In our hyperconnected world, supply chains face both challenges and disruptions that occur with alarming frequency. While organizations scramble to identify and implement solutions, a powerful, yet often overlooked, factor can help create a truly resilient supply chain: inclusion, equity and diversity (IED).

A recent study by the Society for Human Resource Management (SHRM), the SHRM Foundation and ASCM sheds light on the critical role IED plays in supply chain success. The research, which surveyed more than 1,400 supply chain and HR professionals, revealed a disconnect between the existence of IED initiatives and their perceived effectiveness. While a majority of companies with supply chain departments report having such programs (62% of supply chain professionals and 54% of HR professionals), only a fraction (29% and 20% respectively) believes them to be very effective. Interestingly, supply chain professionals themselves are more likely (45%) to perceive their company's IED efforts as successful. This highlights a potential gap between leadership perception and employee experience regarding the true impact of IED initiatives.

The research goes beyond identifying this gap to highlight the undeniable benefits of fostering an inclusive, equitable and diverse supply chain workforce. Here's how IED translates into a competitive advantage:

• Enhanced performance: Companies with strong IED practices report a significant edge over competitors. Supply chain managers from these organizations are 73% more likely to report their department outperforming rivals. This competitive advantage likely stems from the diverse perspectives and experiences that an inclusive workforce brings to the table, leading to more creative solutions and innovative approaches to problem-solving.
• Reduced turnover and increased talent acquisition: The lack of effective IED initiatives can lead to a revolving door of talent within the supply chain department. HR professionals at companies with weak IED efforts report significantly higher turnover rates compared to those with strong initiatives. Furthermore, companies struggling with IED are less likely to attract top talent from diverse backgrounds, hindering their ability to build a well-rounded workforce.
• Improved employee engagement and retention: A company culture that prioritizes IED fosters a sense of belonging and respect for all employees. The study found that supply chain workers who feel their company is very effective at achieving IED progress report higher job satisfaction and lower burnout rates. This translates to a more engaged workforce of people who are less likely to seek employment elsewhere. Retention rates are particularly affected for women and people of color, highlighting the importance of creating a welcoming environment for all.

The research also delves into the reasons behind the ineffectiveness of many existing IED programs. Here's what companies need to do to bridge the gap and unlock the true potential of IED in their supply chains:

1. Establish buy-in and involvement at the highest levels. Senior leadership needs to champion IED initiatives for them to succeed. The study found a clear correlation between leadership involvement and positive outcomes. When leaders are actively involved in setting goals, tracking metrics, and engaging in IED planning, the chances of success increase significantly. Conversely, companies lacking strong leadership support are much less likely to make progress towards their IED goals.

2. Create IE&D goals and hold leaders accountable for achieving them. Simply having an IED initiative is not enough. Clear, measurable goals need to be established, and leaders must be held accountable for achieving them. This accountability can come in various forms, such as tying IED progress to performance reviews, bonuses, or promotion opportunities for supply chain managers and executives. This incentivizes leaders to prioritize IED efforts and hold themselves, and their teams, accountable for progress.

3. Demand that supply chain be part of the conversation. Too often, IED efforts are siloed within the HR department. The research emphasizes the importance of integrating supply chain leadership into the company's broader IED strategy. When supply chain leaders are actively involved in companywide IED planning, they can tailor initiatives and goals specifically for the supply chain department, leading to more effective outcomes.

4. Be creative in how IED is applied across different business operations. Many companies focus primarily on recruitment as their sole IED strategy. While attracting diverse talent is important, it's just one piece of the puzzle. The study suggests employing a multifaceted approach. This could involve offering benefits that cater to the needs of diverse employees, such as childcare assistance or comprehensive parental leave options. Additionally, supporting employee resource groups that create a sense of belonging and empower employees to celebrate their identities can significantly improve employee engagement and retention.

5. Use training as a resource, not as the sole solution. While some controversy surrounds IED training, the research proves its value when combined with other initiatives. Training empowers leaders and managers to champion inclusive practices, treat all employees with respect, address specific challenges and develop strategies to create a more inclusive work environment. This helps supply chain organizations better focus on the practical application of training, equipping leaders to tackle specific issues and implement solutions for fostering inclusion.

Unleash the potential of IED

Take the first step toward maximizing IED in your supply chain by becoming an ASCM member. You’ll gain access to the latest insights into the importance of IED for strengthening supply chain resilience, as well as industry-leading research and content about how to implement it effectively. Join ASCM today!