Indigenous people make up roughly 3% of the population of Australia, and yet, despite this, they only represent as owners of roughly 0.06% of Australia’s businesses. Thankfully, this situation is changing, and as Australians become more aware of their social responsibilities, we hope to see an end to this disparity. Already, Indigenous businesses are growing at an incredible rate of 12.5% on average per annum, so we’re already beginning to see the effects of this social change.
To aid in this growth, the Government introduced the Indigenous Procurement Policy in July 2015. This policy aims to help stimulate Indigenous entrepreneurship, business, and economic development to help create a society in which Indigenous Australians can enjoy the same opportunities as non-Indigenous Australians.
In fact, Indigenous business procurement is becoming a requirement within both the government and corporate sectors, and we look forward to seeing this continue into other sectors as well.
By meeting your Indigenous procurement targets and supporting local Indigenous contractors, you’ll become an active participant in helping Close the Gap and creating a society based on equality for all. Indigenous procurement has benefits for all organisations and in this article, we’ll be exploring those benefits, as well as looking at ways of identifying the right Indigenous contractors for your next construction project.
What are the benefits of supplier diversity?
Engaging Indigenous contractors is more than just a ‘feel-good’ endeavour. In fact, supplier diversity will likely have significant and measurable long-term benefits for you too:
- Based on data from the United States, diverse supply chains have been found to be more sustainable, flexible, and innovative than supply chains that are lacking in diversity
- The Australian economy is constantly evolving. By supporting minority businesses, you can help to future-proof your business while investing in local communities
- Organisations who embrace supplier diversity have been found to spend an average of 20% less on their buying operations while generating as much as 133% greater returns on procurement polices
Within the construction sector lies a particularly strong opportunity to achieve Reconciliation Action Plan (RAP) targets and generate Corporate and Social Responsibility outcomes. Making up roughly 9% of the workforce, construction is the third largest sector by employment in Australia. In addition to this, a large proportion of people in this sector (67%) are working as sole traders. This means that ease of entry and the sheer number of jobs available within the industry are opening up many opportunities for Indigenous Australians to grow and thrive.
Choosing the right Indigenous construction contractor
With many companies simply looking to tick a few boxes, care must be taken to ensure that you’re engaging the right Indigenous businesses.
Here are some things to look out for to ensure that your decision is right for you, and the Indigenous community at large.
What is the difference between Supply Nation ‘certified’ and ‘registered’ businesses?
Supply Nation’s directory offers an extensive list of verified Aboriginal and Torres Strait Islander businesses. Currently, there are two recognised levels of Indigenous ownership:
- Registered: 50% or more Indigenous owned
- Certified: 51% or more Indigenous owned, managed, and controlled
By engaging a Supply Nation registered business, you can be confident that at least half of the owners are Aboriginal and/or Torres Strait Islander peoples. When partnering with a Supply Nation certified business, you know that Indigenous Australians hold the majority share, management, and control of the business just like BY Group which is Supply Nation Certified.
Additional actions for supporting Indigenous Australians
Sometimes it can be difficult to tell the difference between a company that’s genuinely dedicated to Indigenous affairs, and one that’s only ticking the boxes for self-gain. Here are some things to help you identify companies that are taking meaningful steps towards Closing the Gap.
Does the company engage in training and cadet programs?
Offering training, support, and work experience is an important aspect of ensuring that talented Indigenous Australians are being given the opportunities they need to thrive within the construction industry.
Training and mentorship programs take careful consideration and planning. If a business offers these programs, it’s likely because they are genuinely dedicated to empowering Indigenous Australians with the tools and skills they need to pursue their goals.
Cultural awareness training
You can learn a lot about a company from the way they educate their non-Indigenous staff on Indigenous matters. By fostering cultural awareness and teaching employees how to engage with Indigenous communities, these businesses are also preparing their staff to carry their mission of equality into their day-to-day life. This suggests a true commitment to the cause.
For the purposes of the Indigenous Procurement Policy, a joint venture is an incorporation of an Indigenous business with a non-Indigenous business. To qualify, the venture must:
- Be at least 50% cumulatively owned by an Aboriginal and/or Torres Strait Islander person(s)
- Be able to demonstrate at least 50% Indigenous control of the joint venture, and Indigenous involvement in the management of the joint venture
- Be for-profit in that the joint venture is able to distribute equity to its shareholders and not be a registered charity in its own right
- Be able to trade as a business in its own right
- Be registered in Australia
- Demonstrate commercial independence
Key considerations before engaging an Indigenous construction contractor
Just as when engaging any contractor, you need to conduct careful research to ensure that a company’s goals, priorities, and capabilities align with your business.
Here are some things to look into before engaging an Indigenous construction contractor:
Connections to the community
Supporting local communities means supporting businesses who actually work within the community. Whenever possible, seek out local contractors rather than calling in outside help.
Connections into Indigenous sub-contractors
Some businesses are more dedicated to supporting their local community than others. If the company works with sub-contractors, make sure they’re actively seeking out Indigenous sub-contractors from within the community.
You can learn a lot about a business based on what previous customers have said. Make sure to search for reviews and testimonials that confirm the company is experienced, qualified, and genuinely dedicated to Closing the Gap.
Staff development and support
It’s important to assess whether your chosen contractor is offering their Indigenous staff the support they need to produce their best work.
Perhaps they offer training programs for nurturing their local construction talent. A willingness to go above and beyond for Indigenous staff is a good indicator of a company who genuinely cares for their wellbeing.
Quality of work and capabilities statements
Many businesses put together statements outlining their capabilities, goals, and social and ethical commitments (and how they’re working to achieve them). These documents can serve as valuable resources for helping determine whether a company’s priorities are in-line with your own.
Areas of specialty
At the end of the day, engaging an Indigenous construction company that’s unfit for the job is going to end in unsatisfactory results for everyone involved. Make sure you assess the capabilities of the company and their areas of specialisation to ensure that they’re the right people to complete your project.
By engaging the right company, you can be confident that you’ll get the best work, which will also reflect positively on the Indigenous company who produced it.
How dedication to Closing the Gap is shaping BY Group
Guided by our mission to help Close the Gap, BY Group is committed to supporting our local Indigenous communities while offering meaningful and ever-growing opportunities that nurture Indigenous construction talent.
To that end, we engage in many programs for empowering our Indigenous brothers and sisters:
- 50% of our employees are Indigenous
- Through our cadet program, we offer on-the-job training, work experience, and mentorship for cadets who are undertaking a Construction Management Degree or Construction TAFE Course
- Six of our team members are currently in formal education
- We employ local experts within the communities we work in
5 simple steps to engaging an Indigenous construction contractor
- Engage local businesses to help support the community in which you’re working
- Refer to a quality resource such as Supply Nation’s directory to identify genuine Indigenous construction companies
- Evaluate the steps your contractor is taking to support their local community and help Close the Gap
- Assess testimonials, capabilities statements, and other key documents to ensure that the company’s goals, priorities, areas of specialty, and social targets
Make a difference: support your local Indigenous communities
Social procurement is here to stay, and it’s more than just ‘nice to have’. It’s already been proven that engaging Indigenous contractors has broad-reaching benefits and can even open up new opportunities that serve as the catalyst for your business growth.
By engaging Indigenous contractors and taking meaningful steps towards supporting your local Indigenous communities, you’re also driving a more flexible, sustainable and innovative business.
Meeting your IPP targets not only makes you instrumental in helping Close the Gap, it also helps to future-proof the economy and create a fair, equal, and strong Australia in which Indigenous and non-Indigenous companies can thrive.
For more information or to organise your next great project with a genuine, Supply Nation certified construction company, contact us on 8378 1952 or email us at firstname.lastname@example.org.