New US report finds supplier diversity is rising but data is lacking

According to Supplier.io’s new 2023 State of Supplier Diversity Report, supplier diversity has seen an increase in board-level support over the last six years, but poor data standards are hampering efforts.

Researchers surveyed 216 supplier diversity professionals across a number of topic areas including business, executive support, program management, data, results, ESG and more to learn what is happening with programs across the country.

They reported three major findings:

• When supplier diversity is seen as a business driver, executive support across the company grows. But with more support comes more accountability and scrutiny

• Data was a key theme across the entire survey. It has been the biggest improvement, priority, challenge and opportunity. At the same time, accuracy is key

•  Although this year was expected to be more difficult because of the economy and programs like ESG pulling resources, leaders have continued to gain support despite headwinds

The results reveal support is highest from sourcing managers/directors (70%), followed by senior business leaders (61%) and CEOs (52%). 

Meanwhile, 59% of respondents claim the economic climate had not interfered with financial support, 23% even said it had accelerated their ambitions. When it comes to politics, 89% state it had not impacted their resolve.

The biggest challenge surrounding diversity programs was identified as data, with 29% of respondents raising issues around accuracy, 17% around including leadership and 5% citing audits as their stumbling block.

67% of respondents reported using third-party data to monitor supplier diversity status, making it the top way in which they tracked status this year, up from third place last year.

As a result, when respondents were asked to force rank their top priorities, data took first place with tracking and reporting as the clear winner. 

Speaking to Supply Management, Supplier.io CEO Aylin Basom said, “One of the primary reasons to invest in supplier diversity a few years ago was just to meet compliance with government regulations. In the past six years, that number has gone down – now, customer requirements has overtaken it.”

She added: “For a lot of companies, supplier diversity is aligned with their values, their corporate culture, but it also has corporate value. It improves supply chain competitiveness, and in the current economic conditions, it can make a big difference.”

According to the data, 81% of respondents state alignment with corporate culture & workforce inclusiveness as their main reason for investing in supplier diversity, followed by improving supply chain competitiveness (66%), enhancing brand image (53%), customer requirement (40%) and government compliance (36%).

The report also found that accountability is on the rise with 72% having clearly defined supplier diversity goals (up from 68% last year), while 67% have created an annual supplier diversity plan and 48% now include supplier diversity metrics in management’s performance objectives (up from 36% last year).

Finally, ESG was discovered to be a helpful partner and not the enemy, with 55% reporting that ESG helps supplier diversity programs. 38% of supplier diversity leaders also now manage and report spend on social and sustainable suppliers.