Diversity means much more than improving human resources practice or marketing to diverse groups. To ensure that your company is maximising its performance examine the diversity of your suppliers and contractors and ensure that those working on your behalf are reflecting and practicising your values and diversity standards.
Supplier diversity is also key to ensuring maximum value for money from suppliers. Could your business save money by diversifying your suppliers? Are you over reliant on a small number of suppliers, or do you have alternatives in case of supply failure?
There are around 66,000 BAME owned businesses in London, generating a combined sales turnover of £90 billion.19 Make sure your business is making the most of the opportunities by considering companies that you might not normally work with.
Both public and private sector organisations are starting to include diversity terms in invitations to tender and putting diversity clauses into contracts. The Olympic Delivery Authority (ODA) aims to ensure that all the processes used to recruit and manage employees working to build the Olympic venues; infrastructure and transport (including employees working within the supply chain) are demonstrably fair and offer equal opportunities to all. Companies which supply products or services to the public sector will increasingly be assessed on the basis of equality and diversity, both at tender stage and throughout the contract lifespan.
Diversity clauses can require contractors to promote equality and diversity by:
keeping up-to-date equality and diversity policies and harassment policies
investigating allegations of harassment and taking effective action where harassment is
found to have occurred
ensuring that staff are provided with diversity training and are fully conversant with the
providing information on a regular basis about employees by age, disability, faith, gender, ethnicity and sexuality, and identifying numbers of staff employed from local communities
providing information on a regular basis about the owners, the board make-up and the employees of supplying companies by age, disability, faith, gender, ethnicity and sexuality
It is important to share your own company’s diversity expertise and experience with suppliers. Working closely with them will assist them to become more diverse, particularly if this is the first time the company has engaged with diversity. Hearing about diversity in a positive way from your company can make a real difference to the way those companies view diversity.
Supplier diversity – getting started
There are many areas of your business affected by supply chains. Here are some basic steps to follow when diversifying your supply chain:
Identify or appoint a supplier diversity co-ordinator at an appropriately senior level
Find out who your suppliers are. There may be many different suppliers servicing different departments, and supply chains may be long – who are your suppliers’ suppliers?
Survey your suppliers to find out how diverse they are regarding age, disability, faith, gender, ethnicity and sexuality. The survey should ask about business ownership, employee and manager profiles, policies in place and their supply chain. Make it clear to your suppliers that the information will be used only to ensure equality of opportunity in the procurement process
Communicate your commitment to supplier diversity with existing suppliers and employees, and encourage existing suppliers to become more diverse and inclusive in their employment and supplier practices
Communicate with diverse suppliers to find out what barriers they face in supplying your company. If you are having problems sourcing appropriate suppliers, consider approaching an intermediary or a voluntary sector organisation
Review existing procurement policies and procedures to identify further potential barriers to diverse suppliers such as accessibility, bureaucratic procedures or size of contracts
Create a plan to address those barriers. This plan could include ‘meet the buyer’ sessions where potential suppliers can ask questions, training sessions or business mentoring for potential suppliers, or supporting business networks. This could also include internal measures, such as simplifying the procurement procedures, training procurement officers, splitting contracts into smaller, more manageable parts, encouraging group tenders, or advertising in media accessed by business people from a specific under-represented group
If you are having difficulty finding the appropriate ‘supply ready’ businesses to work with, consider offering support to potential suppliers. In the US, large companies are increasingly ‘buddying up’ with smaller companies owned by women, people from BAME backgrounds or people with disabilities. Companies offer loans and provide mentoring and other forms of business support to enable diverse companies to become supply ready
Set targets and monitor progress. Appropriate measures could include the amount of money spent with diverse suppliers and the annual percentage increase on spend
Identify the business benefits of the programme, such as the number of new suppliers gained, savings made as a result of greater competition, increased market intelligence from your diverse suppliers, or increased credibility in your diversity activity, which in turn could result in increasing your potential to win contracts