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August 01, 2021

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Sourcing diversity in the travel supply chain

By Elizabeth West, Business Travel News

Sourcing diverse preferred suppliers for managed travel isn’t a new idea. What is new, according to a number of travel buyers and suppliers, is the authenticity in the effort to make it happen.

Rising awareness among business leaders of systemic racism and the personal, social and economic challenges faced by racial minorities and LGBTQ+, disabled and other marginalized communities has led companies to reassess their commitment to diversity in their sourcing practices—and that includes travel.

About 32 percent of travel buyers surveyed in BTN’s 2020 State of the Industry Report said race, equity and inclusion issues would shape the way they configured their programs as the industry emerges from its pandemic-induced shutdown.

"We’ve fielded diversity questions in [requests for proposals] for years," Southwest Airlines senior director of B2B strategy and services Rob Brown said during a recent BTN Group diversity, equity and inclusion-focused virtual conference. But, he added, the most recent conversations have had a different tenor. "[They aren’t] just checking a box. They are more sustainable and have [the] shelf life to drive real change."

The Travel and Meetings Society, a group originally formed in the wake of the Covid-19 crisis to serve as a leadership organization to guide buyers and suppliers back into business travel with new industry standards, established a diversity, equity and inclusion committee early. The co-chair of the TAMS committee, Fidelity International director of global travel, meetings and ground transportation Carol Fergus, also serves on the more recently formed DE&I committee of the Global Business Travel Association.

In an interview with Travel Procurement portfolio mate BTN late last year, Fergus identified diverse sourcing as a key lever in driving more diversity through the managed travel industry. "[You have to] ask suppliers the questions, look at recruitment and training programs and look beyond the security manager and the front desk reception and the [server at the] café," she said. "You have to look into offices and [at] the sales teams and executives. Don’t tell me the company is diverse until I can see those levels of the company." Plus, she added, the onus is on travel buyers to expand the scope of their procurement efforts to include diverse companies when they can and support the development of diverse candidates.

"We need to take the time to see those potential partners and figure out where they fit into the mix," she said. "It’s not about awarding business just because they fit a certain profile but opening up the search to those who might not obviously be a fit but then vetting them on a level playing field given what they bring to the table."

Why Diversify Travel?

According to a June 2020 Harvard Business Review report, diverse supply chains "broaden the pool of potential suppliers and promote competition in the supply base, which can improve product quality and drive down costs." The report also suggested that supply chain diversity offers businesses more agility, with diverse organizations ready to pivot quickly in uncertain times.

For business travel, however, much of what is delivered by partners goes beyond product and into service, and how business travelers are treated while representing their organizations away from the home office.

During the BTN Group’s recent symposium series on DE&I in business travel, a number of businesses travelers who identify as Black, Asian-American, LGBTQ+ or have physical or mental disabilities discussed negative experiences—including a lack of physical access to products and services and concerns about their personal safety—while traveling on business. The audience heard from Black travelers who were questioned about sitting in their premium-class airline seats, meeting attendees who were challenged to access buffet-style meals during all-day conferences and LGBTQ+ travelers who were publicly embarrassed by hotel front desk employees. Sourcing diversity at the highest levels of an organization and ensuring preferred suppliers have a diversity strategy that cascades from the top all the way down to frontline workers can help mitigate product and service delivery issues and better support the travelers who drive business and revenue to their organizations.

Finding this in travel supplier partners is critical because the workforce, in general, only is getting more diverse.

In 2020, 37 percent of working-age adults identified as minorities, according to a study by startup and technology company recruitment specialist BuiltIn. What’s more, by 2044 groups traditionally seen as ‘minorities will reach majority status in the U.S. population, a shift that also will impact diversity in the workplace.

But the discussion of diversity in the workplace—and the need to shift the travel-buying mindset to contemplate these issues—needs to happen now if companies want to win the best employees and support them while on the road.

In a 2020 survey from Glassdoor, 76 percent of job seekers said a diverse workforce is an important factor when evaluating companies and job offers. An LGBTQ+ employee posted on Facebook that he had long scrutinized employee handbooks and companies’ financial support for political, social and religious organizations to understand how working for a particular employer would support his day-to-day well-being, since his local political and social environment did not feature strong advocacy for LGBTQ+ equality. Seventy[1]nine percent of LGBTQ+ job seekers had similar strategies, according to Glassdoor. Eighty percent of Black and Hispanic job seekers said diverse workforces were an important factor when evaluating companies and job offers. These are people and dynamics travel buyers need to consider when partnering with suppliers.

How to Diversify Travel Sourcing

Shaka Senghor is the head of diversity, equality and inclusion for TMC platform TripActions. He talked to a BTN Group audience in June about the company’s culture of diversity. "It’s really a top-down approach. Having executive buy-in and lean-in is really important," he said. "To really do an effective job at DE&I and make sure that people are included and make sure that things are distributed equitably, you have to be proximate to your customers. You have to be proximate to the communities you serve and the communities you care about, as well as the issues. We provide services, traveling experiences. And it affects a broad swath of diverse users, each of whom may feel differently or even vulnerable in traveling to new locations."

Senghor said one issue TripActions recently has considered was the requirement for business travelers to sometimes front their own money for a business trip. For some travelers, in some communities, that is a hardship that could hold them back from job advancement. It’s a challenge that the global pandemic exacerbated in some communities, in particular, he said, and one that TripActions wants to help eliminate.

"The global pandemic really revealed a lot of things to us and one of those things was that as a global community, we’re all in the same storm, but not all of us are in the same boat," he said. These are the types of insights that diverse leadership and diverse suppliers can bring to the table, and the travel supplier community is taking note. In recent months, major suppliers like American Airlines, Delta Air Lines and JetBlue have named chief diversity officers or chief ‘people’ officers for their companies—a move that signals each company’s commitment to this issue.

Ellen Moens, senior manager of administration at humanitarian organization Care, said the existence of that type of senior role is one of the criteria she currently uses in RFPs to understand the intentionality behind diversity efforts within travel supplier candidates. She also asks about employee training around diversity and inclusion, including employees with managerial responsibilities, and asks each supplier to share "demonstrable commitments to principles of diversity, inclusion and community involvement."

Southwest’s Brown said a lot of the current conversation with corporate clients around diversity and inclusion centers on this kind of cultural alignment and intentionality between partners. "A company may have an initiative and a goal they would like to move forward with [and] they want to partner with an airline or maybe even other partners in the travel space that align with those objectives … because this is the way to make real change … and not just check a box."

Visa corporate travel manager for the Americas Frankie Crisostomo considers the value of those types of questions and alignments when vetting suppliers, but also digs into the diversity of her suppliers’ supply chains —in what is considered a tier-two sourcing strategy. "We actively follow a … tier-two initiative with the goal to increase opportunities for diverse suppliers," she said. "We ask our tier-two suppliers to provide metrics around who they work with in terms of diverse suppliers."

A number of travel suppliers have supplier diversity strategies. Avis Budget Group is among an elite group of companies on the Billion Dollar Roundtable, which requires $1 billion in annual spend with diverse suppliers to qualify as a candidate. United Airlines senior supplier diversity business management lead Rona Fourte acknowledged the importance of this type of supplier vetting for corporate travel buyers. In terms of United’s efforts, she said the airline has diversity language in all contracts with its own suppliers, but when critical suppliers don’t meet those criteria, United takes the time to educate them and push them toward more diversity practices—and that includes vetting the candidates own supply chain. "We walk the non-diverse suppliers through completion of a participation plan so we can access the flow-down criteria and how they’re measuring their supply chain as well for DEI and inclusive practices," she said.

Getting More Strategic

A tier-two strategy, which recognizes diversity in a partner supply chain, is predicated on the universe of certified diverse suppliers. The United States recognizes 10 categories of minority and women-owned business certifications. These designations offer travel buyers a good place to start their search for direct supplier candidates that might fit their travel purchasing requirements. Some major players in corporate travel, like women-owned business enterprises Omega World Travel and ATG, are among them. Others, however, like Dallas-based Campbell Travel always has been veteran-owned, but never applied for certification. President Teri Goins said she is currently exploring how to become certified.

Anitra King, who directs global supplier performance and innovation—including diverse sourcing innovation—for Discovery also spoke at a recent DE&I conference hosted by the BTN Group. She emphasized the importance of certification as "a really important goal for diverse companies" and as a tool that provides context and authentication for diverse sourcing efforts out of the gate. But, she said, the unique situation of diverse suppliers—often, they are smaller and have more limited resources—may limit the bandwidth needed to get that certification. As part of her innovation strategy for Discovery, King casts the sourcing net wider, allowing candidates to self-declare diversity even if they are not certified.

"As we're taking in prospective suppliers, we just ask the question, 'Do you identify as diverse based on the U.S. definition?'" she said, adding that the company now is focused on the U.S. but is looking at designations in many of their markets to roll out similar programs. "We want to encourage [these companies] to engage with us, because even if you don’t have a certification, Discovery might be able to help get that certification, whether it's a matter of finances or a matter of time or just understanding the process of acquiring a certification."

King, who previously procured travel for Honeywell and Advanced Micro Devices, said the collaboration piece of Discovery’s sourcing program is key. "It’s not just what the supplier can do for us but also what we can do for the supplier. We use the same approach for any category, so travel is the same. We like to include diverse voices at the table … and open the door for different life experiences, business experiences and ideas."

Ethical & Other Challenges

Getting leadership buy-in is always critical to success. Travel buyers should look for diversity leadership within their own companies and go to them for advice on first steps or to access existing diversity and procurement structures that may not be known to them but could motivate senior executives to move toward incremental improvement in travel sourcing diversity.

It might not be easy, said PredictX vice president of customer success Maria Chevalier, who formerly managed travel for Johnson & Johnson, which long has held a seat on the Billion Dollar Roundtable.

"There’s so much that needs to be done to help small businesses and diverse businesses get in the door. They cannot compete with large-cap companies on price," she said. "But if you look at economic and job growth over the last several years, it came from these segments. So not only should we do this because it’s the right thing to do … but also it is the heartbeat of driving economic growth."

According to the U.S. Census Bureau’s 2016 Annual Survey of Entrepreneurs, there are 1.05 million U.S. minority-owned businesses, employing 8.7 million workers. The National Minority Supplier Diversity Council estimates minority-owned businesses generate $400 billion in annual economic output and $49 billion in annual tax revenue. Recognition in elite membership groups like the Billion Dollar Roundtable could motivate large companies to do more.

Chevalier warned about unethical practices from companies shooting for diversity metrics as a status symbol. She cited—but did not name—companies that tried to leverage all the travel spend through diverse-owned TMCs as part of their spending with women- and minority-owned businesses, when only charges and fees imposed by such a TMC would qualify as diverse spend. "There’s a right way and a not-so-right way to achieve [recognition], so it starts with looking at company culture and priorities. If you look at their senior leadership team and they all look the same, I think you have the answer to your question," she advised.

The diversity sourcing panel at the BTN Group DE&I event agreed, however, that times are changing when it comes to motivations around diverse spending.

"From my perspective being in or around diversity procurement for the last 25 years, the new spotlight on it feels much more authentic. It feels like organization are finally getting the message and they want to create programs for the right reasons," said King. "For Discovery, diversity procurement was always part of our plan, but about a year ago, we got a really big boost [in terms of social awareness around these issues]. We said to ourselves, 'Let’s reimagine this program.' It’s not just about collecting data points and spin numbers. It’s not about certificates our executives might be hoping for. This is really about doing the work and making a difference."

To learn more about Business Travel News, visit www.businesstravelnews.com.