Should Your Company Invest in Supplier Diversity Programs? The Answer is Yes.
By Yvette Montoya
When we consider the state of the United States in 2022 both socially and economically, it’s clear that our demographic is shifting and that Americans believe that social responsibility is more important than ever.
Companies that want to stay relevant in this economy need to prioritize diversity, equity and inclusion (DEI) programs and initiatives. A 2017 Cone Communications CSR study stated that 87 percent of consumers would purchase a product that aligned with their own values, and 76 percent would boycott a brand if it supported an issue that went against their beliefs. So, it’s a good time for companies to evaluate what their corporate social responsibility (CSR) looks like and where it needs improvement.
There are four types of corporate social responsibility: Environmental, philanthropic, ethical and economic responsibility– and supplier diversity programs have the potential to achieve all four categories. In a world that’s increasingly looking to employers to create stability and treat employees fairly, supplier diversity programs not only give companies a competitive edge but also make them more likely to maintain high standards of ethics. Implementing diversity, equity and inclusion (DEI) positions businesses to create a positive experience for employees, vendors and the community at large.
Here are three reasons why every company should take supplier diversity programs seriously:
- You Get to Be a Leader in Social Responsibility
Companies that choose to focus intentionally on investing in Black and Latinx, women-owned, and LGBTQ+ businesses build trust with their customer base and inspire other business leaders to examine their own company practices. When we create transparency related to how products are sourced and/or hiring and management practices, we put our money where our mouth is, and so will your customers. According to Cone Communications, three out of five Americans believe that companies should spearhead social and environmental change. And eighty-seven percent of Americans said they’d buy a product because a company advocated for an issue they care about.
Although there may be some challenges in finding minority-owned vendors that comply with a buyer’s procurement requirements, there are two solutions to this. One being creating mentoring and training programs for diverse suppliers to help them meet the standards of the certification process. The other is to partner with relevant councils and chambers of commerce that provide these support systems. When value is created through tangible solutions, everyone wins.
- Investing in DEI will Foster Innovation and Sales
Treating DEI like an option or something that isn’t deserving of attention means that customers will see that you’re not taking your CSR seriously. Corporate social responsibility initiatives can be the best public relations — as well as marketing — tool. Gen Z and Millennials are experts at spotting inauthenticity. A company that positions authentically with real company-wide efforts and accountability will be viewed favorably in the eyes of consumers, investors and regulators. Honest initiatives attract opportunities and employees that match an organization’s convictions.
CSR initiatives can also improve employee engagement and satisfaction — key measures that drive retention. Finally, corporate social responsibility initiatives by nature force business leaders to examine practices related to how they hire and manage employees, source products or components and deliver value to customers. All of these things create happy employees and customers, which lead to innovation, sales and a good reputation.
- You Get to Make an Impact on Structural Inequality in America
Supplier diversity programs are a catalyst for true social impact because thriving small businesses are the lifeblood of the American economy. Strong local businesses create jobs and higher wages, which put money back into the community and drive economic growth. Another plus of supplier diversity is the impact it will have on the company at large and the economy overall. Supplier diversity promotes healthy competition by increasing the pool of possible suppliers. This can lead to potentially lower costs and a better product quality. Not only that, bringing in people from different backgrounds or from backgrounds that reflect the community your company serves can result in better marketing, unique solutions to old problems, as well as innovative ways to meet your customer’s needs.
With midterm elections underway, it’s a good idea for businesses to be on the right side of key issues, including racial and gender equality and environmental sustainability. This gives corporations the opportunity to work collaboratively with businesses in a way that combats racial discrimination, all while empowering the public, creating economic opportunity and enhancing their business.
Yvette Montoya is a Los Angeles native and journalist who is equal parts content creator and writer. She covers everything from issues of spirituality and politics to beauty and entertainment. Her journalistic work has been featured on Refinery29, Teen Vogue, ArtBound, HipLatina, Mitu, and she’s a regular contributor for POPSUGAR.