For too long, supplier diversity professionals have operated in a vacuum or echo chamber. With limited data points for comparison, it’s hard to know if supplier diversity efforts are any good.
Enter supplier.io’s Supplier Diversity Benchmarking.
Last week, we referenced the top three ways to leverage insight into the supplier diversity performance of hundreds of companies across all sectors. Today, we’ll walk you through a few practical examples with a few actual data samples from the report.
Has Your Diverse Spend Plateaued?
If your supplier diversity program has been active for a while, you’ve likely adopted new goals as you meet your original KPIs. It’s exciting to raise your diverse spending goal after successfully meeting the first milestone. But as you start working toward the next goal, it can feel like you’ve already tapped every opportunity.
You reach a plateau and start to wonder if this is actually the peak. Without external data for comparison, you might think you’ve maximized your diverse spend.
Suppose you’re an insurance provider committed to inclusive sourcing. You’ve spent the past three years building your supplier diversity program, increasing from 1 percent diverse spend to 1.5 percent diverse spend, and you’re within reach of 2 percent. You’ve made strides, but you find yourself working hard and harder to find any more areas to eke out a little more spend with diverse suppliers.
Is this the best it gets? Have you maxed out diverse spend in your sector?
See the Full Vista with Supplier Diversity Benchmarking
With Supplier Diversity Benchmarking, you have access to information to get you past this plateau.
First, the best-in-class performers in insurance are delivering 7.2 percent diverse spend, so you know that higher spend is possible. (Note that best-in-class is not the benchmark, just the highest performer.) Second, you’d know that professional, scientific, and technical services are the highest diversity spend categories for insurance providers.
With an aspirational spend target and insight into categories where your peers are seeing success, you can develop a new strategy. Review your diverse spend by category and see how it compares to benchmarks. You should be able to see weak areas and opportunities for improvement. Where is the low-hanging fruit that can provide quick wins? Work closely with your buyers in this space to identify and include diverse suppliers.
Are Your Supplier Diversity Goals Meaningful?
Sometimes we set a goal and get so focused on achieving it, we forget to step back and think about what that achievement actually means. Will reaching that goal make a meaningful difference to suppliers? To the communities where we live and work? To our company’s bottom line? Are we truly challenging ourselves? Are our supplier diversity goals on par with others in our industry?
Consider the energy sector. Energy companies are the supplier diversity rock stars, achieving the highest benchmark spend according to supplier.io’s data. But that doesn’t mean the industry can’t do better.
Zoom in on Details That Help You Grow
With Supplier Diversity Benchmarking, a supplier diversity professional in the energy sector can review their diverse spend by diversity category and identify opportunities for growth. Perhaps most of the company’s diverse spend is with Black-owned businesses but few women- or LGBTQ-owned enterprises. Perhaps the company recently celebrated reaching an overall diverse spend of 3 percent, but the industry benchmark is 4.2 percent.
Your next steps are to compare your commodity-level spend among minority business enterprises (MBEs) to benchmark and see where you have a chance to make up some ground quickly. You will find that one of the best MBE categories in your space is construction. It’s time to coordinate with your facilities and real estate teams to create a plan to find and include MBEs in your sourcing efforts.
Every organization is walking its own supplier diversity path, and we absolutely encourage you to celebrate your program’s achievements. But don’t lose sight of the bigger picture. Benchmarking helps you set and achieve meaningful supplier diversity goals.
Are You Struggling to Make the Business Case for Supplier Diversity?
Convincing the C-suite to invest in supplier diversity can be an ongoing challenge. Resources are prioritized for programs that benefit the bottom line, such as improving productivity, reducing costs, and retaining employees.
If you’re looking for a fresh angle in making the business case for supplier diversity, focus on your workforce.
Talk the C-Suite’s Language and Attract Top Talent with Supplier Diversity Benchmarking
Let’s say you manage the supplier diversity program for an entity in the technology sector. Tech companies are historically at the forefront of identifying and finding diverse talent; they thrive on outside-the-box thinking and innovation.
Diverse talent wants a company that walks the walk, which means creating a meaningful, robust supplier diversity program to help build your brand, drive employee recruitment and retention, and enhance your company’s social and cultural objectives.
You’ve done your first data enrichment and find your diverse spend is 2 percent. Company leadership views this as significant and feels that investing further in supplier diversity is unnecessary. However, using Supplier Diversity Benchmarking, you see that 2 percent diverse spend is behind the benchmark for your sector multiple times over.
Using this information, you can “speak the language of the board” and develop a data- and analytics-driven plan. Leadership is looking for a comprehensive plan including comparisons, strategy, accountability, and measurement. With supplier diversity benchmarking, you can:
- Tell the story of where you are and where you’re lagging
- Identify low-hanging fruit for quick wins
- Develop a concrete plan and strategy that outlines exactly what you’re going to do, how you’re going to measure, and how you’ll hold people accountable
With a comprehensive supplier diversity strategy in place, your company can walk the walk, becoming more attractive to top talent.
Whether you’re struggling to achieve your goals, want to set new standards, or need to make the business case for supplier diversity, Supplier Diversity Benchmarking has the insights you need.