Is there anything better than a freshly baked chocolate chip cookie with a crispy edge, and gooey center? I consider myself a connoisseur of treats, and I really don’t know if there is. Recently I indulged in a giant chocolate chip cookie baked and served in a cast-iron skillet, topped with heaping scoop of salted caramel ice cream. I'm not one for theatrics, but this masterpiece did more than satisfy my sweet tooth, it helped me re-image a classic dessert.
Chocolate chip cookies service the same purpose to people as diversity spend does to a business – that is, to satisfy a need. In the case of a great cookie, great ingredients with a delicious presentation make all the difference. In business, what really makes an organization great is what’s behind it – the components that work together to make it stand out. Working with Diverse Suppliers is one of those components. Diversity spend, as a practice and a strategy, is about more than meeting a goal, it's a proven way to transform your business and community. This post will walk you through the world of diversity spend and outline the benefits of utilizing this strategy at your company.
Intro to Diversity Spend
Diversity spend is any amount of money a company expends on goods or services from a diverse supplier. There are 16 categories used to identify diverse businesses; some of the most common are:
- Small Business Enterprise (SBE)
- Women’s Business Enterprise (WBE)
- Minority-Owned Business Enterprises (MBE)
This post will focus on the Minority Owned Business (MBE) category. Populus Group is an MBE, which the National Minority Supplier Development Council defines as a minority owned business (or a business owned by US citizens who are Asian, Black, Hispanic and Native American). Ownership by minority individuals means the business is at least 51% maintained by diverse individuals or, in the case of a publicly-owned company, at least 51% of the stock is owned by one or more such individuals.
The Strategic Business Benefits of Working with an MBE
Diversity spend is something companies are increasingly focused on, and with good reason. According to a recent study, "Over the past 10 years Minority Owned Business Enterprises (MBEs) have grown at approximately double the rate of all firms in the U.S. economy.” It’s a smart strategy; diverse groups bring diverse perspectives and strengths. When combined they make an organization much stronger.
Consumers have become progressively more diverse too, and when people are represented at companies in their communities, they’re more likely to support those organizations. Demographers predict that the U.S. will be majority-minority by the mid-2040s. Companies are increasingly viewing supplier diversity as a way to support economic development and job creation among traditionally underrepresented members of society.
In order to continue to promote, and grow diversity spend, many businesses have Supplier Diversity teams that not only evangelize the benefits of utilizing diverse suppliers, but also help create diversity spend goals for their companies to adhere to.
Diversity Spend Today
Organizations today are spending most of their money on procuring technology, or talent. As you may or may not have noticed, there are a growing number of platforms that allow workers to connect with businesses for all kinds of temporary and gig-based work. For example, our friends at Catalant Technologies are connecting enterprise businesses to high-end knowledge talent on a project basis. According to the National Bureau of Economic Research, more than 16 percent of U.S. workers participate in flexible contract work as their primary job. This represents a 56-percent increase over the past 10 years, according to a report by the National Bureau of Economic Research. This means that companies are changing how they’re finding, and engaging a flexible workforce.
Odds are your company uses at least one freelance or on-demand platform. As a result, there is a growing need to think strategically about how your company spends money on suppliers in this space. Here’s what your business should think about when it comes to investing in on-demand supply chain technologies:
1. If you haven’t already, define your organization’s perspective, and strategy towards supplier diversity.
2. Engage your regional affiliated NMSDC branch as a resource.
3. Ensure you include diverse suppliers in any bids you’re seeking for projects and freelance engagements. If you don’t know what to look for, just ask.
4. Consolidate, manage and gain visibility into existing spend for freelancers and gig platforms. You should think about managing all suppliers under one trusted supplier umbrella. This will help you avoid the confusion and difficulties that can arise from having different departments with different processes. Whether you're looking for a Freelance Management System, a Managed Service Provider or a seconday supplier managemetn system, we've got a team of experts who can help.
Diversity Spend helps drive companies and communities forward because it increases companies’ profitability while supporting diverse economic growth in smaller local communities and the economy at large. If you’ve got questions about how to take your supplier diversity strategy to the next level, the best thing you can do is enlist the help of an expert. We'd love to help you get more out of your program,
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