It's Time to Answer the Call to Embrace Supplier Diversity
In June 2020, many large companies made sweeping bold statements claiming they were committing to a new era of partnership with small and diverse suppliers. This was an exciting period because the commitment looked promising across multiple industries. Now seven months later, in part as a response to the pandemic, these same companies are consolidating their business to a few established global suppliers; leaving diverse suppliers in worse shape than before.
This change in course is particularly damaging when small businesses and diverse suppliers have struggled due to the economic downturn caused by the global pandemic. Now that the press has moved onto other issues, it has become clear that many of these bold claims were purely performative. Yet the benefits of working with small diverse suppliers still exist and, in many cases, these larger companies learn supplier diversity has an impact on profitability and corporate reputation.
The case for partnering with a small supplier has continued to grow, especially after a turbulent 2020. As many businesses are looking to limit budgets, spending and working with a small agency is the single best way to ensure that your business is getting the most value and return on investment from any given project. Small businesses are incentivized to keep their leaders involved on all their accounts. In larger agencies, it is all too common that accounts are passed down to more junior team members after SOWs are signed.
Working with diverse suppliers ensures that you are receiving fresh and innovative approaches to your projects. A study conducted by Ernst & Young indicated that for every $1 million spent in procurement with diverse partners, companies claim around $3.6 million in re-investable funds for their bottom line. If you are looking to set yourself apart in your industry, look no further than a small diverse supplier. Small firms are much more willing to hear their clients out and innovate, instead of working from traditional templates or frameworks. These agencies are also agile and support clients with adaptive solutions that can be implemented faster due to their flat organizational structure.
If you need specialized solutions with a hands-on, prioritized approach, then small diverse suppliers are the perfect fit. External people you work with serve as an extension of your team, and this cohesion is only possible when working with suppliers who value your business and make each of their clients a priority. Suppliers like these are typically founder-led and working with them means you have high-level leaders and executives working on your accounts. This enables you to access the highest level of support at a lower rate, leading to high-value projects that deliver results without administrative delays.
Supporting supplier diversity programs and diverse suppliers is the right thing to do. Inclusive procurement has clear societal benefits as it improves the economic opportunity of disadvantaged communities. This is an important first step that highlights a true commitment to diversity and inclusion, both of which are proven differentiators in the battle to secure and retain top talent. Demonstrating to your employees that your commitment is tangible and not just a talking point goes a long way towards building a healthy and inclusive work environment that your employees are excited to take part in.
The commercial reasons to support diverse suppliers are also steadily growing. Every investment in the growing diverse supply chain promotes increased competition to win contracts, which improves the product and drives down costs. As more of these diverse businesses grow and profit, they become more adaptive and innovative, leading to a responsive and expanding field of expertise. The added benefit of doing the right thing does not go unnoticed by customers as well. Many larger corporations have found that customers who know about their commitment to work with diverse suppliers increase the likelihood that these customers will support their brand.
We challenge our peers in the communications industry and beyond to live up to the lofty promises made just six months ago. The case for supporting diverse suppliers is only increasing and the benefits of starting now are clear. It’s time for companies to lead the charge and put their budgets where their blogs have been.