The commitment to business diversity has surged in the past few years, and corporations are being challenged to do more than craft statements to demonstrate their commitment. Where success can sometimes be slow, intangible, or encounter roadblocks, a business commitment to business diversity often results in measurable successes, which can fuel other initiatives. Understanding the role of supplier diversity in a robust business diversity strategy can be a major step to advancing busiess diversity goals for an organization.

The Fundamentals of Supplier Diversity

Supplier diversity refers to initiatives by companies to source goods and services from vendors owned and operated by underrepresented populations, particularly socially or economically disadvantaged people. Most initiatives have a formal component, requiring the diverse supplier to be certified by a third party that it is at least 51% owned and operated by individuals who qualify as diverse. The most typical programs include ownership by minorities, women, veterans, LGBTQ+, or people with disabilities.

An important component of many successful supplier diversity programs is a focus on small, locally owned businesses. Companies that value their ability to contribute to the local economy, foster development and success in the communities where their customers and employees live and work. Entrepreneurs and small businesses who would historically be excluded from opportunities achieve the ability to grow and prosper, which in turn raises up the entire community.

Supplier Diversity Utilization Creates Measurable Success

From a company perspective, business diversity initiatives need some measure of accountability and quantification. In this regard. supplier diversity can easily be measured by various criteria with data readily available for analysis and reporting. This offers an opportunity to demonstrate commitment to diversity with objective metrics. By tracking the tiers of the supply chain, these initiatives also leverage the purchasing power of companies to encourage suppliers to use diverse-owned businesses for their own needs. The expanding sphere of influence increases the likelihood of opportunities for small, locally owned businesses.

Supplier Diversity Initiatives Impact Other Diversity & Inclusion Efforts

Today’s workforce values employers who show a commitment to diversity. For younger workers seeking employment, diversity is a requirement. A robust company program that includes the concrete data available in a supplier diversity program demonstrates a genuine commitment critical to workforce recruitment. From an internal development perspective, work on aspects of supplier diversity offers important employee development opportunities that can be incorporated into other initiatives to support and foster employees from diverse backgrounds.

Supplier Diversity is an Immediate Opportunity to Build a More Sustainable Business

Whether it’s a simple step like ordering gifts from a diverse, local, small business for team development, or a major, company-wide initiative, supplier diversity can become a part of a team, department, or company focus. The key to a successful program is the development of objective, measurable criteria and goals for the initiative, including the percentage of spend, tiered reporting, and regular, achievable milestones. This allows a company to capture meaningful statistics demonstrating its commitment to business diversity.

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