stand to gain—or lose—financially.
The Fallout
Ultimately, Target and Anheuser-Busch suffered more damage to their brands and bottom lines after issuing their respective statements, and in Target's case, removing certain products. Many onlookers felt that Target compromised its commitments to the LGBTQ+ community and undermined the purpose of Pride by not showing resolve when it mattered most.
A recent report shows that Target's response also took a toll on its employees, who said Target's abrupt removal of Pride products made them feel alienated. Target has been known as a LGBTQ+ friendly workplace, receiving top scores on the Human Rights Campaign's Corporate, Municipal and Healthcare Equality Indices.
The CEO has since made statements in support of the LGBTQ+ community, seemingly recognizing the bigger problem that Target created by waffling.
How Employers Can Respond
Target's story has company leaders everywhere questioning their own practices surrounding Pride Month and other DEIB initiatives that venture into social justice issues. And with good reason: investing in and committing to well-rounded DEIB efforts has known benefits for employees and the company. However, if employers don't align their internal commitments to employees with their actions in the market, eventually, those benefits will erode.
To ensure alignment, employers should consider the following:
1. Avoid Institutional Betrayal
Target and Anheuser-Busch's reactions to LGBTQ+ backlash can be described as an example of institutional betrayal. Institutional betrayal can occur when the institution an individual trusts or depends upon mistreats them, according to Dr. Jennifer Joy Freyd, PhD., who coined the term. It can be overt or less obvious. For example, it can occur when an employer does not act when it is reasonably expected to or acts in a way that contradicts expectations.
The fallout from Target and Anheuser-Busch showed that employers choosing to take a stance on a societal issue must honor their commitment—internally and externally. Otherwise, consumers, investors and employees are likely to feel betrayed. In the employment context, companies that commit institutional betrayal can damage employee engagement, trust and psychological safety.
2. Make a Strategic Communication Plan
Employers can help ensure that the company remains resolute by preparing for different scenarios with a strategic internal communication plan. A strategic plan will help employers predict possible outcomes and communicate with employees consistently.
When creating an internal communication plan, consider the following tips:
- Ensure consistency between internal and external communications;
- Align internal communications with company values and mission, including its commitment to allyship;
- Define roles and responsibilities;
- Prepare for positive and negative outcomes;
- Be trauma-informed (e.g., ensure that communications show empathy, favor one-on-one communication with trusted managers where appropriate, etc.);
- Have support systems in place for employees (e.g., communicate with employee resource groups, have outreach resources ready and prepare managers); and
- Be honest with employees.
3. Communicate With, Not Just To, Employees
In practice, employers often issue a communication and offer employees a contact, "if they have any questions." Though communications like these may be needed (i.e., for routine announcements or benefits communications), when addressing social justice issues at work, this type of communication will do little to make space for impacted employees.
Instead of talking at employees, consider creating space for employees to share their input and be heard. To facilitate conversation, employers can host town halls, coach managers to mediate team conversations, or offer employees the opportunity to schedule one-on-ones.
By making space, employers can reiterate their commitments while also providing employees with a say in how the company goes about implementing those commitments internally and externally.
4. Ensure Leadership Commitment
The CEO for Anheuser-Busch received plenty of criticism for his own statement (or lack-thereof) following the anti-LGBTQ+ backlash the company received. This criticism reiterates just how important it is for leadership to be as committed to the company's stance on a social justice issue as the rest of the company. Without this alignment, the entire company suffers, including the employees.
According to Laci Loew, XpertHR Senior Analyst for HR Strategy and Insights, "Organizational commitment to an inclusive culture requires leaders, starting with senior leaders, to display inclusive behaviors." This includes advocating for stated commitments internally and externally, aligning the company's DEIB strategy with the business strategy and holding other leaders accountable for their inclusion efforts.
5. Go Beyond Pride Month
Pride Month brings much needed attention and visibility to the LGBTQ+ community. However, when a company limits its efforts to June alone, it runs the risk of causing employees to feel that the company's allyship is inauthentic.
This practice is often referred to as "rainbow washing." When employers rainbow wash, employees who believed in the company's dedication to supporting LGBTQ+ community members may feel tricked when they realize that the company doesn't hold up its end of the bargain outside of June.
Employers can continue to support their LGBTQ+ employees beyond Pride Month by acting on their allyship in the workplace. Specifically, employers can:
- Prevent workplace discrimination;
- Practice inclusive language;
- Address microaggressions;
- Prioritize psychological safety; and
- Conduct pay equity audits.
Employers should also review their employee benefits for opportunities to ensure LGBTQ+ friendliness. This may require plan changes or supplemental insurance.
A Final Word
For many, Pride Month is a time recognize the accomplishments of LGBTQ+ rights activists and celebrate love and belonging. Employers and individuals who choose to participate must remember, however, that Pride Month was established to honor the Stonewall Uprising of 1969, a protest against the mistreatment of the LGBTQ+ community.
True allyship, whether from employers or individuals, should honor Pride Month's history and origins as a protest for equal rights.
