Research shows gay staff tend to stay with companies that have strong diversity policies rather than risk harassment in less progressive workplaces.

Lesbian, gay, bisexual and transgender (LGBT) employees stay longer and are more engaged when they work for companies that have strong diversity policies.

According to Tris Reid-Smith, editor of The Pink Paper, homophobia is still so rife in the workplace that many LGBT employees would rather stay at progressive companies, and will give more to them, than risk workplace bullying elsewhere.

Research for The Pink Paper by gay consultancy Out Now, released at last month's CIPD annual conference, shows 14% of LGBT employees had suffered harrassment at work because they were perceived to be lesbian or gay.

According to Reid-Smith, LGBT employees still face blatant abuse in the workplace, despite anti-discrimination laws. Companies that do not have 21st-century diversity policies will not only suffer from damaged reputations, but will also lose customers, he warned. "There are an estimated 1.7 million people in the UK who describe themselves as LGBT. We have found that 57% of these people say they would look more favourably on, and be customers of businesses known to specifically recruit from the LGBT community."

Ian Johnson, CEO of Out Now said: "Stronger than average levels of education, coupled with a relative absence of children in gay relationships, means LGBT workers have greater potential to develop their careers." He added: "One of the worrying things is that some companies enter the Stonewall Diversity Champions programme, but workers in these same workplaces report suffering harassment and discrimination at work. Widespread reporting of the top 100 employers can make it seem like being openly gay at work is not an issue. Our figures show this is just not the case."

More than three quarters of LGBT respondents to the Out Now poll said a potential employer's diversity policy was important when deciding where to work, with 62% saying it was 'very important'.