5 Major Impacts of Diversity Initiatives.

By: CenterPoint Diversity,

Companies have long been aware of the advantages of diversity, but now they realize the economic and social impacts. Diversity initiatives in procurement benefit everyone. It includes company shareholders and customers, as diverse workforces create more products and services that appeal to everyone – whether black, white, or Hispanic; Christian, Muslim, or Hindu; gay or straight. The following are five significant impacts of diversity initiatives in procurement:

 

Diversity

Historical Diversity

Diversity initiatives were pioneered by activist Jesse Jackson. He started the National Rainbow Coalition, a coalition that focused on multiple aspects of equality. He later launched Operation PUSH (People United to Save Humanity), which advocated for African-Americans. These activists saw a great need for diversity within companies. They pushed hard for it as they felt they weren't receiving the same opportunities. 

These activists wanted an equal playing field for all individuals regardless of their background or ethnicity. They argued that if you hire people from different backgrounds and ethnicities, you will have more success. There is a better chance of understanding what the customers want or having better ideas than someone who isn't exposed to other cultures or ways of thinking. Diversity also leads to better customer service and broader perspectives which can lead to innovations and ideas. It also increases creativity, innovation, tolerance, and collaboration skills.

Historically, research has shown that diverse workforces are more productive.  They can see things from many different perspectives while sharing knowledge.

Economical

Research by McKinsey and Company finds that a diverse workforce will significantly impact an organization's profitability. It generates an increase of between 11% and 24%. Moreover, for every percentage point improvement in gender diversity, the average return on equity went up by 6.7%. This is considered too big for any company to ignore. And it doesn't stop there. Increasing the representation of women at senior levels could potentially result in increases of 2.6% to 3.1% (depending on how much you diversify) in revenue. So, a lot can be said about diversifying your workforce economically; it makes sense for businesses large and small!

Social

If companies fail to do this, they will be met with backlash and criticism from their customers. There is also the issue of people feeling like they're being left out. If a company does not offer various products or services, it may indicate that it's less interested in serving specific groups of people. This can lead to poor social interaction and unfair business practices. In addition, if there are any laws governing employment rights and diversity policies, then these would need to be addressed by hiring managers. 

Differently abled individuals would want equal access to employment opportunities. However, disabled workers would wish for equal access when applying for jobs and fair working conditions. Minority groups might experience discrimination on an individual level, which could result in unfavorable treatment at work, such as a lack of promotions and lower wages. For example, African Americans were paid, on average, $20k less than their white counterparts due to discrimination.

Emotional

People who experience discrimination in the workplace are demotivated and will produce less than they could. This will eventually make them want to leave their job, which leads to employers losing potential workers. A company that employs people from many different cultures often struggles with communication because everyone may speak different languages. 

Businesses that go through the effort of hiring diverse workers and teaching them how to communicate better with others understand this struggle and will be more equipped to manage it. The emotional effects of having a diverse workforce will boost productivity and make employees feel like they belong.

Environmental 

In recent years, economic development has shifted to a focus on the community. As a result, economic development professionals have begun to look at diversity as a critical component of economic growth. According to research, diverse communities are more likely to invest more money locally, stay healthier, and achieve higher levels of educational attainment. For these reasons, organizations increasingly seek a diverse workforce, resulting in better products, services, and overall success. These companies promote diversity within their ranks and work with suppliers who create an environment for employees from various backgrounds to thrive. 

The pursuit of diversity creates many benefits for the company, such as reduced turnover rates and increased productivity. However, there is still much work to be done if we want our communities to prosper equally. One area where progress needs to be made is increasing supplier diversity by implementing diversity initiatives in procurement. When you procure goods or services from minority-owned businesses, consider it more than just about race: consider the importance of gender, age, and disability status. Making sure you have a wide range of suppliers will help your business do well and strengthen your ties to the local community. 

Furthermore, these efforts will help create more opportunities for people who are members of underrepresented groups and foster better relations between different cultures. Similarly, when sourcing goods from minority-owned firms, don't forget to consider how this can contribute to enhancing socio-economic conditions for those marginalized groups. Undoubtedly, encouraging diversity can benefit everyone in the long run—including those outsides of affluent communities. It's easy to forget that countless families are struggling to make ends meet and whose lives would be dramatically improved by even a slight increase in income.

Final Thoughts 

Diversity initiatives are vital to growing as a business community and expanding our awareness of our society and the people in it. CenterPoint Group LLC is a certified minority owned business with operations that can deliver Tier 1 spending on everyday products and services. We can help you become more diverse, while reducing your costs and making your company more competitive. Beyond just cost savings, from greater diversity we can help your company to deliver greater social impact and make our communities stronger and healthier. 

We encourage you to get in touch with us to find out how we can work together to help both our clients and yours take advantage of the benefits of diversity in procurement.

 

 

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The information contained in this article is intended for general information purposes only and is based on information available as of the initial date of publication. No representation is made that the information or references are complete or remain current. This article is not a substitute for review of current applicable government regulations, industry standards, or other standards specific to your business and/or activities and should not be construed as legal advice or opinion. Readers with specific questions should refer to the applicable standards or consult with an attorney.

 

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