Half of supply chain organizations have formal DEI targets

Almost half of supply chain organizations have formal diversity, equity and inclusion (DEI) targets in place, with specific management goals linked to them. This is according to research by analyst firm Gartner. Moreover, the number of supply chain organizations with DEI goals has increased significantly, from 27% in 2022 to 49% in 2023.

According to Dana Stiffler, Distinguished VP Analyst at Gartner, the expectation was that supply chain organizations would take a step back in pursuing DEI goals due to increased scrutiny and economic pressures. “Instead, our data showed substantial progress, with a sharp increase in the presence of underrepresented races and ethnicities at every level of the supply chain. The main driver of this progress is an increase in accountability through formalized management targets,” says Stiffler.

For the survey, 314 supply chain professionals with active involvement in their organization’s DEI initiatives were surveyed in Europe and North America. The survey took place from September to October 2023 and was conducted among organizations with an annual turnover of at least $250 million.

The survey data showed significant DEI improvements, including the fact that the percentage of full-time employees of underrepresented races/ethnicities in the assessed supply chain organizations increased from 32 to 48%. Compared to the 2022 survey, the average representation of talent of underrepresented races and ethnicities is now 1.5 times higher.

Attracting new talent

The data showed a strong alignment between DEI and broader business objectives. Respondents with formal or general DEI targets gave as reasons for this: attracting new talent (68%), attracting and retaining new employees (64%), improving business performance (58%), attracting customers (48%), reflecting and supporting local communities (44%), and attracting investors (40%).

“The recruitment focus on DEI initiatives is crucial as a higher percentage of supply chain workers are actively looking for a new job,” Stiffler comments. “The focus on engagement and retention is also good as supply chain workers are less likely than other occupations to be highly engaged or have a high intention to stay.”

Gap between saying and doing

Besides formal targets, a second reason for an increase in DEI targets was a greater emphasis on actual initiatives in this area. In 2022, although 75% of supply chain organizations said they were focusing on some dimension of diversity, only 40% reported actually working on specific DEI projects or initiatives. Gartner calls this difference between intention and action the ‘say-do gap’.

“While almost the same percentage of organizations focused on one or more aspects of DEI in 2023, we saw a much higher percentage of supply chain respondents working on specific DEI projects and initiatives with measurable results. A jump from 40 to 73%,” adds Stiffler. “In 2023, the say-do gap decreased to almost half of what it was in 2021. The link between tangible action and improved DEI results seems to be increasingly clear.”

Top 4 DEI initiatives

The top four DEI initiatives invested in were Learning & Development (L&D), fringe benefits, employee engagement, and recruitment. In terms of effectiveness, employee engagement and L&D topped the list. This differs from previous studies, where inclusive leadership and recruitment were the most effective.

Although the main results of the survey point to progress in diversity efforts, 43% of respondents reported that employee turnover among underrepresented talent is somewhat or significantly higher than that of the rest of their workforce. According to Gartner, the data therefore suggests that talent pipelines need to be further evaluated and strengthened to maintain the progress made.