Supplier diversity programs have become familiar components of overall business thanks to heightened awareness around the benefits and advantages of developing more sustainable and inclusive supply chains. However, according to a report from R3, the idea that supplier diversity programs are a brand or PR exercise is still common.
There are also assumptions that lead to the thinking that working with smaller companies is a risk, and that people from minority and diverse backgrounds might not be able to deliver reliable service. Others bemoan the amount of financial resources and time required to manage supplier diversity pools.
“The truth is the value of supplier diversity programs runs deep into multiple facets of a company. Yes, it is important to overall corporate image and brand reputation, but it is also important from the perspective of talent management, regulatory compliance, sustainability in the supply chain (as we have seen from the pandemic), and competitive advantage,” said the report.
Taken from this perspective, a supplier diversity program is not just about procurement, and this needs to be communicated to stakeholders so they can understand the benefit of the success of such an initiative to their brand, business, and the communities in which their employees live and work in.
In a recent ANA survey (2021), 69% of US marketers said they had a supplier diversity program for marketing. This is up from 40% in 2020. As marketing procurement teams incorporate supplier diversity into existing agency and vendor partnership processes, unique advantages and challenges have emerged. For example, working with diverse suppliers encourages companies to adopt more efficient procurement way of working. But maintaining the supplier pool and measuring short- and long-term performance demands specialisation, and an ability to apply demographic data in a meaningful way.
In the US, 85% of companies have dedicated supplier diversity programs, and approximately 24% of diversity spend from those programs go to advertising and marketing. Categories of spend include agencies (most common, with highest spend), and companies delivering production, consulting, printing, research, media, and promotion services. In the next year, marketers are expecting to spend more of their diversity budgets on production companies (vs. agencies), and media companies like television and radio stations.
How can we begin the process in Asia?
When asked about developing such a programme in Asia, a spokesperson from R3 elaborated that developing a marketing supplier diversity program in Asia is as much about listening as analysing data.
“You need the numbers to measure performance, but data never tells the full story, especially in this context. Brands need to use both quantitative and qualitative information in decision-making about who they work with,” she said.
Agencies also need to be reminded that consumer-facing communications need to have a balanced portrayal of gender, ethnicities, and roles. For example, following research that found 40% of women do not identify with their portrayal, Unilever has committed to stop stereotyping women in its adverts with their key brands – including Knorr, Dove, Cif, and Surf. Agencies need to get on board with such initiatives very quickly,” she added.
To get the initiative rolling in Asia, she added marketers can start with the following steps:
- Decide early on what diversity metrics are important to your brand locally and regionally. Highlight this in the RFP. For example, in India it might be equal employment opportunities. In Vietnam, it might be training and mentorship.
- Be clear in your brief to agencies that diversity in their brand team is important. This includes the teams that work on the business, as well as the crew that is hired for backend production.
- Benchmark your agency partners locally and regionally to provide a fair comparison. Small changes to an agency in Singapore might be a big leap for an agency in Indonesia.
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