Why is Supplier Diversity a Best Practice?

As a procurement professional, how can you demonstrate a commitment to equity and fairness and promote your local economy? Promote supplier diversity! Not only can diversity in your supplier pool create those benefits, but it also allows your organization to comply with existing regulations and prompt behavioral changes in large, seemingly immovable, contractors.

As Darin Matthews states in Mercell’s “Best Practices: Supplier Diversity” webinar, supplier diversity, “…can promote and bolster the local economy. It will contribute to your local tax base when you do business with a local supplier, it also provides local jobs – their employees will work locally. And also when those employees receive a paycheck, that provides an opportunity for discretionary spending within your community, so it is really a trickle-down effect.”

65% of new jobs since 1996 have been created by small businesses and 50% of the working population (120 million individuals) work in a small business. In the United States alone, 28 million small businesses operate day-to-day while only 50% of small business start-ups last at least 5 years. These small businesses are experienced, certified, bonded, and insured, so why are so many failing? In reality, supporting small businesses is often falsely equated with costing your agency more money. However, small and diverse businesses actually increase competition and lower costs.

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