Why is Supplier Diversity important?
A common misconception is that diversity is a quota system or social program designed to benefit selected groups while adding little to no value to the bottom-line. The fact is that a competitive advantage exists, as progressive organizations who have already implemented an effective strategy have realized.
A Supplier Diversity commitment benefits a company because it:
Supplier diversity is beneficial to all stakeholders, not just to the companies with programs. First and foremost, supplier diversity programming adds economic value because it encourages the growth of diverse businesses. Diverse businesses typically encounter barriers that challenge their start-up and sustainability, so effective supplier diversity strategies can alleviate these painpoints.
As small businesses grow, so will our nation’s economy. Since most diverse businesses are small businesses, they aid in the economic recovery and sustainability of their communities. In addition, supplier diversity is important because it provides products and services to emerging consumer markets. While traditional products and services remain available to consumers, demographic shifts create opportunities for diverse suppliers to meet the needs of emerging and/or shifting populations in the U.S. and across the globe.
Supplier diversity is also important because it assists the country in job creation. U.S. statistics show that nearly 50% of the U.S. workforce is employed by small business. In December 2014, the U.S. Small Business Administration reported 57 consecutive months of new jobs added back to the U.S. workforce after the worst recession in recent U.S. history. SBA Administrator, Maria Contreras-Sweet reports “…this new trajectory is attributable to the success of America’s entrepreneurs and the resurgence of our nation’s small businesses. About 7 million of the 10.9 million jobs added back were created not by large corporation, but by start ups and small enterprises.”