Diversity and Staffing: How Getting Your Supplier Diversity Certificate Can Help Your Business

As a staffing firm owner, you are constantly looking for ways to boost your growth. One avenue to consider, if you qualify, is to become certified as a diverse-owned business.

Part of my role at Advance Partners is to talk with clients about the potential benefits of supplier diversity certification. Among our 500+ clients, many have taken the step to become certified and have experienced positive growth as a result.

In this blog, I will share my knowledge about Supplier Diversity and why it is important. I will cover a brief history of Supplier Diversity, the value of certification, qualifications to become certified, and available resources.  And, most importantly, how to determine if becoming certified as a diverse-owned staffing firm is right for you, and how it can help grow you staffing business.

WHAT IS SUPPLIER DIVERSITY?

A business is considered supplier diverse if it is at least 51% owned and operated by an individual or group that is part of a traditionally underrepresented community. Some common underserved groups that classify as diverse suppliers are small-business enterprises (SBEs), minority-owned enterprises (MBEs), woman-owned enterprises (WBEs) and/ or other minority groups such as LGBQT, veterans, and/ or owners with disabilities. In order for a business to record and report diverse supplier spend, its supplier must be certified through a third-party certification company like Advance Partners. A lot of the application is verifying that you are who and what you say you are.

The Supplier Diversity program concept was first introduced in the 1950s. Around that time, the Small Business Administration was created to ensure that small businesses were given a fair and equal opportunity to bid on and be awarded federal contracts. Through the 60s and 70s, in conjunction with the Civil Rights Movement, executive orders and federal legislation made sure that minority-owned firms were included in opportunities to bid on government projects and those of major corporations supplying the government.

These days, the diversity certification categories have expanded to include women, LGBT+, veteran, service disabled, disabled, and small businesses.

WHO QUALIFIES FOR DIVERSITY SUPPLIER CERTIFICATIONS?

• MBE – Minority Business Enterprise – US Citizen who is 51% or greater owner of the business, and at least one quarter Asian-Indian, Asian-Pacific, Black, Hispanic or Native American.;
• WBE – Women’s Business Enterprise National Council – An independent business concern that is at least 51% or greater owned by one or more women who are US Citizens or Legal Resident Aliens.;
• WOSB – Women Owned Small Business – Government woman-owned business certification;
• SBA 8(a) – Business must be a Small Business with a demonstrated potential for success, 51% or greater owned and operated by an economically disadvantaged individual who is a US Citizen.,
• SDVOB – Service Disabled Veteran Owned Business – 51% or greater owner and person holding the highest position in a Small Business with a service-connected disability documented by the Department of Veteran Affairs or Department of Defense.
• VOSB – Veteran Owned Small Business – 51% or greater owner and operator of a Small Business with Discharge Form DD214.
• LGBT – Lesbian, Gay, Bisexual and Transgender – The business must be 51% or greater owned, operated, managed and controlled by an LGBT person or persons who are US Citizens or Legal Resident Aliens, exist independent of any non-LGBT business, have principal place of business in the US, and been formed as a legal entity in the US.
• BEPD – Business Enterprise Owned by People with Disabilities. Business must be 51% or more owned by one or more persons with disabilities.

At Advance Partners we can assess your qualifications for diversity certifications. Get a free assessment to find out how we can support your diversity goals.

WHY IS SUPPLIER DIVERSITY IMPORTANT?

Jeanne Michaelides, Director of Client Experience at Advance Partners, shares some thoughts on supplier diversity programs and why you should register for the upcoming ASA) webinar on September 20th.

These days, the diversity certification categories have expanded to include women, LGBT+, veteran, service disabled, disabled, and small businesses.

WHAT IS THE VALUE OF CERTIFICATION?

Becoming a certified diverse-owned supplier offers a lot of opportunity to grow your staffing firm business. Companies with strong supplier diversity programs track spend and many have corporate mandated goals, so becoming certified can open doors to providing staffing services to these corporations.

Obviously, staffing firms vying for new business should always lead with their qualifications, experience, and value proposition. But, if a certified diverse-owned staffing supplier is competing with another firm for business with a company that cares about supplier diversity, the certified firm definitely has a valuable edge to win the business.

WHY DO COMPANIES CARE?

Companies doing business with the Federal, state or local governments often are required or otherwise incented to have documented Supplier Diversity program goals. Today, most large companies in the private sector as well as government agencies care strongly about supplier diversity.

Corporations also state three main reasons for their participation in supplier diversity:

• Corporate social responsibility. They want to support the small, independent businesses that drive our economy.
• Alignment with corporate culture and workforce inclusiveness. Small businesses are typically nimbler and more innovative and deliver a higher level of personalized service than their large corporate counterparts.
• Customer requirements. Companies’ customers want to do business with companies who support their communities.

DOES SUPPLIER DIVERSITY ONLY MATTER IF YOU WORK WITH THE GOVERNMENT?

It is a common belief that supplier diversity only counts for government contracts, but that’s not true. Government agencies do have set-asides for diverse suppliers, but Supplier Diversity programs also exist within most large private and public corporations, to name a few:

• Automotive manufacturers like American Honda, BMW, Mercedes Benz, Toyota, etc.
• Consumer goods companies like P&G, The Kroger Co., Kellogg’s, Coca Cola, Starbucks, etc.
• Shipping companies (FedEx, UPS)
• Oil and gas (BP, Exxon-Mobil, Chevron)

You can check WBENC and NMSDC websites for a comprehensive list of corporate sponsors.

SHOULD ALL ELIGIBLE STAFFING FIRMS BECOME CERTIFIED?

I believe there is good value to becoming certified for most staffing firms that qualify. If it fits your business model and you’re qualified, it is an avenue that can help you grow.

However, it does take a commitment of both time and money to make the application and then to attend regional and national events to network. And not every firm’s client base is a great fit.

If you are a strong, woman-owned staffing firm but you only do business with small, local entities that don’t participate in supplier diversity, then you have to make a business decision: Does this make sense for me?

Likewise, there are certain industries where a higher percentage of business is spent with certified diverse-owned suppliers. For example, the automotive, information technology and healthcare industries account for more than half the spending by the Billion Dollar Roundtable, a group of large corporations that spend more than $1 billion each annually with certified diverse-owned suppliers.