Every economic downturn raises corporate budgeting questions that may affect business programs such as Supplier Diversity. While some may wonder if companies will continue their Supplier Diversity efforts due to tightening budgets, others feel that these efforts become more necessary during an economic slowdown. We are squarely in the latter camp.

COVID-19 will bring fundamental changes in the purchasing needs and behaviors of US organizations. Supplier Diversity teams bring the skills, knowledge, and networks that can help organizations better navigate these changes.

In CVM’s 2019 supplier diversity survey, 32 percent of respondents said they currently measure the economic impact of their supplier diversity program. This is an increase over the 19 percent who reported tracking that metric in 2017, indicating that more and more companies are recognizing the value of looking beyond spend, competitive advantage, and cost savings. 

Of course, all of those metrics are important, but they don’t tell the whole story.

With $310 billion in buying power, California’s insurance industry is the largest in the nation and the fourth largest in the world. In 2011, the State of California established the Insurance Diversity Initiative (IDI) focusing on the collection of diversity data amongst the state’s top insurance companies. From 2012 to 2016 alone, IDI insurers reported a 70 percent increase in spending with California diverse businesses.

For the third consecutive year, we at CVM, a supplier.io company, conducted our survey of supplier diversity professionals and diverse suppliers. This first-of-its-kind survey offers insight into what supplier diversity professionals experience within their own programs, as well as how diverse suppliers navigate the supplier diversity environment.

The full report also offers a broad view of the overall state of supplier diversity, but just like when you drill down into your supplier diversity metrics for more granular reporting, it's worth taking a closer look at these responses and how they relate to different areas of supplier diversity.

Supplier diversity is a business strategy that ensures a diverse supplier base in the procurement of goods and services for any business or organization. In other words, supplier diversity refers to a supply chain that incorporates businesses owned by diverse individuals or groups.

Though supplier diversity is a well-known industry best practice that speaks to the benefits of small and diverse businesses in a company’s supply chain, it is not the only strategy that does this. B corporations, social procurement, and economic development plans also highlight the need for including small and diverse businesses in the procurement process.  

Recently, a new term has gained momentum in the supplier development industry. Over the past few years, many organizations have adopted “anchor strategies” to invest in their local economy.