Report Says Social Procurement Benefits Both Community and Business   

Businesses engaging in social procurement have a “competitive advantage” and can more easily address specific social needs, leading to greater environmental, social and economic value, a new report says.

 The Australia Post whitepaper, released this week, outlined key reasons social procurement was gaining traction, as well as some of the challenges it faced.

Two key reasons for its growing popularity, according to the paper, were changes to government policy and higher rates of workforce engagement among younger generations, as more people were expecting “their employers to behave ethically and sustainably”.

This also comes as the Victorian Andrews government on Tuesday announced a social enterprise funding boost of more than $2 million to help drive growth within the social sector.    

Social Traders managing director David Brookes, said one of the main benefits of social procurement was that it wasn’t “charity, or a goodwill gesture”, but rather “a legitimate commercial arrangement”.

He said this year’s Social Enterprise Conference, held in Melbourne this week, was “critical” in helping buyers understand “the huge social impact by including social enterprise in their procurement decisions”.

“Social Traders estimates that for every $100,000 dollars spent on social procurement, 1.5 jobs are created for disadvantaged people, including those excluded from the mainstream labour market,” Brookes said.

CFO of Australia Post, Janelle Hopkins, said social procurement could help organisations to “have a huge impact in changing the community they operate in”, particularly for Indigenous communities.   

“For example, Indigenous businesses offer 70 times the average rate of employment opportunities for Indigenous jobseekers,” Hopkins said.

Hopkins also said there was more to social enterprises than just offering “employment opportunities to marginalised groups”.     

“They also provide economic value for our country… there are nearly 12,000 Indigenous businesses contributing around $6.5 billion to the Australian economy every year,” she said.

Co-founder and managing director of ARA Indigenous Services, Michael O’Loughlin, spoke to Pro Bono about their partnership with Australia Post and said it “meant they were able to employ more and more Indigenous people around the country”.   

ARA are employed to clean Australia Post offices across Australia, and O’Loughlin said while it was a great opportunity as an Aboriginal-owned company, it was also important to “remain competitive”.

“It’s outstanding that we offer roles and responsibilities to more and more Indigenous people around the country… but it’s our reputation on the line, so we need to make sure we do a good job,” O’Loughlin said.

He said while there have been “rocky roads” at times, having an “honest” dialogue with their client, and ensuring they employed “good people” was key.

“If we hire good people, we generally get good results, and I think Australia Post has the same attitude as well,” he said.

Hopkins said there were issues that needed to be addressed in social procurement, such as changing the mindset around how money was spent.

“Procurement has historically focused on price, quality and risk, so we have had to look at how our procurement process can adopt a new mindset that also considers social and environmental outcomes,” she said.

“We hope this paper will provoke discussion around how social procurement can be a regular fixture in business activity.”