How Gender Bias in Procurement Can Hurt Your Bottom Line


Gender bias is not only a matter of ethical concern; it can also significantly impact business outcomes. Gender bias refers to the unequal treatment or opportunities provided to individuals based on their gender. In procurement, gender bias can manifest in various ways, such as biased supplier selection, gender stereotypes in procurement decisions, and a lack of support for women-owned businesses. This bias can seriously affect a company’s bottom line as companies that do not address gender bias risk losing out on the benefits of supplier diversity and might suffer legal and reputational damage, reduced efficiency and productivity, and missed opportunities. 


For example, consider a situation where a company is looking to hire a new supplier for a critical component of its product. The procurement team receives proposals from several suppliers, including a woman-owned business with competitive pricing and a track record of delivering high-quality products. However, despite the clear advantages of working with this woman-owned business, the procurement team ultimately chooses a male-owned supplier with higher pricing. Upon investigation, it is revealed that the procurement team is biased against working with female-owned businesses, viewing them as less capable than male-owned businesses.


In this example, gender bias affects the procurement team’s decision-making process, leading them to overlook a qualified and competitive supplier in favour of a supplier that is not as suitable. For companies, this bias can result in poor supplier diversity, legal and reputational risks, reduced efficiency and productivity and missed opportunities, causing poor financial performance. Here’s how: 


  • Poor Supplier Diversity: When procurement teams are biased towards certain suppliers, they limit the pool of available suppliers and miss out on the benefits of supplier diversity. Focusing on a narrow group of suppliers makes companies more susceptible to price fixing and other unethical practices, which can ultimately lead to higher costs and reduced profitability. 
  • Legal and Reputational Risks: Companies that fail to address gender bias in their procurement practices are at risk of legal and reputational damage. If a company is found to be sourcing from suppliers that engage in discriminatory practices or labour violations, it may face lawsuits and fines and cause damage to its reputation. This can lead to lost sales and lower profits.
  • Reduced Efficiency and Productivity: Gender bias in procurement can also lead to reduced efficiency and productivity. When procurement teams overlook diverse suppliers, they may miss out on innovative solutions and cost-saving measures. Additionally, companies with gender-biased procurement practices may be unable to attract and retain top talent, leading to lower productivity and higher turnover. 
  • Missed Opportunities: Companies that fail to address gender bias in procurement may miss valuable business opportunities. Diverse suppliers can offer unique products or services to help a company stand out in a competitive market. In addition, companies may also miss potential revenue streams and growth opportunities by not engaging with diverse suppliers. 


To promote gender equality in procurement and avoid the negative consequences of gender bias on financial performance, companies can take several steps. First of all, they should set targets and goals for supplier diversity and hold themselves accountable for meeting those targets. By adopting policies that promote supplier diversity, companies can increase the pool of suppliers, leading to more innovation, cost savings, and improved supplier relationships. Companies should also evaluate their procurement practices to identify any biases and take steps to address them. This can involve implementing unconscious bias training for procurement teams and establishing clear supplier evaluation guidelines. Providing adequate training that engages procurement teams is crucial to promote awareness and understanding of gender bias. It can also help foster a culture of inclusivity that values diversity and promotes equal opportunities for all. By taking these measures, companies can ensure that their procurement decisions are based on objective criteria rather than subjective biases. 


Besides this, companies should actively engage with diverse suppliers and create opportunities for them to compete for business. This can involve attending supplier diversity events, reaching out to minority and women-owned businesses, and providing resources to help diverse suppliers grow and succeed. In addition to engaging with diverse suppliers, companies should also consider working with NGOs such as WeConnect International to create more supplier diversity. These organisations can provide resources and support to help companies identify and connect with diverse suppliers, including minority and women-owned businesses. By partnering with NGOs, companies can gain access to a wider pool of potential suppliers, which can help to create a more diverse and inclusive supply chain. Finally, companies should regularly monitor the performance of their suppliers to ensure that they meet the company’s expectations for quality, cost, and sustainability. This can help identify issues early on and allow companies to take corrective action before any negative consequences arise.


By addressing gender bias and promoting supplier diversity, companies can increase innovation, reduce costs, improve supplier relationships, and create new growth opportunities. To achieve this, companies should set goals for supplier diversity, evaluate their procurement practices for biases, actively engage with diverse suppliers, and monitor supplier performance regularly. By taking these steps, companies can ensure that their procurement decisions are based on objective criteria and not influenced by subjective biases, ultimately leading to a more equitable and successful business.