Why are companies growing supplier diversity?

The 2023 State of Supplier Diversity Report from Supplier.io found most businesses (69%) report that the current economic climate has had minimal impact on their supplier diversity programs, and 89% expect business support to stay the same or increase in the upcoming year.

Key Takeaways 

• Companies won’t be shy about promoting their supplier diversity programs, despite the political environment. Only 7% said they plan to publicly promote their programs less moving forward; 38% said their public promotion would stay the same, and 16% indicated public promotion would increase.

• Executive support and program accountability increases in 2023. A remarkable 97% said executive support remains consistent or better compared to last year; 72% of companies now have clearly defined supplier diversity goals, up from 68% last year; nearly half (48%) include supplier diversity metrics in management KPIs.

• The business value of supplier diversity remains strong and broad. In addition to supply chain competitiveness, companies are investing in supplier diversity to enhance their brand image (53%), win new business (46%) and align with corporate culture and workforce inclusiveness (81%).

• Supplier diversity programs help drive ESG performance, while standing on their own. 55% said supplier diversity helps drive their organisation’s overall ESG strategy.

• Data is the pillar of supplier diversity. 67% are now using third-party data services to improve supplier diversity programs, a 44% increase over 2022. 56% report that the diversity data they have access to has improved compared to last year.

“Supplier diversity remains an intentional and essential supply chain strategy,” said Aylin Basom, CEO of Supplier.io. “Our research continues to show wide-ranging investments in diverse businesses of all types – including SMBs, veteran- and women-owned businesses, minority-owned organisations and more. Programmes have matured substantially over the past few years, resulting in a bigger impact for the businesses and across the global economy.”

“Reliable data remains the lifeblood of supplier diversity programs,” said Basom. “Our research found that three of the top four challenges associated with supplier diversity programs today relate back to data, which correlates to the increased adoption of third-party sources we’re seeing across the market. Investing in your data remains the most important step to baseline, grow and expand your program. Supplier diversity is now a driving force in ESG strategies and outcomes, especially across the supply chain.”

What are the benefits of a supplier diversity programme?

• Enhanced brand appeal for a broad audience
• Stimulation of competition among suppliers to drive cost savings and innovation
• Strengthens CSR efforts making the organisation more attractive to investors
• A positive impact on a company’s reputation as an employer

Read ten top tips on how to develop a supplier diversity programme in procurement.

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