A New LGBTQ Workforce Has Arrived—Inclusive Cultures Must Follow
THE DIVERSITY AND INCLUSION IMPERATIVE
Today’s LGBTQ workforce has undergone a fundamental, generational shift, both in how it defines itself and what it expects of workplace inclusion. The LGBTQ workforce is far more racially diverse and more likely to include women, transgender employees, and people with more varied sexual orientations than in the past, particularly among younger generations. Of LGBTQ employees under age 35, 28% are people of color who identify as women, versus just 2% of those aged 55 or older. Consequently, the diversity, equity, and inclusion programs in place at many companies, while beneficial, are no longer sufficient.
Together, BCG and New York City’s Lesbian, Gay, Bisexual & Transgender Community Center, a nonprofit service and advocacy organization, surveyed 2,000 LGBTQ employees and 2,000 non-LGBTQ (straight) employees across the US. The goal was to understand the experiences of today’s LGBTQ workforce and how companies can create more inclusive workplaces. The results show that despite significant investment and decades of hard work, organizations still need to do more. Consider that 40% of LGBTQ employees are closeted at work and 75% have reported experiencing negative day-to-day workplace interactions related to their LGBTQ identity in the past year.
Diversity and inclusion (D&I) leaders must focus on culture change in order to improve employees’ interactions with colleagues, direct managers, and leadership—what we call the “1,000 daily touch points.” Negative touch points are costly: employees who experience more negative touch points are 40% less productive and 13 times more likely to quit a job.
The evolving makeup of the LGBTQ workforce and its multifaceted composition present challenges to changing organizational culture—but in this complexity lies the solution. Future D&I efforts aimed at LGBTQ employees must acknowledge multiple personal attributes in addition to sexual orientation and gender identity. Demographic factors (like race, generation, and immigrant status) and life factors (such as caretaker status, religiousness, managerial level, and income) mean that each LGBTQ employee has a different life experience. Successful culture change will take a “segment of one” lens to acknowledge each employee’s unique life context and needs. This is a new approach for many US companies but one that is critical to create truly inclusive workplaces.
Moreover, it is not just LGBTQ employees who are attuned to an organization’s culture. Straight Gen-Z and millennial employees—who will soon make up the majority of the workforce—also care deeply about inclusion and are more likely to advocate for it than previous generations. In that light, there are clear benefits for companies that get it right: improved financial performance, stronger innovation, less attrition, and a more engaged workforce.
The confluence of current events amplifies the urgency for an updated approach to D&I. COVID-19 and the associated economic downturn disproportionately affect the health, wellness, employment, and economic security of people of color, women, caretakers, part-time workers, employees with physical and mental health conditions, and employees with nontraditional family arrangements. The recent demonstrations for racial equity acutely amplify structural biases impacting people of color’s health, wellness, and ability to “show up” at work. These identities cut across the LGBTQ workforce and reinforce the need to take a segment-of-one lens to D&I strategy. Short-sighted organizations will stay silent or double down on old approaches. Organizations should use this moment as an opportunity, however, to invest in new tools in order to create organization-wide accountability, redesign working models, and change cultures to become more inclusive and accessible.
NOTEWORTHY PROGRESS, BUT FAR MORE IMPROVEMENT IS NEEDED
LGBTQ rights have advanced dramatically over the past 20 years, and much of corporate America has been central in shaping public opinion and boosting LGBTQ diversity in the workplace. The bulk of these efforts have been focused on developing equitable HR policies and benefits and setting up employee resource groups (ERGs). These actions have generated positive results: according to the 2020 edition of Human Rights Campaign’s annual Corporate Equality Index, 65% of all companies evaluated have a perfect score of 100. Among large companies, the numbers look even better: the average score for Fortune 500 companies that participated is 90%. All these companies have nondiscrimination policies in place regarding sexual orientation and nearly all (98%) regarding gender identity. Moreover, 91% have made public commitments to the LGBTQ community and 88% have trans-inclusive benefits.
This is meaningful progress compared with a generation ago. Yet despite these efforts, the unavoidable fact is that most LGBTQ employees do not feel truly included in the workplace.
In March 2020, we partnered with an experienced practitioner of inclusion and community building, NYC’s LGBT Community Center, to survey more than 2,000 LGBTQ and 2,000 straight employees working in the US across industries and company sizes. (Some transgender people can identify as straight, but for the purposes of this discussion we are using the general term “straight” to refer to non-LGBTQ employees.)
The dissatisfaction among LGBTQ respondents with the current state of LGBTQ inclusion is clear:
40% of LGBTQ employees are not out at work, and 26% of these individuals wish they could be out.
36% of out employees have lied or “covered” parts of their identities at work in the past year.
54% of employees who are out at work remain closeted to their clients and customers.
Worst of all, 75% reported experiencing at least one negative interaction related to their LGBTQ identity at work in the past year, with 41% experiencing more than ten types of such interactions.
A key issue is that the earliest D&I initiatives were aimed at establishing antidiscrimination and nonretaliation policies. Subsequent efforts that focused on benefits parity, ERGs, and recruiting processes were designed to level the playing field. These programs tended to cover formal interactions but did not address daily, informal interactions. Nor were they meant to activate the entire workforce around inclusion. In that way, those policies and initiatives were critical but are no longer enough to create an inclusive workplace or change the behaviors and biases of majority groups.
Despite meaningful progress in some areas, the unavoidable fact is that most LGBTQ employees do not feel truly included in the workplace.
Additionally, ERGs, though helpful, have tended to have a disproportionally high number of gay, white men, who in the 1990s and early 2000s were the most visible out cohort among the LGBTQ workforce. Today, some ERGs have yet to adapt to the LGBTQ workforce’s changing makeup and address its biggest challenges. (See “Employee Resource Groups Must Evolve to Continue Championing Progress.”) If companies are to create more inclusive cultures, they need to understand how the makeup of the LGBTQ workforce is evolving and the unique challenges these employees face.
TWO IMPORTANT GENERATIONAL SHIFTS
Our research identified two central trends. First, the makeup of the LGBTQ workforce has changed dramatically, highlighting the need to evolve traditional approaches to D&I. Second, young straight employees are increasingly attuned to LGBTQ issues, signaling a much larger audience who cares about inclusion.
Our survey found that LGBTQ employees account for a larger share of the overall workforce. That stems from a significant rise in the number of women identifying as LGBTQ (along with a smaller increase in men identifying as LGBTQ). Among all respondents, 54% of LGBTQ employees are women. And that trend is even more pronounced among younger respondents: women make up 71% of the LGBTQ population aged 25 to 34 and 78% of those aged 18 to 24.
Today’s younger LGBTQ workforce is more racially diverse than older LGBTQ cohorts, too. The majority of those aged 18 to 24 are nonwhite (53%), versus just 7% of those aged 55 or older. Similarly, 34% of the Gen-Z LGBTQ workforce is Hispanic, while only 5% of those 55 or older are Hispanic. That trend is likely to continue as the workforce becomes more ethnically diverse with each successive generation.
In addition, young straight employees also care more deeply about inclusion than their older straight colleagues. Straight employees under 35 (Gen-Z and millennials) are 1.6 times more likely to know LGBTQ colleagues, 3.6 times more likely to join ally programs (where available), and 3.0 times more likely to find value in their LGBTQ colleagues being out, compared with older non-LGBTQ employees. Straight Gen-Z and millennial workers are also significantly more likely to recognize discriminatory comments and actions against their LGBTQ colleagues. Young employees—the future of the workforce—are both watching and making career decisions on the basis of culture, including LGBTQ inclusion.
A NEW APPROACH GROUNDED IN INTERSECTIONALITY
As the survey results show, the LGBTQ workforce is not a static or monolithic group with a single set of experiences and needs. But many organizations still categorize LGBTQ employees as a siloed cohort when crafting their D&I strategies. As a result, the needs of large portions of a company’s LGBTQ workforce are underrepresented, and these people do not feel included.
Instead, we believe effective D&I strategies must be grounded in intersectionality—the independent and overlapping social categorizations that can amplify discrimination and disadvantage. In addition to sexual orientation, gender identity, and race, our research uncovered a set of contextual factors that cause distinct experiences for LGBTQ people. The following factors and life stages cause the most statistically differentiated needs among LGBTQ employees: their generation, caretaker status, and “religiousness” (how important religion is to them). Other important identities are their managerial level, income, employment tenure, location (urban versus nonurban), and immigration status. When crafting D&I strategy, organizations need to consider each of these identities and all the permutations of how they may overlap for an individual—what we call a “segment of one” lens to D&I.
This approach may seem complex, but it is necessary to unlock inclusion and can be scalable if the right tool kit is deployed. It does not require creating countless subgroups for each possible intersection or tailoring HR policies. Rather, D&I leaders and ERGs should equip their work-forces with a fluency in intersectionality, helping them understand all the possible contextual life factors of their LGBTQ colleagues and the experiences these unique identities create.
WHERE CULTURE BREAKS DOWN
Applying a segment-of-one lens to D&I requires that leaders shift their focus from policies to culture in order to address an employee’s 1,000 daily touch points. “It’s not the benefits, conferences, and ERGs that drive differentiated outcomes,” said the chief marketing officer of a global professional-services company interviewed during this work. “It’s the employee’s everyday touch points.”
Our research shows that breakdowns in these touch points are a major barrier to inclusion. These breakdowns are comments or actions that highlight prejudice, demonstrate a lack of empathy, or make an individual or group feel isolated or unwelcome. Among survey respondents, 75% of LGBTQ employees experienced at least one such comment or action in the past year at work, and 41% experienced more than ten. These encounters stymie the feeling of inclusion.
With so many companies making commitments to diversity and working to build robust D&I policies and programs, why do these experiences continue to occur? We believe they persist because most employees do not understand all the potential dimensions of their colleagues’ identities. This leads to inaccurate or insensitive beliefs, actions, and comments (for example, assuming LGBTQ colleagues do not want children or discouraging LGBTQ colleagues from leading a client meeting because they lack “presence”).
Comments like these are universally hurtful but resonate with LGBTQ people differently according to their unique identities. For example, we asked LGBTQ employees whether a colleague had ever assumed their family structure or parenthood status because of their LGBTQ identity (making a comment such as “Gay people do not have kids, right?”). More than twice as many LGBTQ parents reported experiencing such an incident (55%) as did LGBTQ non-parents (26%). This difference in reported exposure likely occurs because comments dismissing LGBTQ parenthood do not resonate as deeply with nonparents. If parenthood is not part of their identity, they are less attuned.
Employees who experience more discrimination are less innovative, less productive, and less empowered.
Another example: some LGBTQ people in the workforce must deal with colleagues who passively refrain from networking with them. Yet the prevalence varies by seniority level. Only 16% of nonmanagers reported experiencing this versus 35% of junior managers and 50% of senior managers. Similarly, 55% of religious LGBTQ employees have had colleagues discuss religious views on LGBTQ issues, whereas only 31% of nonreligious LGBTQ employees reported experiencing this. The types of negative experiences that most resonate with an employee highly depend on that employee’s holistic identity.
Creating an inclusive workforce requires addressing these breakdowns. But only 43% of straight employees reported witnessing this type of off-hand discrimination at work in the past year. Similar to the difference in awareness between LGBTQ groups, the lower awareness among straight employees suggests not that these events are not happening but that they are simply not noticed by the majority. Worse, only 34% of straight employees always intervene when they see such an encounter, leaving LGBTQ employees often unsupported.
The challenge is real. Culture change is difficult, and many of these breakdowns can be addressed only through an intersectional lens. Moving beyond a monolithic view of the LGBTQ community requires new tools to increase awareness, modify norms, and implement enforcement mechanisms in order to embed these changes.