Lack Of Skills And Organisational Capabilities Represent A Huge Challenge For Those Looking To Implement Social Procurement Initiatives

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  • 74% of organisations are actively engaged in social procurement activities
  • 88% have either maintained or increased their commitment to social procurement throughout the pandemic
  • The importance of social procurement will grow significantly into the future agreed 86% of respondents, highlighting the sentiment and the expectations of businesses to deliver more for communities and local economies
  • Lack of skills and organisational capabilities represent a huge challenge for those looking to implement social procurement initiatives

The Centre for Social Impact Swinburne has produced a first-of-its-kind study of the state of social procurement in Australia and New Zealand.

The study – sponsored by IPA Personnel and delivered in partnership with the Chartered Institute of Procurement & Supply (CIPS), Social Traders, and Ākina – was conducted amongst procurement professionals in public, private and social economy organisations. The research investigated in which sectors social procurement initiatives were growing across ANZ, what spending targets and impact goals were measured, the most sought impact outcomes from organisations, the major drivers for change, and measured the pandemic’s effect on social procurement initiatives.

Social procurement is when organisations use their purchasing power to create true value in the supply chain and do good for local communities and disadvantaged groups. These decisions can have a significant positive effect on the environment, economies, and communities.

Despite the disruption caused by the worldwide epidemic, our analysis found that most organisations (88%) were either maintaining or increasing their efforts in this arena. 64% said that the most important factor in developing social procurement strategies was the organisational value system with 59% agreeing that regulation was a trigger to improve social value outcomes.

The most common areas of spend where social value outcomes were implemented included construction, cleaning and facilities, accommodation and food services, but that social procurement was possible in many other spend categories. The assessment also found that organisations were aware that this area of spend was likely to become more important due to reputational and bottom-line expectations driven by consumers and other stakeholders.

The top three social impacts were the employment of disadvantaged and/or local people, and economic development.

The conclusions of the report were varied, and recommendations included:

  • Track spend carefully and social outcome goals
  • Support suppliers to enable them to bid for work such as creating simpler processes or improving communication with suppliers by understanding cultural or ethnic differences.
  • Train staff in social procurement strategies
  • Use digital technologies and process improvements to integrate social goals into wider procurement strategies
  • Work with different levels of government to understand risks and opportunities

Sharon Morris, General Manager – Australia and New Zealand at CIPS observed, “This study allowed us to understand the opportunities and address the challenges of social procurement by working together to share knowledge, drive innovation, and ultimately equip procurement and supply chain professionals to drive social impact into the future.

Nikki Noack, Director, Major Accounts, IPA said, “Social procurement doesn’t have to be complicated. Essentially, social enterprises exist to be able to purchase goods and services that will help to contribute to social change. Working, and buying from, a social enterprise is one of the fastest ways to break the cycle of disadvantaged Australians.

Mike McKinstry, CEO at Social Traders commented, “At Social Traders we believe that now is the time to rethink how we can make a significant and positive impact on our economy and communities. This important research allows us to reflect on the practices of social procurement across Australia and New Zealand to date.

Dr. Sean Barnes, Director – Social Procurement at Ākina Foundation added, “Social procurement is at a critical juncture where there is a need to move from words to action and from a willingness to meaningful change.

The State of Social Procurement in Australia & New Zealand 2021 report is available free.

About Author

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PASA (Procurement and Supply Australasia) is the leading provider of information, education and networking opportunities to procurement professionals throughout Australia and New Zealand. PASA supports the largest community of engaged procurement stakeholders in the region, through its renowned series of events, publications, training, awards and PASA CONNECT membership network. PASA is a trading name of BTTB Marketing Pty Ltd. BTTB Marketing has operated under the BTTB, CIPSA Conferences and PASA names for over twenty years. https://procurementandsupply.com/

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