Best Practices in Managing Diversity Programs | DCR Workforce Blog

Best Practices in Managing Diversity Programs

diversityNo one doubts the benefits offered by supplier diversity programs, but the importance of having an effective implementation plan cannot be stressed enough. Companies must ‘walk their talk’ – or fail to inculcate the importance of running a successful diversity program into their organizations and business processes.

If your supplier diversity program is not quite meeting your spend targets or achieving the expected supplier diversity, you may consider adopting some of the following best practices, which could transform both your Tier I and Tier II programs.

  • Start by reviewing your historical data on using diverse suppliers.  If the numbers are low, find out why. Do you need to develop more suppliers? Are you providing the right support and mentoring?
  •  Set realistic goals for the future, factoring in plans for improvement.
  • Prior to sourcing, determine potential areas of use for diverse suppliers and locate suppliers who can meet those requirements.
  • Identify the executive sponsor who regularly communicates and demonstrates the company’s commitment to the diversity program. If possible, include diversity goals into the performance plans of the senior leadership team.
  • Alter the contract procurement process to automatically include consideration of Tier 1 and Tier 2 diverse suppliers.
  • Maintain a database of diversity suppliers, integrating the information into the purchasing process.
  • Establish special measures which enable you to track diversity spend. Institute additional efforts to improve supplier diversity performance in case of a shortfall.
  • Partner with institutions and organizations which can provide strategic assistance to further your program goals.
  • Train every stakeholder on the importance of achieving the program targets. Educate your employees in how to effectively interact with and manage people in a diverse workplace. Encourage employees to continue to learn new skills in dealing with and managing people. Emphasize the impact that diverse clients will have upon the success or failure of your business.
  • If convinced of a supplier’s capabilities, boost their confidence and commitment by entering into longer-term contracts; motivate the small suppliers to scale up and invest better for the longer term.
  • Many certified diverse suppliers are small companies that may not have access to resources available to larger competitors. Institute supplier development or mentoring programs to assist these suppliers.  This will be a win-win for both of you.
  • Make sure that your Tier II program is effective and results-oriented, and capable of adding value to the Tier I supplier’s performance and competitive edge.

If you are a federal prime contractor, aim for the Federal Acquisition Regulation (FAR) award fee incentive.  Increase your use of diversity certified sub-contractors as Tier II suppliers to meet supplier diversity goals.

FAR regulates and controls the way the government acquires goods and services from federal contractors.  It assesses contractors on implementation of socioeconomic contract goals. Fully document and create an audit trail of your efforts to build a diverse supply base, , as the information  would come in useful when undergoing a FAR audit. Failing a FAR audit could be detrimental to the interests of your company, in many ways as detailed below:

  • The revenue payments due to you from the government may be affected.
  • You may be removed as the prime contractor on current projects.
  • You may be barred from winning any further contracts from the Government.
  • If the non-compliance were to be linked to a deliberately false or fraudulent claim, it could invite civil and criminal penalties, affecting the very survival of your organization.

Inclusion of minority, woman-owned and other diversity businesses in your supply chain is just good business.  It contributes to customer satisfaction, technology innovation, access to talent and insight into minority markets.  Regularly review your supplier diversity program, communicating its successes throughout your organization.  Look for ways to continually enhance the program.   As you take steps to incorporate a successful program into your business ecosystem, the business gains will immediately become apparent.

The content on this blog is for informational purposes only and cannot be construed as specific legal advice or as a substitute for competent legal advice. They reflect the opinions of DCR Workforce and may not reflect the opinions of any individual attorney. Do contact an attorney for advice specific to your issue or problem.
Lalita is a people/project manager with extensive experience in operations, HCM and training and development across industries like banking, education, business consulting, BPO and information technology. She believes in a dynamic approach to life and learning as change is the only constant.