Is travel procurement converting on DE&I?

For the first time in more than two years, many travel managers are expecting a travel bidding-and-sourcing cycle that looks something like pre-pandemic processes, with annual requests for proposals (RFPs), supplier negotiations and performance-based contracts.

For some, though, the slowdown in business travel caused by Covid-19 afforded them the opportunity to reshape their procurement process with an eye on diversity and inclusion, with deeper and more detailed assessments of suppliers' diversity initiatives, the make-up of their management teams and their supply chains and the relationship with their business travellers.

It's a strategy with as many goals as approaches. Some companies find it sufficient to gear a certain percentage of their travel volume to women- or minority-owned suppliers. Others, especially large companies, are approaching travel procurement as part of a company-wide procurement strategy that assesses would-be supplier partners in all facets of industry, with executives dedicated to diversity efforts heavily involved in the sourcing process. Still others – maybe even a slight majority, if the results of a recent BTN survey are reflective – aren't yet doing much of anything on this front.

As such, assessing diversity, equity and inclusion efforts within travel procurement processes can be a bit of a moving target, as there remains wide variance among companies not only in goals and technique but also intention. Still, there seems to be a level of industry consensus that those efforts have gained momentum in many companies during the pandemic and in the wake of the 2020 protests after the death of George Floyd, and in many cases those efforts have gained sophistication and rigour.

When Covid-19 hamstrung business travel, "it got quiet, and when things get quiet, other things get louder," said Susan Lichtenstein, senior vice president of global travel strategies for Partnership Travel Consulting and a founder of the Travel and Meetings Society, an industry task force that examined diversity issues, among others.

"When it got quieter in the travel field, the social voices rose up, including in our industry," Lichtenstein said, noting TAMS' efforts coincided with the Floyd protests. "And this gave companies an opportunity to look at other things in their companies. Like, what are we doing? How are we doing? Because those opportunities started to rise up, those conversations are now changing."

Some of those changes are impacting travel sourcing strategies. According to our April survey of 163 business travel buyers, about 59 per cent agreed or strongly agreed that their organisation considers potential partners' DEI initiatives when considering doing business with them. TCG Consulting managing director Desiree French said her experience is roughly similar, and though some clients look to apply basic diversity and procurement principles to the process – determining travel suppliers that can be classified as woman- or minority-owned, questioning suppliers in RFPs, and deploying mechanisms to track and collate their answers – others have taken the next steps to a more sophisticated process.

"Some of them will have kind of a standard question," French said, but others have progressed to asking questions that reflect deeper relationships with suppliers on the topic. "How are you promoting [diversity efforts] within? How will you partner with us to promote it? If we're truly going into a partnership, how are we going to manage it together?"

French cited one client who during the sourcing process requested one supplier to partner with the organisation on an internal week-long DE&I event for employees. "One got involved with them and came to their corporation… and talked about what they're doing and how they're handling their customers when they're coming on board. They literally went and took the time and attended this event to promote it within the client organisation as well."

Taking new steps

Still, most respondents to BTN's survey said their organisations haven't taken steps to help ensure a diverse supplier base. When asked if their organisations work to ensure that a certain percentage of travel supplier partners are owned by women, people of color and/or marginalised individuals, 51 per cent said they didn't. About 28 per cent said they did, and another 12 per cent offered an open-ended answer, some noting future plans to do so, others noting efforts outside of a specific percentage, but some made clear they had no intention of doing so.

But the tides may be changing, regardless of the latter group's efforts. "We have seen a large increase in both the number of questions we're asked around diversity and inclusion as part of the TMC RFP process as well as the types of questions and the topics within D&I that they address," said BCD Travel senior vice president of diversity & inclusion Yvette Bryan. "This is also starting to become a consideration as part of the sourcing process for supplier programmes too."

UK-based Diversity Travel, which supports the travel needs of organisations in the not-for-profit and academic sectors, says that it was fielding RFP questions around DE&I ten years ago – including enquiries about ethnic and gender diversity in its workforce – but has noted an increase in recent RFPs "from typically one or two questions to five to ten based on the size and scope of the organisation," said the TMC's sales director David Coe. "We were recently asked during one RFP to deliver a standalone presentation on DE&I as part of the overall RFP process," he added.

Among its internal measures are an anonymous annual staff survey to gauge employees' feeling around DE&I and regular unconscious bias training. It also reports annually on its gender pay gap – although not a requirement for a business of its size – and has a 50 per cent female shortlist policy for senior roles.

Diversity's managing director Christopher Airey said customers also ask about the TMC's supply chain and "what we're doing to ensure it reflects our values, ethics and DE&I strategy".

Enterprise's AVP of European business rental, Adrian Bewley, said the car rental company saw DE&I emerge in RFPs over a decade ago and that DE&I questions are "now now often a standard part of every RFP process across all sectors and countries".

He said the increased focus helps companies identify business partners that share their values "which we think is critical and something we welcome. Businesses want to know that they have a supplier partner for the long term, with values and ethics that are aligned."

American Express Global Business Travel reports an uptick in DEI questions since 2020. "Following the death of George Floyd and subsequent social injustice movement, we’ve experienced a significant increase in enquiries related to our DE&I philosophy, goals and
representation of diverse talent across all levels of the company," said Tonya Hempstead, the TMC's vice president of DEI.

Internally, Hempstead says the TMC has reevaluated its supplier diversity programme and increased its goal of utilising diverse suppliers across the strategic sourcing portfolio from four per cent to ten per cent by 2030. 

For corporates, turning intentions and questions into decisions and actions can be a big step. While about 41 per cent of respondents to BTN's survey indicated that their organisations do assess would-be suppliers' DE&I stances in RFPs – 44 per cent said they do not and the rest didn't know – only a fraction of them indicated that information could serve as disqualifying or affirming to the supplier.

But stances toward DE&I and procurement at some companies are being led by an overall corporate sourcing strategy and effort. Especially at larger companies, the decision as to whether a potential supplier's DE&I efforts are disqualifying or advantageous won't necessarily be made by the travel department alone.

"As the resource dedicated to diversity and inclusion continues to increase, so does the stakeholder ownership and accountability for integration across business functions – and that includes travel," according to BCD's Bryant. "While it may not quite be a central decision-making factor today – as diversity and inclusion becomes further entwined with ESG, employee wellbeing and experience – we see that this topic will continue to increase its leverage as part of the decision-making process for corporates."

The broadening of DE&I efforts and the formalisation of the role within corporations will have a direct effect on the suppliers they choose for their managed travel programme, Lichtenstein said.

"If you go on LinkedIn job postings, you will see at least one out of 10 jobs is for a new diversity leader," she said. "Those leaders will then help companies determine their suppliers in the future. You must have somebody dedicated to this with a voice that's loud enough and assertive enough in a way that people embrace it inside a company."

The formalisation of DE&I efforts and the attention paid to it by corporations in turn will drive suppliers to develop more comprehensive strategies to appeal to would-be clients, said TCG Consulting president Graham Ruskin.

"It's a focus beyond the spend. It's, 'What do I expect from my supplier?'," Ruskin said. "Similarly, sustainability used to be a checkbox. Now organisations are facing a lot of pressure to say, 'tell me more about sustainability', and that will drive a company toward further emphasis on sustainable travel. With DE&I, we're seeing the supplier say, 'How do I align with what the industry has said is very important to us?' That's where we're seeing… all the major players putting an emphasis on this, whether it's C-level positions or whether it's updating policies. That's kind of the piece that is tipping the scale."

The ways in which these trends will play out at companies of varying sizes and throughout the world remains to be seen, as travel procurement strategy hasn't traditionally been marked by its embrace of rapid or profound change. But that change does appear to be happening, and buyers and suppliers alike will likely have to adapt to a new reality.

"We're at the time of our society right now where it's time to do the right thing," said Lichtenstein.