In this moment of social change, CRE leaders are recognizing a need to promote inclusivity and diversity in the industry.
For many property teams, the vendor supply chain is a crucial place to start. Due to the industry’s reliance on existing relationships, many qualified minority vendors are routinely shut out.
More than just an industry buzzword, embracing vendor diversity is an opportunity for property teams to make a positive social impact while strengthening their portfolios.
What is Vendor Diversity?
First things first: What does vendor diversity actually mean?
A diverse vendor/supplier is one that is at least 51 percent owned or operated by an individual that is traditionally underrepresented. Common types include small-business enterprises (SBEs), minority-owned enterprises (MBEs) and woman-owned enterprises (WBEs).
This definition has recently expanded to include businesses owned by LGBTQ owners, veterans, and owners with disabilities.
So, why make vendor diversity a priority? Read on to find out.
1. The Time is Now
Given the current social climate and spotlight on social injustice, it’s clear that we all have a role to play in empowering social change. This is especially true in relationships-based industries like CRE, where members of minority groups struggle to gain a foothold.
Property owners and operators should take the opportunity to fix these oversights and make CRE an equal playing field for qualified contributors.
2. Bottom Line Considerations
Ethical considerations aside, promoting vendor diversity can have a positive impact on your bottom line. Widening the vendor supply base to include more candidates can quickly improve service quality and drive down costs.
Additionally, a study by the Hackett Group showed that long-term supplier diversity programs generated 133% more ROI than businesses that only use suppliers they’ve used in the past. These benefits can go a long way towards getting reluctant higher-ups on board.
3. Retain Tenants
Today’s tenants expect to live and work in buildings that reflect their values. And in the digital age of information sharing, tenants can easily research their building management’s diversity initiatives. Showing prospective and current tenants proof of your commitment to inclusivity can set your portfolio apart.
4. Recruitment Advantage
In the same vein, today’s top talent is flocking to companies that practice corporate social responsibility. Now that millennials make up a significant portion of the workforce (35 percent), companies that make equality part of their everyday practices are primed to win out.
In fact, the State of Sustainable Supply Chains Report (produced by Ernst & Young and the UN Global Compact) found that a strong supply chain diversity program can be crucial to “winning the war for talent.” Notably, employees at these companies are more likely to stay longer and act as ambassadors for their companies.
Where to Start
Some companies view sound ethics and profitability as mutually exclusive. But smart property owners and operators know that vendor diversity can help them advance their portfolios.
Wondering where to start?
First, find a bid management solution that makes it easy to include a diverse array of vendors on every contract sent out for bid.
Prism Bid Management creates fair competition within the vendor supply chain. As a bonus, Prism also improves the quality of work and pricing while embracing diversity in the bidding process. Proposals can be easily compared and teams have visibility into each bid to report on diversity across the supply chain.
Learn more about Building Engines’ commitment to vendor diversity in our latest press release.
To see how Prism Bid Management can make your vendor selection process more inclusive, schedule a demo with our experts today.