The opportunity to secure government contracts is a powerful driver of supplier diversity programs.
Often, these contracts require a certain percentage of diverse spend, so organizations that struggle finding diverse suppliers are at a disadvantage.
Some state and federal tax incentives also require a commitment to contracting diverse suppliers—this is an easy benefit to a company’s bottom line if the required spend can be achieved.
Increasingly, Tier 2 diverse suppliers—essentially, your vendors’ vendors—can be counted toward diverse spend. Tracking Tier 2 takes some extra effort, but with the right solution, this spend can open up lucrative government opportunities.
A diverse supplier base gives you plenty of options to manage all suppliers as well as your organization’s procurement needs. Creating a larger supplier pool also creates competitive pricing with vendors.
With these benefits in mind, a robust supplier diversity program can be wildly cost-efficient—you aren’t spending as much to find suppliers, the diverse suppliers you already have are less likely to leave, and your thoroughly vetted supplier portfolio has a proven track record of success.
How Consumers Value Supplier Diversity
In our soon-to-be-released report, we asked diverse suppliers whether an organization having a supplier diversity program influences whether they will buy from that organization. About 36 percent of respondents said it was a strong influence, and another 46 percent cited at least a slight influence.
Although this result is just with the suppliers themselves, you can bet that a decent-sized segment of consumers also value a company’s commitment to diversity.
A supplier diversity program opens new opportunities for customers to support your organization and recommend it to others. That kind of impact may not be immediately measurable, but it’s the sort of success that makes your supplier diversity program all the more worthwhile.
What opportunities have your supplier diversity program created?