Supply Chain Organizations at Public Firms Lead In Diversity

June 15, 2022

Representation of people of color (PoC) in supply chain organizations is much higher at every level when the company is publicly held, according to a survey by Gartner and the Association for Supply Chain Management (ASCM).

The Supply Chain Diversity, Equity and Inclusion (DEI) Survey of 384 supply chain professionals, conducted in December 2021 mostly in the U.S., Canada and Europe, found that people of color make up 35% of the overall supply chain workforce in publicly held companies and 13% of vice presidents. For supply chain organizations in privately held companies, people of color make up 30% of the overall workforce, and 7% of vice presidents (see Figure 1).

“We see a similar dynamic when we compare global companies – with a revenue of over $5 billion – to their smaller peers,” said Dana Stiffler, vice president analyst with the Gartner Supply Chain practice. “Looking at manager level and above, the big players have much stronger pipelines when it comes to representation of people of color.”

In addition, the pay gap is narrower between different racial and ethnic groups for publicly held organizations. “While all supply chain professionals earned higher pay across the board in 2021, it’s encouraging to see that the gap for people of color has narrowed – at least for public enterprises,” said ASCM CEO Abe Eshkenazi, CSCP, CPA, CAE. “What we need to do is completely close the gap – so that all organizations, pubic and private, are places where racial and ethnic minorities, women, LGBTQ, physical ability and others have equal opportunities.”

Figure 1: People of Color in Supply Chain Organizations: Publicly Held Companies Have Stronger Pipelines

Source: Gartner (June 2022)

Goals, Actions and Accountability are Key to DEI Success

According to the survey, more than 75% of supply chain organizations consider gender and ethnicity/race in their DEI strategies and objectives. This is a significantly higher rate than in 2020, when 59% of respondents considered gender, and 62% considered ethnicity/race. However, while three-quarters of supply chain organizations report that they focus on some dimension of diversity, only 40% are working on specific DEI projects or initiatives.

“Supply chain organizations in global and/or publicly held companies are showing that DEI success is dependent on the supply chain having its own DEI goals and supply chain-led initiatives, as well as measures in place to hold supply chain leaders accountable for reaching goals. Nearly all (93%) of respondents in large, global organizations report that they have DEI goals – compared to 37% of their peers in smaller organizations,” Stiffler said. “Large, global organizations are also 2.5 times more likely to have targeted DEI initiatives.”

DEI Investments Focus on Recruitment, L&D and Employee Engagement

Recruitment, learning and development (L&D), and employee engagement are the types of DEI initiatives most often seen in supply chain organizations. More than 75% of respondents have those initiatives in place.

“Recruitment initiatives could be the adoption of diverse interview panels or diversity referral programs; L&D initiatives might include diversity mentorship programs or inclusive leader training. Employee engagement initiatives often center around employee resource groups (ERGs) or community volunteering,” Stiffler added.

Fewer than half of supply chain organizations are implementing initiatives focused on specific benefits – such as elder care benefits or financial wellness programs – pay equity or advancement and progression of minority groups. This may pose challenges in retention of underrepresented groups if they do not feel that they receive an equitable work experience or opportunities for role progression. However, 32% of supply chain organizations state recruitment is the most effective initiative, followed closely by L&D (28%) and employee engagement (24%).

“With no let-up in sight for this continued state of disruption, companies who fail to secure the talent necessary to keep global supply chains running sustainably and profitably, will no doubt find themselves in the red,” said Eshkenazi. “Public or private, large or small – companies who invest in DEI initiatives will fare better.”

“Supply chain organizations continue to cite progress in DEI at all levels of leadership – from frontline management to the C-suite. The combination of goals, actions and accountability is the best formula for DEI success, and the supply chain organizations that embrace this formula – right now mostly global, publicly held companies – are on the right path. Supply chain leaders in smaller, privately held organizations should follow their example,” Stiffler concluded.