As the hospitality industry continues to make strides in diversity, equity, inclusion and environmental, social and corporate governance initiatives, this should also include the suppliers that companies work with.
This week I reported on how Hilton Supply Management has helped to mitigate pandemic-induced supply-chain disruptions by further leaning into its diverse network of suppliers.
I'd like to start with the basics and answer the following: What is supplier diversity, who in the hospitality industry is actively pursuing it and why is it important?
According to a 2020 article by Harvard Business Review, "a diverse supplier is a business that is at least 51% owned and operated by an individual or group that is part of a traditionally underrepresented or undeserved group."
Within the hospitality industry, you'll often see them referred to as "supplier diversity programs" or "diverse supplier programs" on brand company websites.
Marriott International's diverse supplier program is called Exchange. Partners of the program include National Minority Supplier Development Council, U.S. National LGBT Chamber of Commerce, Women's Business Enterprise National Council, Disability:IN and more.
To be part of Hyatt's Supplier Diversity program, a supplier must meet be a minority business enterprise, women business enterprise, disabled veterans enterprise or lesbian, gay, bisexual and/or transgender owned business enterprise.
Wyndham Hotels & Resorts' company website says it believes in "enhancing our supply chain by building partnerships with both diverse and non-diverse suppliers."
And IHG Hotels & Resorts in 2020 laid out its next chapter for diversity, equity and inclusion, with the continued commitment of "cultivating a culture of inclusion for our colleagues, owners and suppliers."
"We want to work with suppliers who share our diversity, equity and inclusion values and are focused on increasing the representation of diverse suppliers in our direct spend through our Supplier Program," the company's website says. "In 2020, we directly spent more than $50 million with diverse companies in North America."
Of course these are just a few examples, and I hope many other companies are weaving this into their business strategy.
Going back to the Harvard Business Review article, it says diverse supplier programs deliver societal benefits, create or preserve jobs, help companies maintain high moral and ethical standards and widen the pool of potential suppliers, which I have to assume is crucial during periods of supply-chain hurdles.
Another interesting point the article notes is that having a diverse supplier program can also serve as a selling point to prospective employees. And we know that labor continues to be top of mind for every leader.
Business Insider reports that by 2026, Gen Z will be the largest generation at a whopping 82 million people. To put that in perspective, the millennial generation was previously the largest, with an estimated 72 million people in 2021.
CMSWire reports that Gen Z are particularly, environmentally concerned, highly value racial, sexual and religious diversity and are supportive of women's rights, LGBTQ+ rights and the Black Lives Matter movement.
Another report by World Economic Forum predicts Gen Z will account for 27% of the global workforce. Though that might not be as large of a share as other generations, I still feel that Gen Z will drive a lot of influential changes in the workforce.
With that said, companies must prioritize relevant ethical and moral values, not to simply say that "they do it," but because they know it's the right thing to do, it matters to employees, and overall it creates better business opportunities.
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