The DiversityInc Top 10 Companies for Supplier Diversity

Also read: DiversityInc Top 50, DiversityInc Specialty Lists

Supplier diversity is increasingly important to companies as the need for innovative vendors who connect to their communities increases. As certification for minority-owned, women-owned, LGBT-owned and disability-owned vendors has become standardized—and supplier-diversity results have been audited—the validity and usage of these vendors has been on the uprise, even in tough economic times.

DiversityInc notes a strong and growing correlation between philanthropy directed at multicultural organizations (nonprofits aimed primarily at Blacks, Latinos, Asians, American Indians, LGBT people and people with disabilities) and supplier diversity. Suppliers—like employees and customers—want relationships with companies that value them and support their groups.

The companies on this top 10 list all have rich histories of supplier-diversity and community connection and all have been elevating their games this year. They were selected based on their responses to the Supplier Diversity section of The 2010 DiversityInc Top 50 Companies for Diversity® survey.

To get tips on setting up and expanding an effective supplier-diversity program, read the story from our recent diversity-management learning session in Washington, D,C., by Bill Hartwig, vice president of global supplier relations and international procurement for Marriott International, No. 7 on The 2010 DiversityInc Top 50 Companies for Diversity list. And attend our Nov. 8–9 diversity-management learning session, also in Washington, D.C., to get real-life supplier-diversity best practices.

Consider these facts about this top 10 list:

• All of their CEOs personally sign off on supplier-diversity goals and metrics, compared with 86 percent of the DiversityInc Top 50
• They average 47 percent of their philanthropy going to multicultural organizations, compared with 38 percent for the DiversityInc Top 50
• They spend an average of 13 percent of their Tier I (direct contractor) spend with minority-owned business enterprises (MBEs) and 11 percent with women-owned business enterprises (WBEs)
• They all audit their supplier-diversity numbers, integrate supplier-diversity into their overall business-plan goals, and have the head of supplier-diversity report to the head of procurement
• They all include diversity metrics in their RFPs

Here are the top 10 and a fact about why each is so strong in supplier diversity:

No. 1: McDonald’s

Also No. 6 in The DiversityInc Top 10 Companies for Blacks; No. 10 in The DiversityInc Top 10 Companies for Latinos; one of DiversityInc’s 25 Noteworthy Companies in 2010

The fast-food giant spends almost half of its procurement for Tier I contractors with MBEs and more than a third with WBEs. McDonald’s provides financial assistance for its suppliers and carefully tracks metrics on supplier diversity.

No. 2: Xerox Corp.

Also No. 48 in the DiversityInc Top 50

A longtime supplier-diversity leader, Xerox spends 60 percent of its philanthropic budget with multicultural nonprofits, 13.7 percent of its Tier I procurement with MBEs and 22.7 percent with WBEs.

No. 3: IBM

Also No. 8 in the DiversityInc Top 50; No. 2 in The DiversityInc Top 10 Companies for Asian Americans; No. 10 in The DiversityInc Top 10 Companies for LGBT Employees; No. 1 in The DiversityInc Top 10 Companies for People With Disabilities; No. 1 in The DiversityInc Top 10 Companies for Global Diversity

A very strong company in all areas of diversity, IBM holds procurement executives accountable for supplier-diversity goals and links compensation to those goals. The company has strong relationships with several supplier-diversity organizations, including the Women’s Business Enterprise National Council (WBENC), the National Gay and Lesbian Chamber of Commerce (IBM is a founding member) and the Hispanic Chamber of Commerce.

No. 4: Bank of America

Also No. 9 in the DiversityInc Top 50; No. 4 in The DiversityInc Top 10 Companies for Recruitment & Retention; No. 9 in The DiversityInc Top 10 Companies for Executive Women; No. 2 in The DiversityInc Top 10 Companies for LGBT Employees

The only bank to make this list, Bank of America donates 50 percent of its philanthropic endeavors to multicultural nonprofits. Bank of America offers diverse suppliers financial assistance, including loans, equity financing to increase capital, accelerated payments, payroll services, accounts-receivable financing and financial education.

No. 5: Ford Motor Co.

Also No. 44 in the DiversityInc Top 50

A long-time national supplier-diversity leader and one of the first companies to really expand subcontractors to include MBEs and WBEs, Ford spends more than 10 percent of its Tier I procurement with MBEs.

No. 6: AT&T

Also No. 3 in the DiversityInc Top 50; No. 6 in The DiversityInc Top 10 Companies for Recruitment & Retention; No. 2 in The DiversityInc Top 10 Companies for Blacks; No. 9 in The DiversityInc Top 10 Companies for LGBT Employees

Another historic supplier-diversity leader, especially its SBC predecessor, AT&T has a deep commitment to community development, with 59 percent of its philanthropy going to multicultural charities. AT&T has a dedicated supplier-diversity department with a staff of 16 full-time people.

No. 7: HP

Also No. 8 in The DiversityInc Top 10 Companies for Asian Americans; one of DiversityInc’s 25 Noteworthy Companies in 2010

This company has had a rich history of helping its suppliers grow and prosper. Fourteen percent of its Tier I procurement goes to MBEs and 6 percent goes to WBEs. The company calculates savings it has accrued as a result of its procurement of MBEs and WBEs.

No. 8: Cox Communications

Also No. 21 in the DiversityInc Top 50

With 47 percent of its philanthropy going to multicultural nonprofits, Cox has built strong community relations. The company has a strong system of measuring the efficacy of its supplier-diversity program.

No. 9: Marriott International

Also No. 7 in the DiversityInc Top 50; No. 1 in The DiversityInc Top 10 Companies for Blacks; No. 6 in The DiversityInc Top 10 Companies for Executive Women

Another long-time supplier-diversity leader that has built several hotels using primarily MBEs, Marriott allocates 44 percent of its philanthropic budget to multicultural charities.

No. 10: PG&E

Also No. 3 in The DiversityInc Top 10 Companies for Latinos; No. 2 in The DiversityInc Top 5 Regional Utilities

The California utility allocates 15 percent of its Tier I procurement to MBEs and 13 percent to WBEs. The company has formal training for its suppliers.