In response to the worldwide calls for social reform and racial
equality, companies are making plans to dramatically expand their
Supplier Diversity programs over the next few years, according to a
new study from The Hackett Group, Inc. (NASDAQ: HCKT).
According to The Hackett Group’s study, companies globally
dedicate 7.2% of their spend to diverse-owned business currently,
which is equal to $72 million per billion of total spend. But by
2025, companies expect a more than 50% increase in their diversity
spend goals, with an average target of 13% of their spend dedicated
to companies across a wide range of under-represented diversity
groups. While the list can vary globally, most organizations
include one or more of the following categories: minority-owned,
women-owned, veteran-owned, service-disabled veteran-owned,
historically underutilized business-zone located businesses,
LGBTQ-owned businesses, and indigenous businesses.
An infographic spotlighting findings from The Hackett Group’s
research is available on a complimentary basis, with registration,
at this link: http://go.poweredbyhackett.com/sdinfo2105sm.
“As a direct result of the worldwide social reform movement this
has become a board-level issue,” said Laura Gibbons, Senior
Research Director, Procurement Executive Advisory Programs for The
Hackett Group, who co-authored the study. “Companies are seeing
calls to action from consumers and employees to invest in areas of
environmental, social and corporate governance. It’s encouraging to
see that an increased focus on supplier diversity is a clear part
of this effort for most companies.”
The study reveals several pivotal changes and opportunities that
organizations must address to align with characteristics of
top-performing supplier diversity programs. Nearly 30% of
organizations say they are now setting formal diversity spend goals
for the first time, in response to the increased focus on social
reform and racial injustice in 2020. By 2025, top-quartile supplier
diversity organizations plan to spend 54% more of their total spend
with diverse-owned businesses compared to median organizations (20%
goal versus 13%).
Achieving these goals is ultimately dependent on the ability of
organizations to include diverse suppliers in their sourcing
opportunities. Currently, only 36% of procurement policies mandate
inclusion of at least one diverse supplier in each sourcing event.
Finding quality diverse suppliers will be a growing challenge for
supplier diversity programs as program goals and ambitions rise.
Organizations will also need to actively develop diverse suppliers.
Currently, only 44% of companies allocate funds specifically for
supplier development activities while another 39% of companies plan
to do so.
Organizations are also becoming more inclusive and intentional
with the diversity groups their programs target, with 53% of
companies reporting a greater focus on spending with specific
diversity groups. Nearly a third of all tier-1 diversity spend
currently goes to women-owned business, the study found, with
another 13% going to black-owned businesses, 11% to Asian
Indian-owned, and 9% to Hispanic-owned.
While women-owned businesses are currently the top diversity
category globally, major spending increases are expected across
different diversity groups. To name a few, 77% of study respondents
said that they are planning an increase in spend with black-owned
businesses, 66% with LGBTQ-owned businesses, 65% with women-owned
businesses, 62% with Hispanic-owned businesses and 63% with
service-disabled veteran-owned businesses.
Finally, the study offered seven areas of focus for companies
hoping to expand their supplier diversity programs. These included:
ensure enterprise alignment through collaboration with activities
in other related areas; invest in supplier diversity, with both
budget and dedicated headcount; join supplier diversity
organizations; invest in the development of diverse suppliers;
ensure high-quality data and reporting to measure program
performance; measure program ROI by going beyond diverse spend
totals; and create policies to encourage success.
“Starting, growing or improving an established supplier
diversity program is top of mind for many procurement programs
around the world,” said Tarun Puri, Senior Director at The Hackett
Group and a co-author of the study. “But to truly succeed, it’s
critical for companies to set the right scope for program
activities and ensure that they have an adequate level of
support.”
More than 100 large global and U.S. companies across an array of
industries participated in The Hackett Group’s 2021 Supplier
Diversity study. Median global revenue was $11.8 billion.
About The Hackett Group
The Hackett Group (NASDAQ: HCKT) is an intellectual
property-based strategic consultancy and leading enterprise
benchmarking firm to global companies, offering digital
transformation including implementation of leading enterprise cloud
applications, workflow automation and analytics that enable digital
world class performance.
Drawing from our unparalleled IP from nearly 20,000 benchmark
studies with the world’s leading businesses – including 93% of the
Dow Jones Industrials, 91% of the Fortune 100, 80% of the DAX 30
and 55% of the FTSE 100 – captured through our leading benchmarking
platform, Quantum Leap®, and our Digital Transformation Platform
(DTP), we accelerate best practices implementations.
More information on The Hackett Group is available at:
www.thehackettgroup.com, info@thehackettgroup.com, or by calling
(770) 225-3600.
Cautionary Statement Regarding “Forward Looking”
Statements
This release contains “forward looking” statements within the
meaning of Section 27A of the Securities Act of 1933 as amended and
Section 21E of the Securities Exchange Act of 1934, as amended.
Statements including without limitation, words such as “expects”,
“anticipates”, “intends”, “plans”, “believes”, seeks”, “estimates”
or other similar phrases or variations of such words or similar
expressions indicating, present or future anticipated or expected
occurrences or outcomes are intended to identify such forward
looking statements. Forward looking statements are not statements
of historical fact and involve known and unknown risks,
uncertainties and other factors that may cause the Company’s actual
results, performance or achievements to be materially different
from the results, performance or achievements expressed or implied
by the forward looking statements. Factors that may impact such
forward looking statements include without limitation, the ability
of Hackett to effectively market its digital transformation and
other consulting services, competition from other consulting and
technology companies who may have or develop in the future, similar
offerings, the commercial viability of Hackett and its services as
well as other risk detailed in Hackett’s reports filed with the
United States Securities and Exchange Commission. Hackett does not
undertake any duty to update this release or any forward looking
statements contained herein.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210617005083/en/
Gary Baker, Global Communications Director - (917) 796-2391 or
gbaker@thehackettgroup.com
Hackett (NASDAQ:HCKT)
Historical Stock Chart
From Jun 2024 to Jul 2024
Hackett (NASDAQ:HCKT)
Historical Stock Chart
From Jul 2023 to Jul 2024