At its core, supplier diversity promotes economic growth, both in the broader economy and within a corporation’s immediate community. The commencement or expansion of supplier diversity programs also offers a multitude of direct benefits to businesses. These benefits include improving market share, increasing company flexibility, and fostering competition among suppliers.
Diverse firms, often small in size, are essential contributors to the economy. Hence, supporting these businesses promotes economic growth and accelerates economic recovery. At the local level, engaging diverse businesses allows them to enhance existing jobs, create new ones, increase wages, and contribute more in tax revenue, thereby supporting their local communities.
Businesses that allocate 20% or more of their expenditure to diverse suppliers report that 10-15% of their annual sales come from these programs. Meanwhile, companies that spend less than 20% on diverse suppliers attribute less than 5% of their sales to their supplier diversity program. Clearly, the more a company invests in diversity spending, the more it enhances its market share.
Why Should Companies Invest in a Supplier Diversity Program?
- Good for Business: Embracing a supplier diversity program benefits the market presence of your business and reflects your commitment to local communities’ economic growth and welfare. Diverse customers appreciate businesses that align with their needs, which often leads to increased support for your company.
- Reflects Corporate Values: Diversity and inclusion are integral to a company’s ethos. A functioning supplier diversity program signals to potential employees and stakeholders that your company genuinely values diversity and inclusion.
- Fosters Innovation: Diverse suppliers offer a myriad of ideas, perspectives, backgrounds, and expertise, which can foster innovation. They can assist in developing innovative procedures that create competitive environments, drive efficiencies, lower charges, and reduce costs – all essential elements for business growth.
- Enhances Business Profile: A thriving supplier diversity program puts your company in a positive light with various stakeholders. It can improve your reputation among representatives, regulators, customers, the media, and peers, which can lead to increased visibility and brand recognition.
- Aligns with Partners’ Corporate Values: Companies prefer partners who share their corporate values. If your crucial corporate client has a robust supplier diversity program and you don’t, you may risk losing business. Synchronizing your corporate values with those of your partners can help you maintain and win business.
The Importance of Indigenous Suppliers in Canada
In a Canadian context, emphasizing diversity also includes promoting indigenous suppliers. This is essential for a few reasons:
- Cultural Understanding: Indigenous suppliers bring a unique perspective to the table, based on their cultural understanding and local knowledge. This can be advantageous when companies seek to expand their operations or cater to indigenous communities.
- Supporting Local Economies: Buying from indigenous businesses directly supports these communities, which often face economic disadvantages. This can lead to job creation and economic growth within these communities.
- Compliance with Government Regulations: The Canadian government encourages corporations to work with indigenous suppliers. In certain cases, companies may need to show they are working with indigenous businesses to be eligible for specific government contracts.
- Reconciliation Efforts: Working with indigenous suppliers is a way for corporations to contribute to the ongoing reconciliation efforts between indigenous peoples and the broader Canadian society. This can improve a company’s public image and show commitment to a socially responsible business model.
In conclusion, supplier diversity is crucial to a company’s business strategy. It not only promotes economic growth and innovation but also enhances a company
