It's not just tokenism, women-run firms perform better
Would you go out of your way to hire a company run by women?
In the post-feminist age, on International Women’s Day, it seems like a strange question to ask. Depressing as it is, it seems that despite often being more efficient and cheaper, businesses run by women remain at a disadvantage in obtaining contracts. But let’s not review the usual, depressing statistics regarding inequality.
My point today is that it makes solid business sense to do business with women — and it’s something Americans appear to recognize better than Canadians. I could be wrong, but I have an inkling that Canadians pride themselves on having more tolerant and progressive attitudes than Americans.
However, when it comes to promoting women-owned companies, the U.S. is way out in front. Not only has the federal administration decreed that five per cent of all contract dollars awarded each year go to small businesses run by women, a huge number of American corporations have also embraced the strategy.
"It’s been a very intentional program for a number of years now, and has stepped up in the Obama administration," says Mary Anderson, president of WEConnect Canada, an organization that certifies businesses run by women, so that they can benefit from programs that give under-represented groups a leg up.
"In Canada, there’s no stick from a government perspective," she says. In other words, no one is mandating how government or corporations seek out and hire suppliers.
In this case, that's wrong.
But before we get into a discussion of whether these kinds of diversity programs are brilliant or misguided, let me point out that there is a case to be made that pursuing diversity actually makes business sense.
Indy Sian is in charge of procurement for Telus, one of the Canadian companies Mary Anderson tells me is on the ball with regards to diversity. When asked why this is the case, Sian first tells me about Telus' desire to "give back to the community we live in."
That’s wonderful, of course, but I’m curious to hear if there are any benefits to the bottom line. "We do a lot of data back-up and storage, and we have a lot of geographical locations, from Vancouver to Quebec, so we found a local diverse supplier that was a women-led organization," says Sian, explaining that the usual big corporate suppliers would charge extra for travel time and a variety of other costs.
"If you go to a diverse supplier that’s local, you have now reduced your cost of doing business." He says Telus has set benchmarks for contracting from under-represented suppliers, but he isn’t at liberty to say exactly what they are.
"What I can tell you is when I presented at a conference on this subject, a number of other large firms said we’ve achieved in one year what has taken them two or three years to do. And we’ve done it by measuring our success with diverse procurement, and putting that on the score card for when our executives are evaluated."
Research done a few years back by an Atlanta business consulting firm called Hackett Group showed that when companies "focus heavily" on buying from diverse suppliers, they reap significant savings. "Such companies spend on average 20 per cent less on their buying operations and have procurement staffs half the size of their peers whose supplier programs aren't as diverse," the Wall Street Journal reported in an article about the research.
Often small firms are hungrier and will undercut their competitors on price, even while offering the same level of quality or service.
As well, there are brownie points to be earned when a firm can say they have diversity policies. That can give them the edge when bidding on business. "Anything that you can do to get ahead that’s legal and ethical, I’m for it," says Chandra Clarke, owner of Scribendi Inc.
Her Chatham-based company provides on-line proof-reading and editing services in 118 countries, and employs 200 people. Clarke has been named Canadian top exporter of the female persuasion, and is on the Top 100 list of woman entrepreneurs, as ranked by Profit Magazine.
She writes a blog to encourage women in business, and recently posted an article about the benefits of getting certified as a women-owned operation, through groups such as WEConnect.
But she hasn’t pursued certification herself.
"There are some people for whom it doesn’t make financial sense," she says. "As with anything, you have to go through a cost/benefit analysis."
Clarke likely isn’t the ideal candidate for WEConnect. She typically sells to academic clients who use English as a second language. WEConnect’s Mary Anderson explains that certification works best for those who are chasing contracts with large corporations or government.
Worth the effort
They can get help finding the right decision-maker within a large organization, something that often takes a lot of time and phone calls. Meighen Nehme fits that description. The owner of an employment agency called The Job Shoppe, with offices in Windsor, London and Kitchener, she regularly finds staff for big companies. So she’s applied for certification with WEConnect.
"I spoke to a couple of members in my area that have had great results from being a part of this organization," says Nehme, who was a runner-up in the Miss Canada beauty pageant several years ago, and is now a mother of three as well as an entrepreneur.
"They commented on education and guidance, and they were introduced to companies that they may have not been able to meet otherwise. I decided to give it a try for the year and see the results myself." But Canada has a ways to go, Anderson says, particularly when it comes to federal and provincial governments signing on to this type of affirmative action.
Her group met with Public Works Canada in January, and is working with its Office of Small and Medium Enterprises. "We’re starting to see a willingness to adapt," she says.
Given both the social and economic benefits of working with diverse groups — and that includes members of the LGBT community, who can also be certified, and people with an ethnic background — it’s an approach that should be getting more attention here in Canada.