Diverse Spend: Tier 1 Vs. Tier 2

I’m going to start this blog off with a painful, but simple truth about me. Strap in, it’s a good one.

Once upon a time, at the ripe age of 21, I married the man of my dreams. We had a beautiful (albeit stressful) wedding and we were headed off to the Tennessee mountains for our honeymoon. I, a new and excited wife, was excited to jump into this life. One of the things we agreed on was I would cover the majority of dinners. Bless my husband, he’s great at so many things, but cooking just isn’t in his wheelhouse. Although, he does make a mean grilled cheese.

So, we head to the grocery store, get a very random collection of snacks and I head home with my head held high, ready to make a gourmet Hamburger Helper. Everything’s going well until we start eating and I instantly realize, I’ve made a noticeable mistake. A few tears and a pep talk later, I am trying to figure out how I could possibly mess up Hamburger Helper. I’ve seen my mom make it countless times, and to be honest, it’s NOT a complicated situation. Until I realize that I used breakfast sausage instead of regular ground meat…

Here's the lesson I learned:  Details matter & all ground meats are definitely not created equal. While they all have their own purpose in life. Hamburger Helper tastes like death if you use the sage-y goodness of breakfast sausage.

Mkay, now that you’ve laughed a little, why am I bringing this up? Glad you asked. It’s because details matter to you and all diverse spend is not created equal. Caught your curiosity? Let’s dig deeper.

What is Diverse Spend?

Diverse spend simply put is when a company selects a certified diverse-owned company as a supplier or vendor. However, in organizations that have more mature supplier diversity programs, goals might be established around different type of diverse spend, like Tier 1 vs. Tier 2.

Tier 1 diverse spend is when an organization works directly with a diverse supplier, while Tier 2 spend is when an organization has a supplier diversity program that requires its prime suppliers to work directly with a diverse company.

Let’s talk about Tier 2 diverse spend for a second —

Why would you want to create goals that, 1) are within another company that you don’t make decisions for, and 2) might minimize available options to you? Because you understand the importance of infusing diversity through an entire supply chain. It’s not enough to have processes that impact DEI efforts internally, but you have a further commitment to this to make real change. You must desire to have an excellent program from start to finish that’s reflective of your community & customer base. You understand that we are all better together and recognize the power of holding our world accountable to making the right choice over the easy choice.

When working with our customers or potential customers, we take time to slow down and clearly define what goals they have especially around supplier diversity objectives. And as an organization, it’s very important to slow down to understand these differences and have clear goals around each piece.

Some goals may be broader like 20% of your spend going to diverse companies, or you might narrow in and have intentionality around focusing on veteran or minority-owned organizations. Regardless, it’s important for companies to partner with a trusted and certified diverse partner to accurately collect towards goals.

Whether you are new to this space or just need a few steps to grow your program to the next level, here are some things to consider as you plan out your 2024 goals:

1. Connect with Like-Minded Companies in your Industry

As the saying goes, birds of a feather flock together. No matter where you’re at in your supplier diversity program, connecting with organizations in your industry can be beneficial. Engaging with companies with similar values and focus can lead to opportunities like idea sharing, mentorship, and collaboration.

2. Look at your Local Diversity Councils

There are a ton of resources available to you through the National Minority Supplier Diversity Council and its regional chapters. These are great support systems that provide organizations with access to certified diverse-owned businesses with the network, resources, and direction you need - all while facilitating connections with organizations who also have diverse spend goals.

3. Contact Populus Group

As a Hispanic- & Veteran-owned business and an organization full of people who deeply value diversity, equity & inclusion, we’re passionate about helping organizations meet goals that make a larger impact on our world. And through our strategic partnerships, we’re able to create opportunities for both Tier 1 or Tier 2 diversity spend in programs with the ability to scale

Fill out the form below, and let’s connect and grow together!

And always remember, not all ground meat is created equal.