The Wall Street Journal - 28.10.2019

THE WALL STREET JOURNAL. Monday, October 28, 2019 |R13

JOURNAL REPORTS | DIVERSITY & INCLUSION

BYMAITANESARDON

BYDIETERHOLGER

Starbucks eases health costs

for transgender workers

FROM TOP: JOVELLE TAMAYO FOR THE WALL STREET JOURNAL; LAURA BUCKMAN FOR THE WALL STREET JOURNAL

Some

people pay

as much as

$200K

for sex-

reassignment

surgery and

related

cosmetic

procedures.

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PEPSICO LOOKS TO THE MILITARY

Before landing her first job managing a Frito-

Lay factory that churned out Cheetos and Fu-

nyuns, Toby Johnson flew an Apache helicopter

during the invasion of Iraq.

“It’s kind of crazy because I really had no

background running a plant,” she says.

What she had were leadership skills from

the military that Frito-Lay’s parent,PepsiCo

Inc., actively seeks out. This year, the Purchase

N.Y.-based food-and-beverage titan has hired

more than 1,200 veterans in the U.S. That is up

from nearly 1,000 last year, bringing the total

number of former service members working for

PepsiCo in the U.S. to more than 4,500, or

roughly 4% of its domestic workforce. The vet-

erans hiring groups RecruitMilitary and Mili-

tary Friendly have recognized the company as

one of the best for bringing on former service

members.

In Iraq, Ms. Johnson, who is now 43, was

part of the initial invasion force and traveled

more than 400 miles across the desert to set up

a base of operations at Baghdad International

Airport. She served nearly a year in Iraq, then

finished her service back in the U.S. in 2005.

She would go on to study at Harvard Busi-

ness School, where she scored a summer intern-

ship with PepsiCo that led to her first job man-

aging a factory for the company’s subsidiary

Frito-Lay Inc. in Williamsport, Pa.

For the past 12 years, Ms. Johnson has

worked in multiple divisions and is currently

back at Frito-Lay as vice president of sales op-

erations. She is also one of the founders of

Valor, PepsiCo’s employee group for veterans,

which started in 2010. “Veterans don’t want to

be seen as zoo animals,” she says. “They want

to be seen just like a regular person.”

Veterans know how to think on their feet

and balance the needs of teammates, while

accomplishing the mission, which are traits

that lend themselves well to leadership suc-

cess in the business world, says Jim Farrell,

senior vice president of operations at PepsiCo

beverages and a former U.S. Army officer of

more than five years himself. He says compa-

nies should dismiss stereotypes about veter-

ans blindly following orders.

“I think there might be a perception out

there that in the military it’s very almost like

robotic,” Mr. Farrell says. “That couldn’t be

further from the truth.”

Veterans also offer companies

a diverse pool of talent, one that

is expected to get even more di-

verse in coming years. By 2037,

roughly 33% of veterans in the

U.S. will be ethnic minorities,

compared with 25% now, the U.S.

Department of Veterans Affairs

estimates. The number of male

veterans is expected to decline

34% by 2037, while the share of

female veterans is projected to

rise by 13%.

“You have people of color, you

have women, pretty much every

ethnic group you can think of is

represented among veterans,” Ms.

Johnson says.

PepsiCo has had a long history

of hiring veterans. At least four of

its chief executives have been ex-

military, including Don Kendall, who was a

Navy pilot in World War II and became the

first CEO after Pepsi-Cola Co. merged with

Frito-Lay to form PepsiCo in the mid-1960s.

As such, executives were at a loss for why

they hadn’t formed a group for veteran em-

ployees sooner, says the 48-year-old Mr. Far-

rell, who was stationed in Germany and de-

ployed to Bosnia and Herzegovina as part of

a peacekeeping mission in 1995.

As many as 245,000 veterans leave the mil-

itary every year, and the transition to civilian

life can be difficult due to the mental and

physical toll war can take, according to Brown

University’s Watson Institute for International

and Public Affairs.

Mr. Farrell says PepsiCo’s veterans group

helps its members ease back into civilian life

and provides mentorship. It regularly hosts

outside events, including a recent baby shower

for 40 military moms. When the Navy comes

to New York City for Fleet Week, the company

sends busloads of employees to serve lunch to

the sailors and speak with them.

“You’re going to be less likely to want to

leave the company because you got all these

great relationships that you’ve built,” Mr.

Farrell says.

S

even years ago, Tate Buhrmester

made the decision to come out as

transgender while working as a super-

visor at aStarbucksCorp. store in

Austin, Texas.

“When I came out at work, I told

my Starbucks partners [as the company calls its

employees] to call me by my new name, Tate, and

they were very accepting,” he says. “I never had

any problems.”

Two things eased Mr. Buhrmester’s transition:

being able to choose his preferred pronouns and

name, and being covered by the Seattle-based cof-

fee chain’s medical benefits.

Transitioning can be pricey for individuals who

identify with a gender other than the one listed

on their birth certificate, as many medical plans

don’t cover all of the procedures that are available

to complete the process. The cost of such surger-

ies can add up quickly, with some people paying

as much as $200,000 for sex-reassignment sur-

gery and related cosmetic procedures, according

to the World Professional Association for Trans-

gender Health, or WPATH.

That can lead transgender people to screen out

certain companies when looking for a job.

“I know a financial adviser who decided to join

Starbucks because the old employer didn’t cover

any surgery,” says the 35-year-old Mr. Buhrmester.

Under the Affordable Care Act, which prohibits sex

discrimination by health providers and insurance com-

panies, company health plans in the U.S. can’t specifi-

cally exclude transition-related care. But the ACA’s es-

sential benefits also don’t include a list of procedures

that health plans must cover. That means many trans-

gender workers still pay for a good portion of transi-

tion-related medical expenses out of their own pockets.

That isn’t the case at Starbucks, however, which in

2018 began offering one of the most comprehensive

health-benefits packages for transgender workers in the

U.S. The company, which has been covering sex-reas-

signment surgery since 2012, decided to expand cover-

age in 2018 to include transition-related procedures that

are considered cosmetic, such as breast reduction or

augmentation surgery, facial feminization, voice therapy

and hormonal therapy.

Starbucks consulted with WPATH when deciding

which extended benefits to offer.

The organization gave Starbucks a

list of transgender care it should in-

clude and highlighted the benefits

many insurance companies exclude

because they don’t consider them

medically necessary.

“The WPATH told us we were the

first company in the world to ask

them to help translate their recom-

mended standards of care into a

medical benefits policy,’’ says Ron

Crawford, vice president of benefits

at Starbucks.

Starbucks decided to include pro-

cedures that many companies see as

cosmetic after experts and trans-

gender people told them these are

“essential to becoming who they

needtobe,”saysMr.Crawford.

Experts say cosmetic procedures

can help transgender people over-

come gender dysphoria—the dis-

comfort people may feel when there

is a conflict between their birth

gender and the gender with which

they identify.

“After I came out and transi-

tioned, everything in my life started

to align with how I felt. I’ve also

been more confident since then,”

says Mr. Buhrmester.

Starbucks says the main driver

behind its decision to offer such

comprehensive benefits stems from

its desire to attract great talent that

is as diverse as the communities it

serves. According to a survey con-

ducted by Deloitte, companies that

embrace inclusion are more likely to

attract and retain workers, which is

critical in an economy where com-

petition for talent is fierce.

“We know that by investing in

our partners, we are investing in the

strength of the business,” says Lucy

Lee Helm, Starbucks’ executive vice

president and chief partner officer.

Mr. Buhrmester says working in

an inclusive company is one reason

he has been at Starbucks for 15 years.

“I am not very close to my fam-

ily, so having the support of my

workplace has made a difference,”

says Mr. Buhrmester. “The fact that

I am trans hasn’t overshadowed

people’s general perception of me.”

Employees in Transition Welcome

Toby Johnson, from helicopter pilot in Iraq to VP.

‘After I came out and transitioned, everything in my life started to align with how I felt,’ says Tate Buhrmester, a Starbucks employee.