A strategy that ensures participation of a variety of business owners in supplying your company’s contingent labor is not only good public relations; it also delivers positive return on investment. By including labor-supply companies owned by women, ethnic minorities, veterans, LGBT+, and other historically disadvantaged populations, companies expose their workforce operations to a wider worldview. Each vendor brings business insights, inherent strengths, and unique strategies to the marketplace; some may be mimicked and adapted to the client’s applications to create synergies and efficiencies within the organization. Some smaller suppliers may even specialize in finding and signing worker groups that would be difficult to tap otherwise – stay-at-home parents, college students, moonlighters, etc.
Companies are well-served when they build in-house programs or insist their managed service partners build diversity and inclusion into their worker procurement programs. It removes artificial barriers to attracting and incorporating the best candidates and creates work environments where innovation and collaboration can thrive. It helps incorporate a workforce that reflects the community’s demographics and sensibilities.
A successful supplier diversity program includes several components to ensure it offers practical, real-world solutions while conforming with corporate objectives and guarding against potential risks. Here’s how to build a best-in-class program tailored for your company:
Align Supplier Diversity with Organizational Mission
In too many cases, supplier diversity programs have been simply bolted onto Procurement departments’ standard operating procedures. While the companies implementing them undoubtedly believe in diversity, they take little care to assure its implementation adheres to the firm’s values and mission. As a result, they forfeit momentum among divisions and fail to capitalize on data analysis, marketing initiatives, and financial advantages that diversity programs can bring. Your supplier inclusion program demonstrates your company’s desire to level the playing field for disadvantaged firms, but it should not be undertaken at the expense of your own prosperity. The key is to identify objectives that both further the cause of targeted business partners and help you increase revenue, market share, brand awareness, cost savings, or whichever other measurements on which you want to focus. This bigger picture emphasis meshes strategy with tactics and invites involvement of executives, managers, traditional and non-traditional workers, vendors, and other business partners.
Vet Existing and Potential New Partners
With your supplier diversity business objectives in mind, devise a scorecard to use in grading your current suppliers, as well as your managed service provider if you use one. Award points for vendors’ diverse ownership and percentage of diverse candidates presented and ultimately hired in response to requisitions. It may be easier to divide suppliers into tiers of usage: primary, secondary, and specialty. Primary vendors, of course, are your go-to suppliers. Adhering to the Pareto Principle, they likely will compose 20 percent of your stable, while garnering 80 percent of your business. Specialty vendors are those that are particularly adept at finding hard-to-find skills, operate in geographies with few qualified applicants, or source workers from pools particularly rich in diverse workers.
Assess Your Current Position
By segmenting suppliers, you can identify those that are instrumental in your success. This will aid in supplier consolidation for cost reduction. Consolidation clears space for new vendors to earn a slice of your business – an opportunity to expand your supplier diversity program. Take care not to simply favor partners that already have claimed much of your market share; compare these large suppliers to each other, keeping the best. Then, compare the second tier to others in the category. Determine your total spend and other metrics with each of the surviving vendors, find the percentage of these KPIs accruing to diverse suppliers, and uncover the steps you need to take in order to meet your diversity goals. Meeting these goals likely will entail severing relationships with some suppliers and initiating them with others, but don’t be afraid to give unknown vendors a chance! If they perform, you may have found new strategic partners. If not, you can jettison them with little worry.
Set performance targets
You will want to quantify supplier inclusion in ways that contribute to company performance and return on investment. To do this, you will have to engage your suppliers and MSP in order to meet diversity placements while maintaining worker quality, bill rates, fill percentages, and time-to-fill goals. Challenge yourself and your workforce partners to move beyond spend to measure diversity in terms of the program’s value to the firm. Consider setting goals that increase recruitment and development of suppliers owned by or catering to diverse populations. Working with partners whose demographics mirror the community’s and the customer base will inspire innovation, boost morale, and cement relationships that will pay off in the long run. Some advanced metrics to consider include cost savings through increased supplier competition spurred by the inclusion of minority vendors, market share gains driven by goodwill, brand acceptance, and integration of your company’s business into diverse neighborhoods and affinity groups.
Metasys Can Help
Metasys leverages its established relationships with the diversity supply community to provide clients with ready-made access to minority-owned and other diverse vendors. We support and utilize a number of smaller, local talent suppliers and participate in various specialty marketplace platforms. For instance, Metasys sources many quality workers from The Mom Project, which helps women remain active in the workforce through all stages of their lives, and Shift, which places recently discharged service members as they transition out of the military. When you work with Metasys, we invite vendors to participate in your inclusive supplier program, helping them conform to your workflow and objectives and preparing them to fit seamlessly into your stable. Let the experts at Metasys guide your organization to relationships with suppliers who bring new perspective to your industry, infusing your company with new ways of accomplishing your objectives. Call Metasys today.