Construction Inclusion Week: Day 3

What is Supplier Diversity?

Group of construction workers with orange hi vis vests standing on jobsite with hardhats: Daily Topic Supplier Diversity Construction Inclusion Week

What is Supplier Diversity?

Supplier diversity is a business practice that refers to the inclusion of businesses owned by diverse individuals or groups in the procurement of goods and services.

Diversity overview covering definitions of diverse supplier, minority owned business enterprises (MBEs), Women-owned business enterprises (WBEs), Small-business enterprises (SBEs), and Lesbian, Gay, Bi-sexual, Transgender, Queer (LGBTQ+)

Why is it important?

Supplier diversity is critical to the growth and success of the construction industry, and organizations that embrace supplier diversity do so for reasons that are meaningful from both a moral and business standpoint:

  • Supplier diversity is vital to the sustainability of the construction industry. The demographics of the United States are rapidly changing, and our industry must also change in order to grow and thrive. From our workforce to our customers to our supply chain and trade partners, every aspect of our industry is becoming more diverse, and the future of construction will be very different from the past. Supplier diversity represents a necessary turning point in how we operate as an industry.
  • Supplier diversity strengthens the economic health of local communities. Small and diverse businesses live and work in the communities they represent and are essential to the development and stability of local economies. Supplier diversity also supports job growth and fosters entrepreneurship among those who are often underrepresented in the construction industry. Investing in diverse-owned suppliers is an investment in our communities.
  • Having a more inclusive procurement strategy broadens the pool of potential subcontractors, suppliers, and vendors. This encourages competition, which can improve quality and lower costs. In addition, having a more diverse network of suppliers and trade partners makes an organization more agile and resilient, enhancing performance and profitability.
  • Supplier diversity is increasingly important to existing and potential customers, including private and nongovernmental owners. Customers of all industries are becoming more informed and intentional when it comes to sourcing products and services, and the construction industry is no different. Utilizing small and diverse businesses demonstrates a company‚Äôs commitment to corporate responsibility and ethical business practices.
  • Supplier diversity programs help distinguish an organization when it comes to hiring and retaining top talent. In the face of workforce shortages across the industry, many construction companies are expanding efforts to recruit young women and people of color. Studies have shown this pool of potential talent is more likely to choose an employer with a demonstrated commitment to diversity and to equitable businesses practices like supplier diversity.
  • Advancing supplier diversity is a substantial step companies can take to combat inequality and discrimination. Large organizations can lead by example and use their economic and social influence to support small and diverse businesses that are essential to the survival of the construction industry.

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