Sector News

Being transgender at work

December 19, 2021
Diversity & Inclusion

Although corporate America has stepped up its public support of LGBTQ+ rights, it still has a long road ahead to foster a truly inclusive environment for transgender employees.

In 2014, Time magazine splashed a glamorous photo of the actress Laverne Cox on its cover, with a headline announcing that society had reached “The Transgender Tipping Point” at last. “Transgender people,” the article proudly declared, “are emerging from the margins to fight for an equal place in society. This new transparency is improving the lives of a long misunderstood minority and beginning to yield new policies, as trans activists and their supporters push for changes in schools, hospitals, workplaces, prisons, and the military.”

To be sure, the Time cover story, seven years ago, was a watershed moment for the visibility of transgender women and men in the mass media. But that hasn’t translated into actual improvements for the transgender experience in the United States—despite the long-standing struggle for comprehensive LGBTQ+ rights. As we will show, being transgender today often means facing not only stigma but also increasing threats to safety and existence, whether it’s record-high levels of deadly violence or a higher-than-typical likelihood of encountering employment or housing discrimination.

The challenges of being transgender extend to the workplace. In recent years, there have been fits and starts for the advancement of LGBTQ+ rights at work in the United States—including an executive order President Biden signed in January, implementing a landmark 2020 Supreme Court ruling that protected LGBTQ+ people from workplace discrimination. But those efforts can face roadblocks. Moreover, some employers focus more on supporting sexual-orientation diversity in the workplace than on gender identity or expression. All too frequently, the transgender experience may not even register on the radars of employers when they work on corporate diversity, equity, and inclusion efforts.

To better understand the uniqueness of the current transgender experience, and to add to a sparse but growing body of analysis about this community, we conducted research that provides new insights into the participation, plight, and precarity of transgender people at work. Using both primary and secondary sources, we built on last year’s McKinsey article on the LGBTQ+ experience in the workplace, on last year’s Harvard Business Review study about creating a trans-inclusive workplace, and on this year’s report from the UCLA School of Law’s Williams Institute on LGBT people’s experience of workplace discrimination and harassment. We also leveraged previous McKinsey studies on the workplace, analyzed government data, and conducted our own survey and interviews (see sidebar “About the research”).

Our findings, which focus on the United States, include the following:

  • Transgender adults are twice as likely as cisgender adults to be unemployed.
  • Cisgender employees make 32 percent more money a year than transgender employees, even when the latter have similar or higher education levels.
  • More than half of transgender employees say they are not comfortable being out at work. Two-thirds remain in the closet in professional interactions outside their own companies.
  • People who identify as transgender feel far less supported in the workplace than their cisgender colleagues do. They report that it’s more difficult to understand workplace culture and benefits, and harder to get promoted. They also feel less supported by their managers.
  • Greater transgender inclusion in the workforce would benefit everyone. A concerted effort to increase employment and wage equity for transgender people could boost annual consumer spending by $12 billion a year.

Given the more than 2.0 million transgender people in the United States, and the 1.2 million people who identify as nonbinary, employers cannot continue to ignore a significant population that experiences systemic barriers to employment, work performance, and career progression. We identify steps companies can take to explore policy options that explicitly focus on employees across the gender spectrum. Our suggestions are not comprehensive but are meant as a starting point for change. This is the first time McKinsey has published on the transgender experience. Over time, we hope to further develop our research in this area, and we welcome feedback and dialogue to learn from our readers. READ MORE

By David Baboolall (they/them), Sarah Greenberg (she/her), Maurice Obeid (he/him), and Jill Zucker (she/her)


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