Inclusion, Equity and Diversity Boost Supply Chain Performance, Research Shows
Alongside a growing focus on inclusion, equity and diversity (IE&D) in the workplace, a seemingly endless number of complications have tormented global supply chains in recent years. A new report released by the Association for Supply Chain Management (ASCM), Society for Human Resource Management (SHRM) and the SHRM Foundation, titled “The Power of IE&D in the Supply Chain: Unlocking Resilience and Growth,” takes an in-depth look at the correlation between IE&D effectiveness and supply chain departments.
The report, which surveyed over 1,400 supply chain managers, supply chain workers and HR professionals from companies with supply chain departments, sought to gain a better understanding of how IE&D impacts business as well as employees.
At a Glance
To give some perspective, 62% of supply chain managers and 54% of HR professionals report having IE&D initiatives at their company. However, just 29% of managers and 20% of HR professionals believe their organizations’ IE&D-related progress is ‘very effective.’
In addition, 73% of supply chain managers at companies with very effective IE&D initiatives say that their supply chain department performs somewhat or much better than their competitors’, compared to just 44% of managers at companies with ineffective IE&D practices. “These differences highlight a significant relationship between strong IE&D practices and superior supply chain performance,” writes the report.
IE&D and Workplace Culture
Many findings in the report correlate effective IE&D in supply chain departments with lower turnover and higher worker satisfaction.
Supply chain workers at companies with ineffective IE&D practices in their department are 4.5 times more likely to report they often feel burned out. They are also more than four times more likely to report they often felt like they wanted to quit in the last six months, and this number increases when looking at certain groups, with women at six times more likely and workers of color at 10 times more likely.
Conversely, supply chain workers at effective companies are 7.5 times less likely to report they will search for a new job outside of their company in the next year, suggesting that IE&D progress in supply chain departments increases employee retention.
“Strengthening IE&D initiatives is essential to developing and retaining exceptional talent, which can result in more resilient supply chains,” says ASCM CEO Abe Eshkenazi. “When organizations do the opposite—scale back or eliminate IE&D — it leaves them vulnerable to staff shortages, resignations and production delays, ultimately hurting the bottom line.”
IE&D effectiveness also extends to workplace recommendations, with HR professionals, supply chain managers and supply chain workers less likely to recommend their company’s supply chain department to various groups when IE&D is ineffective. “This sentiment is strongest regarding recommendations to members of the LGBTQ+ community and those with disabilities,” according to the report.
IE&D and Leaders
The report highlights how company supply chain leaders’ attitudes have a wide-ranging effect on IE&D accomplishments and workplace development.
“Two major barriers to IE&D progress in supply chain departments are a lack of leadership buy-in and insufficient investment in IE&D strategy and initiatives,” according to the report.
Only 33% of supply chain workers who think their senior leaders don’t take IE&D progress seriously said it is unlikely they would voluntarily quit their jobs in the next 12 months; that figure more than doubles to 68% when compared to workers who agree their leaders care about IE&D.
Also, workers are less likely to feel engaged when their direct supervisor never or rarely communicates the value of IE&D to employees. “In other words, when IE&D is treated like a priority, workers notice and respond,” writes the report.
Only 36% of HR professionals say supply chain leaders are held accountable for meeting IE&D goals, and workers at companies with ineffective IE&D find the biggest barrier to progress is a lack of leadership accountability.
When leaders are held accountable for IE&D targets, supply chain managers report those leaders are more than three times more likely to promote sponsorship and mentorship opportunities to underrepresented employees and almost four times more likely to hold other leaders accountable for IE&D progress.
Additionally, supply chain managers report that their departments are 11 times more likely to be effective when the leaders are involved in company-wide IE&D initiatives.
Comprehensive Strategies
The aforementioned statistics make a compelling argument that IE&D initiatives have a positive effect on worker experiences and bolster supply chain performance. The report outlines the following five methods to change perceptions and accomplish goals surrounding IE&D in supply chain departments:
- Establish buy-in and involvement at the highest levels.
- Create IE&D goals and hold leaders accountable for achieving them.
- Demand that supply chain is part of the conversation.
- Be creative in how IE&D can be applied across different business operations.
- Use training as a resource, not as the sole solution.
"Inclusion, equity and diversity are not just moral imperatives; they are strategic advantages in supply chain management,” says SHRM President and CEO Johnny C. Taylor Jr. “An inclusive approach fosters a sense of belonging and commitment among all stakeholders, from employees to suppliers, which can significantly improve morale and productivity.”
