Research on Supplier Diversity in Canada showed that “only 43% of organizations with diversity and inclusion policies engage in supplier diversity”. In recent years, this disconnect has been attributed to a lack of involvement with government incentives. However, with the liberal government leaning toward a more supportive procurement for women entrepreneurs, we see change may be underway.
Procurement for women entrepreneurs
A recent National Post headline read ‘Status of Women Canada pushing for procurement to support female entrepreneurs’. The article quoted spokesman for Status of Women Minister, Maryam Monsef, stating “department officials are examining key issues and potential strategies to advance the participation of women-owned enterprises in the federal procurement process”. The government’s funding of diverse suppliers will be part of a new program that supports innovation, reported to total $50-million.
There is no denying the slow but steady progression toward the inclusion of supplier diversity policies carried out by both governments and businesses. However, research on barriers and possible solutions is integral if we want a greater push.
Research on supplier diversity
The University of Manitoba (UOM) released a report in 2016 that focused on identifying issues and recommendations on improving “Supplier Diversity in Canada.” It’s research, in accordance with the upcoming initiatives held by the Canadian government, encourages us to remember the importance of diversity and inclusion programs.
UOM defines supplier diversity as ”a business or non-profit organization that is at least 51% owned, operated and controlled by Aboriginal peoples, members of a visible minority group, women, those who identify as LGBT+ or people with a disability.” In Canada, there are three types of organizations that are more likely to participate in diversity and inclusion strategies. They include those with:
- Diversity and inclusion policies
- Corporate social responsibility, and
- Operations that extend beyond our border and out of the United States.
However, this doesn’t necessarily mean that organizations in this criteria also participate in supplier diversity. In fact, UOM also discovered that only 35% of organizations who are recognized as one of Canada’s Best Diversity Employers, actually execute these programs. In other words, although initiatives are being taken to create the foundational policies, there seems to be a missing component.
Diversity benefits changing markets
When designing business strategies and objectives, there are questions we must ask: Are we taking measurements to safely manufacture and package goods? Are we considering the environmental impact on our ocean, air and land transports? Our answers to these questions define our brands and provide consumers with insight into what our organizations value.
There are many benefits that come from implementing a supplier diversity program into our businesses. Investigations on barriers faced by organizations to implement supplier diversity programs found that 36% lacked awareness of these advantages. One particular benefit that comes to mind is the awareness customers have of businesses who exercise corporate social responsibility (CSR).
From a business to consumer (B2C) standpoint, consumer buying behavior has changed over the years. Rather than buying solely based on brand name or price, customers consider how a business contributes to or affects our world. This has engaged many organizations in Corporate Social Responsibility (CSR) initiatives, which includes the design and implementation of supplier diversity programs.
The movement toward diversifying both government and business portfolios is an effective strategy that caters to the demands of changing markets. It’s interesting and comforting to see that the recent initiative carried by the liberal government is in line with research identifying government incentives as a barrier. It reinforces the importance of aiding women and minority-owned businesses with the support they need to grow, expand and diversify business channels.