While many companies have made progress in creating more inclusive cultures for LGB (lesbian, gay, and bisexual) employees, transgender and gender nonconforming (TGNC) employees routinely experience both subtle and blatant forms of aggression, insensitivity, rudeness, and discrimination at work. They have few role models and few places to turn for support. They’re wary of coming out to their HR departments and direct supervisors.
This alienation is indefensible — but fixable. BCG recently surveyed 2,230 TGNC employees in eight countries and conducted 34 interviews with TGNC employees. Primarily, we found that TGNC employees want respect in the workplace, which is both reasonable and achievable for organizations committed to DEI. CEOs, HR departments, and managers all have distinct roles to play in creating an inclusive workplace culture for TGNC employees.
The Harsh Work Reality for TGNC Employees
We surveyed 2,230 TGNC employees in the Americas (Brazil, Mexico, and the U.S.), Europe (France, Germany, and the UK), and the Asia-Pacific region (Australia and India) to understand the TGNC work experience, with more than 245 TGNC employees within seven of the countries and 405 TGNC employees in the U.S. Each country was weighted equally in global averages. We also conducted 34 in-depth interviews with TGNC employees who work in offices and other corporate settings around the world. To compare the TGNC experience with that of other employees, we also surveyed 2,283 cisgender, straight employees and 2,245 cisgender, LGB employees. In addition, we conferred with an internal council of TGNC BCG employees to ensure the TGNC lens was applied to all of the findings.
Cisgender refers to a person whose gender identity and expression correspond to the cultural expectations of the sex they were assigned at birth. Transgender describes people whose gender identity or expression or both are different from cultural expectations of the sex they were assigned at birth. Transgender does not suggest sexual orientation. Transgender people may identify as straight, gay, lesbian, bisexual, queer, questioning, or other identities. Gender nonconforming describes people whose behavior doesn’t conform to the traditional expectations of their gender, or whose gender expression doesn’t fit neatly into a category. Many but not all gender nonconforming people identify as transgender. In this report, TGNC employees include those who identify as nonbinary — those who do not identify with traditional “men” or “women” gender categories, or who may identify as being both a man and a woman, somewhere in between, or as falling completely outside these categories.
In the survey, fewer than one-third of TGNC respondents reported being fully out at work. On the low end, only 19% of TGNC employees are fully out in France, compared with 43% in Brazil at the higher end. In all countries other than Brazil, TGNC individuals are also less likely to be out at work than their cisgender, LGB colleagues.
Why don’t more TGNC employees come out or present at work? The most-cited reason: They want to separate their private and professional lives. They also cited concerns around negative reactions from clients, customers, or coworkers, as well as career damage. “My ideal vision would be to no longer have to say that we are homosexual, bisexual, transgender. As a nonbinary person, I just want to be neutral,” said an employee in France.
Conversely, when TGNC employees do come out, they say it’s because they want to be authentic at work — the number-one reason in all eight countries. Working in an inclusive corporate culture also plays a large role for those TGNC employees who come out, being the second- or third-most cited reason in all eight countries. There is still much to do on this front. “In Mexico, there is still no culture within the vast majority of companies to offer jobs to trans or nonbinary people,” a TGNC employee said in an interview.
Shockingly, more than 40% of survey respondents reported being victims of sexual harassment or misconduct at work. That share rises to 61% in India and 51% in Australia. More than 60% of respondents — 76% in India — reported 10 or more aggressive behaviors or negative work experiences in the past year that they attribute to their gender identity or expression.
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These aggressive behaviors and negative experiences range from overhearing gossip about their gender identity to being told not to share their TGNC identity with clients or customers. Across all eight countries, one-third of TGNC employees said their gender identity and expression has hurt their career. That share was much higher in India (63%), the UK (52%), and Australia (48%).
“People laugh about you, tease you, and deadname you. They deny you opportunities for career growth and to be part of a competitive project,” a transgender woman in India said in an interview, using the phrase associated with a transgender person’s former name. “A lot of people think it’s OK to sexually harass trans people because there is nothing protecting them.”
TGNC Inclusion Matters
Apart from the moral imperative of treating TGNC employees with respect and dignity, inclusion is good for business. We found that being inclusive of TGNC employees has implications in the following areas:
Recruiting and retention.
As a result of these types of experiences, two-thirds of all TGNC employees said they have not applied for a job at companies where they perceive the culture to be noninclusive. Over three-quarters said that inclusion is a major factor in choosing a job. For example, when a 23-year-old nonbinary teacher in New York applied for a job at another school, the job interviews turned them off. “I knew right away it was not going to be the right job for me,” they said. “No job is worth going back into the closet and not presenting as my full and authentic self.”
More than half of respondents dropped out of the recruiting process, declined a job offer, or left a company because of their perception of a noninclusive corporate culture. This trend is especially pronounced in Australia, India, and the UK.
The TGNC community is a growing force socially and economically. A Pew Research Center survey found that 1.6% of U.S. adults identify as transgender or nonbinary. That share rises to 5.1% among adults under the age of 30. The survey also found that 42% of U.S. adults know somebody who is transgender.
Where society goes, business must follow to stay relevant. Recent research by BCG has demonstrated that inclusive workforces are more productive and more innovative. They also have more ambitious employees and lower attrition.
TGNC employees who are out at work feel more authentic (81%), professional (70%), and innovative (70%) than those who are not out. “I am so much better at my job now. I’m more confident. I’m a better manager and a better leader,” a 29-year-old transgender woman in the U.S. said. “I don’t have to hide myself. I get to be myself consistently. I get to be comfortable.”
Notably, inclusion benefits all employees. When employees believe that DEI programming is a priority, the percentage of all employees who are happy increases by 31 percentage points and those who feel motivated increases by 25 percentage points.
The Gulf Between TGNC Employees, HR, and Direct Managers
One of our most consistent findings across the eight countries is that TGNC employees are uncomfortable being out to their HR and benefits teams. In Germany, the UK, and the U.S., TGNC respondents ranked HR as the internal stakeholder to whom they felt least comfortable coming out. In Australia, Brazil, France, and India, respondents ranked HR second-to-last. They are also uncomfortable being out to their direct manager in most countries, with Australia, France, and Germany being exceptions.
This discomfort with HR and direct managers is troubling. HR is directly responsible for putting in place TGNC-friendly policies and benefits and for acting as a sounding board. Direct managers are responsible for the day-to-day well-being and psychological safety of all employees and are the best positioned to protect employees from harmful comments or actions. If TGNC employees don’t feel comfortable being out to these groups, it’s hard to imagine a path to creating an inclusive environment.
TGNC Inclusion in Practice
Business leaders can play an important role in helping TGNC people live free of discrimination, harassment, and insensitivity. They may not be able to change the underlying beliefs of their employees, but they can change expectations of employee behavior, particularly how they treat TGNC colleagues. While everyone is responsible for creating a safe, welcoming, and inclusive workplace, three sets of employees stand out in their ability to make a difference:
The board and C-suite.
At companies where senior leaders are committed to DEI, 84% of employees feel valued and respected, as opposed to 44% at companies where leaders are not committed. These commitments must be backed up by tangible actions, including policies, sensitivity training for employees, and adaptations to the work environment, to clearly demonstrate leaders’ care and concern for their employees’ happiness and well-being.
The C-suite should be outspoken advocates and allies for the TGNC community within the organization and possibly outside, too. They should routinely meet with TGNC employees and hear their concerns.
This commitment to TGNC inclusion should be part of the C-suite’s overall accountability for achieving diversity and inclusion goals and for identifying and promoting high-potential employees from diverse backgrounds. Top executives should be encouraging the creation of pipelines of diverse talent, including TGNC employees, to move up in the organization. They should stay on top of diversity and inclusion metrics so that they know what parts of the organization are hitting or missing targets.
HR staff must build trust with TGNC employees through policies, actions, and ongoing commitment. At a minimum, HR needs to ensure TGNC employees feel both physical and psychological safety, including freedom from harassment, misconduct, and hostility. HR staff should also ensure that HR systems recognize nonbinary gender options, that changing names on official documents is hassle free, that gender-neutral bathrooms are available, and that gendered dress codes are eliminated.
HR policies should address sexual orientation, gender identity, and gender expression, and resources should be allocated to that initiative. Companies should audit their health benefits and policies for the LGBTQ+ community with an eye on what needs to be tailored for their TGNC employees. Gender affirmation care, specialized mental health coverage, and equitable parental leave are all important elements of a TGNC benefits package – with the first being unique to the TGNC community.
An LGBTQ+ employee resource group can provide a formal place and process to bring people together. Authentic conversations, conferences, and trainings should address the TGNC community. Allies are also crucial to inclusion. While it’s important to have allies in leadership who can support changes in policies, employees at all levels can play valuable roles as allies.
Equitable access to personal and professional development can help TGNC employees feel they’re being treated fairly. HR staff should track retention, promotion, pay, and the quality of feedback for all employee groups, including TGNC employees. Formal mentorship, networking opportunities, senior-level sponsorship, and diverse career development councils can all play a role.
In recruiting and onboarding, small moves can pay big dividends. Companies can assign buddies who can explain TGNC culture and experience to candidates. They can also sponsor or host recruiting events in which TGNC employees play prominent roles and create recruiting material aimed at TGNC candidates.
Finally, all employees should receive TGNC sensitivity training. Employees ought to know how to respect pronouns, recognize unconscious bias, and have the tools they need to step in to mitigate potentially harmful situations.
Managers have outsized influence in shaping the daily experience of employees. They can be frontline advocates for inclusion by creating a psychologically safe environment for all employees. They need training in identifying and remediating bias and harassment, having safe conversations on sensitive topics, and encouraging authenticity among their staff.
Managers hold responsibility for making their team’s culture inclusive. They should set aside time for teams to develop inclusive working norms together, making sure there is awareness of differences and individual vs. collective requirements. They should also create safe one-on-one spaces with their team members by spending time with them individually to understand their specific needs and respond constructively.
Managers need to be held accountable for building a diverse staff, from representation within their teams to promotion decisions. They should be provided with recruiting, promotion, attrition, and representation metrics to ensure their teams are diverse and that processes are equitable.
Employees in most geographies are reluctant to come out to their managers because they fear it will affect their reviews or promotion opportunities, so it’s important for managers to promote and ensure a culture within their teams that does not allow for any potential biases. Where necessary, managers should liaise on behalf of their team with HR to ensure everyone is treated equitably. An important element of inclusion in the workplace is in formal and informal mentorship and sponsorship, and it is the manager’s responsibility both to provide mentorship and sponsorship within the organization and also to ensure their team members receive it.
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Creating inclusive cultures for TGNC employees is a critical component of any company’s DEI efforts. “Being out has given me a lot of exposure within my company,” said a 34-year-old nonbinary account manager for a global company that the Human Rights Campaign has identified as one of the best places to work for LGBTQ equality. “I’ve spoken on company-wide panels, which was daunting but exciting. If I can share myself to broaden the horizon of others, I want to do that.” Imagine if all TGNC employees had this manager’s engagement and enthusiasm. The workplace would be a better place for employee and employer alike.
Authors’ note: We would like to thank Jen Cox and Liam Klenk for their invaluable input into this report. Thank you also to Ashley Dartnell, Matt Krentz, Nicolas Llinas, Nolan Rynecki, and Elliot Vaughn for their contribution to the report.