Companies in the supply chain sector employ more people of color (PoC) at every level of the organization when the company is publicly held as opposed to privately owned, according to a survey by Gartner Inc. and the Association for Supply Chain Management (ASCM).
The study comes as increasing numbers of firms hire executives to lead their diversity, equity, and inclusion (DEI) efforts to hire a more diverse workforce, following a national social reckoning triggered by protest marches in the wake of the 2020 murder of George Floyd by Minneapolis police officers.
Growing efforts to employ and promote logistics professionals from minority and disadvantaged groups also come as many companies struggle with widespread labor shortages caused by pandemic disruptions, the rise of easily available gig work, and a wave of Baby Boomer retirements.
Gartner and ASCM took the pulse of those trends through their recent study, which featured a survey of 384 supply chain professionals located mostly in the U.S., Canada, and Europe, conducted in December 2021. The results showed that people of color make up 35% of the overall supply chain workforce in publicly held companies and 13% of vice presidents. Yet for supply chain organizations in privately held companies, people of color make up 30% of the overall workforce, and 7% of vice presidents.
“We see a similar dynamic when we compare global companies – with a revenue of over $5 billion – to their smaller peers,” Dana Stiffler, vice president analyst with the Gartner Supply Chain practice, said in a release. “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,” ASCM CEO Abe Eshkenazi, said in the study. “What we need to do is completely close the gap – so that all organizations, public and private, are places where racial and ethnic minorities, women, LGBTQ, physical ability and others have equal opportunities.”
The study did show signs of slow progress. Survey results revealed that 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, many of those same companies are lacking a critical piece—specific DEI projects or initiatives defined as part of the division's corporate goals. “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,” Stiffler said. “Nearly all (93%) of respondents in large, global organizations report that they have DEI goals – compared to 37% of their peers in smaller organizations. Large, global organizations are also 2.5 times more likely to have targeted DEI initiatives.”
Without improvements to those metrics, many companies in the supply chain sector could soon find their labor shortage problems growing more acute, the researchers warned. “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,” Eshkenazi said. “Public or private, large or small – companies who invest in DEI initiatives will fare better.”
Gain insights about diversity, equity and inclusion (DEI) practices in supply chain organizations from the new report from ASCM and @Gartner_SC. Access at https://t.co/pe3UA77NLZ #ascm #research #supplychain #DEI pic.twitter.com/O8PNdD95kZ— ASCM (@ascm_hq) June 15, 2022