Supplier Diversity

Why You Should Add Supplier Diversity to Your Inclusion Strategy

In Blog, Diversity & Inclusion by Rachel Murray

When thinking about your diversity and inclusion strategy, it’s commonplace to start with what’s most present in your day-to-day – your employees. The people that work with and for you are top of mind and you want to ensure that they are reflective of the country, your market, and your customers (current and future), and that they feel a sense of belonging when they come to work every day.

What may be less apparent is how you think about your procurement processes. Many of us, especially smaller companies, may be moving so fast, it’s hard to stop and think about who we’re buying from – but just as we might think about our personal responsibility when shopping, it’s worth taking a beat and thinking about who we’re buying from as a company.

As a certified B Corp, we do our very best to pay attention to who we’re purchasing from, whether it’s our business cards, food vendors, or contractors. The common term for this is “supplier diversity”. This means that companies are actively choosing to purchase from “minority-owned, women owned, veteran owned, LGBT-owned, service disabled veteran owned, historically underutilized business, and Small Business Administration (SBA)-defined small” businesses.

A quick note on language: we generally don’t advocate for calling people “diverse”,  as one person in and of themselves cannot be diverse. When you hear people being described as such, that usually indicates an underlying concern around who and what is being positioned as the default, and Others those people. We also prefer to use “underrepresented” as opposed to “minorities”, as the use of ‘minority’ can imply inferiority. In this article and in this space, we will be referring to supplier diversity as an indicator of whether a vendor or enterprise is women-owned or minority-owned, since that is the currently utilized shorthand for these types of businesses.

Many large companies have supplier diversity programs in place because they understand that there are some pretty amazing benefits:

  • Widening your pool of suppliers allows for greater opportunities to do business in new ways, expanding the possibilities of what you can purchase, whether goods or services.
  • In turn, this can create opportunities for innovation.
  • You’re providing financial opportunities to other businesses that historically have not had the same opportunities as the majority of US businesses.
  • Being public about your commitment to purchasing from these businesses shows your employees and customers that you are paying attention to and care about providing economic opportunities to historically economically disadvantaged communities.
  • Some companies have specific budget set aside to be used exclusively for certified minority and women-owned business enterprises.

If you’re curious about how to get your company involved, but feel as though this is out of your purview, here’s a great article from a woman who advocated for a supplier diversity program at Facebook and got it. If you do have the power to make some changes, here are some suggestions to get started:

  • Start now (the smaller your company is, the easier it is to put policies in place that can make a difference long-term).
  • Assess what you’re currently purchasing (products and services) and who you’re purchasing from. Look not only at the vendors and companies, but also at how much you’re actually spending.
  • Set realistic goals. Determine how many diverse suppliers you would like to purchase from and/or dollars you would like to spend over the next six months. Review these goals just as you would any other goals you’ve set for the company’s diversity and inclusion strategy.
  • If your company is small, without a formal procurement process, and you have purchasing power, great! Start researching supplier companies. It can be a challenge to find directories, this is the only one we know of. Another option is to get involved with organizations like WBENC and the National Minority Supplier Development Council.
  • If you have some say over your website and your CRM, consider putting together a call for vendors to add their information to a database you can access. This way, you can reach out to them when you need them. Some examples of companies who utilize this approach are Accenture and Cisco.
  • If you already have a formal procurement process, consider updating it to include a supplier diversity strategy.
  • Be vocal about your program! The more you can promote that you have this program in place, the more suppliers will be able to find you and other employees will be able to support the effort.

If you’ve implemented a supplier diversity program or have other thoughts or questions about this article, we’d love to hear from you!

Photo credit: iStockPhoto