Corporate supplier diversity programs expand the market for minority-owned businesses AND open doors to a better bottom line.
Supplier diversity is increasingly driving better business practices. Without question, your company could benefit from cultivating a wider choice of vendors and suppliers, which also helps promote a growing regional economy that enables everyone to prosper.
“It’s been shown that when organizations connect diversity and inclusion to their bottom line, they tend to increase their performance, productivity, and better reflect the community in which they do business and live,” said Michael Verhulst, President of the West Michigan Minority Contractors Association.
By actively seeking out minority suppliers and expanding who you work with regularly, you can boost your bottom line through increased bid competition and improve your company’s standing with your clients and in the public eye.
Here are a few more ways supplier diversity is good for your business:
- Supplier diversity is a natural extension of what you already do.
You’re already required to comply with the Equal Employment Opportunity Act of 1972, and supplier diversity initiatives simply take this mindset one-step further as an “Equal Opportunity Purchaser,” extending economic growth opportunities to those with whom you choose to do business.
- Supplier diversity can be the centerpiece of your cause marketing strategy.
Actively promoting good deeds (such as economic equity) as part of your brand identity means you could find a competitive edge in the marketplace. 34% of all consumers believe that economic development is the most important social issue for companies to address, topping both environmental concerns and human rights. 76% of today’s consumers believe it is OK for brands to support good causes while still making a profit.
- Supplier diversity puts you ahead of the demographic shift in our country.
By the year 2043, the racial and ethnic groups that today we call minorities will collectively become a majority of the U.S. population. Why not position your business as a leader in contributing to the economic well-being and purchasing power of these minorities? In the process, you’ll make your company more appealing when they are the dominant economic force. “It’s in everyone’s best interest to work with a growing minority population and the changing regional demographics,” said Jorge Gonzalez, Economic Development Director at LINC.
- Supplier diversity can mean cost savings for your business.
Increased competition from a wider range of vendor bids is always a good thing for the bottom line. Plus, minority suppliers tend to be leaner and more agile than their majority-owned counterparts, effectively doing more with less. This allows them to pass on their operational cost savings to you, the end client.
- Supplier diversity efforts open opportunities to mentor and mold the businesses you work with.
Experience has shown that businesses with supplier diversity initiatives gain stronger relationships with their supply base, new business opportunities, and a more agile supply chain. Minority businesses are eager to serve top corporations and show incredible flexibility and willingness to adapt to their clients’ needs. Numerous opportunities exist for majority-owned companies to teach their diverse suppliers on how to become better business partners—perhaps even the ideal partner.
Source: Adapted from “The Case for Supplier Diversity” by the Michigan Minority Supplier Development Council (www.minoritysupplier.org/membership/corporate-membership/the-case-for-supplier-diversity).