is a robust evaluation tool that companies can use to create a roadmap for diversity and inclusion efforts. It consists of over 150 questions created by the HACR Research Institute (HRI) based on years of research and engagements with Fortune 500 companies regarding their diversity and inclusion practices and the methods and metrics used to evaluate their progress. The HACR CII assesses Corporate America’s Hispanic diversity and inclusion efforts in four key areas: Employment, Procurement, Philanthropy, and Governance.
The conversations the HACR Research Institute (HRI) has had with participating companies throughout the years it has been conducting the HACR CII, continues to reveal many interesting themes and trends. To this end, the theme of this year’s report is the power of harnessing support networks and the important role support networks play in the success of diversity and inclusion policies and practices in Corporate America. The data collected from the HACR CII ultimately provides us with a “snapshot” of Corporate America’s Hispanic inclusion efforts business practices and strategies of participating companies around our four pillars of economic reciprocity: Employment, Procurement, Philanthropy, and Governance.
Today, we will focus on some of the key takeaways from the Procurement pillar of the 2020 HACR CII report and what they tell us about the continued progress and challenges faced by Corporate America in their supplier diversity efforts.
WHAT DOES THE PROCUREMENT PILLAR MEASURE?
In short, the Procurement pillar of the HACR CII evaluates the impact of a company’s supplier diversity strategy. It looks at things like change in spend with Hispanic suppliers, Tier 2 supplier spend, and accountability of supplier development initiatives. Although many companies are starting to recognize that supplier diversity is a business imperative, there remains much work to be done in this particular area. By providing opportunities to Hispanic-owned businesses and suppliers, Corporate America has the power to promote the economic development of the local communities surrounding these businesses. It’s a win-win opportunity for everyone.
WHAT DID WE LEARN?
Based on the aggregate outcomes from the 2020 HACR CII survey, some of the major areas that Corporate America should continue to focus on include:
- Spending with Hispanic suppliers: The average Hispanic supplier spend and representation has changed little since HACR first started collecting data on Hispanic suppliers in 2009. This year, Hispanic supplier representation accounted for less than one percent of all suppliers (.83 percent to be exact). What’s more, 61 percent of participating companies reported spending less than one percent of their total spend with Hispanic suppliers.
- Leveraging Hispanic ERGs to help inform procurement opportunities: Resources such as Hispanic ERGs, financial assistance programs, and dedicated diversity and inclusion procurement teams remain underutilized when it comes to procurement strategy. Only 54 percent of companies reported leveraging their Hispanic ERGs to better inform their procurement opportunities.
There is great work being done in this area. 91 percent of participating companies reported having a strategic plan for supplier diversity that is reviewed regularly at their organizations. In fact, there was also an increase in the number of companies that reported holding Tier 1 suppliers accountable for supplier diversity (67 percent).
Overall, companies should continue developing their procurement tracking and evaluation capabilities in order to better evaluate the effectiveness of their supplier development initiatives, as well as continue to work on leveraging their internal network resources at every level throughout the supply chain. In doing so, they will unlock competitive advantages for their organization as well as for the Hispanic community.
CONGRATULATIONS TO THE 2020 HACR CII COMPANIES THAT ACHIEVED 5-STARS IN PROCUREMENT
|Edison International||Toyota Motor North America|
|Ford Motor Company||Walmart Inc.|
|General Motors||The Walt Disney Company|
|Humana||Wells Fargo & Company|
|Intel||Wyndham Destinations Inc.|
To learn more about procurement trends and best practices, download a copy of the 2020 HACR Corporate Inclusion Index report here.