Regular post diversity

The Importance of Supplier Diversity in MSP Programs

As our nation’s climate has recently shown a strong sensitivity toward diversity, equity, and inclusion in the workplace, more organizations are employing strategies focused on diversity within their supply chain. The heightened calls for social justice around the world have impacted the role of Managed Service Programs (MSP) in diversity candidate sourcing and tracking in the contingent space. In this post, we explore the importance of supplier diversity in an MSP program.

What is a supplier diversity program?

Supplier Diversity Program is defined as a “proactive business program which encourages the use of minority-owned, women-owned, veteran-owned, LGBT-owned, service-disabled veteran-owned, historically underutilized business, and Small Business Administration (SBA)-defined small business concerns as suppliers.” A business that is at least 51% owned and operated by an individual—or group of persons—who are part of a traditionally underrepresented or underserved group is classified as a diverse supplier. Some of the most common types of diverse suppliers are businesses owned by minorities, women, LGBTQ+ persons, veterans, and individuals with disabilities. Businesses in historically underutilized business (HUB) zones and small businesses are also classified as diverse suppliers.

Why is supplier diversity important in an MSP program?

Ability to reach underrepresented candidates

The first step to building a diverse contingent workforce is to diversify your staffing suppliers. Diverse suppliers understand the challenges that underrepresented social groups experience and have developed local recruitment portfolios that capitalize on community-based organizations—giving them the ability to market the MSP clients’ open positions. Who is better suited to understand the skills and needs of a veteran returning to the workplace than a fellow veteran? Veteran-owned staffing suppliers take pride in assisting veterans to return to the workforce.

Provides economic opportunity for minority and disadvantaged communities

Compared to their non-minority counterparts, minority-owned businesses earn less revenue due to inequities in education and access to funding. According to the Census Bureau, Black people comprise approximately 14.2 percent of the U.S. population. However, Black businesses comprise only 2.2 percent of the nation’s 5.7 million employer businesses—firms with more than one employee. Black businesses bring in average revenues of $1 million, compared to $6.5 million for non-Black businesses. Diverse suppliers often source candidates from the community in which they work. By partnering with a diverse supplier, you help create economic opportunities for local communities represented by the supplier and support their growth. While helping your organization expand your talent pool in areas that otherwise could be overlooked, you’re making a positive impact on underrepresented and underserved communities.

Improves your business outcomes

Diverse suppliers are often small which gives them the ability to be more flexible and responsive than a larger staffing supplier—which allows them to quickly meet clients’ changing demands. They typically have less overhead—giving them the advantage of offering more competitive pricing—without sacrificing quality. In addition, working with experts who have unique outlooks brings a higher level of creativity to the MSP program.

Why partner with an MSP to improve supplier diversity?

A capable MSP provider will help your organization create a robust diversity supplier program that provides high-quality service that’s competitively priced, reliable, and adds value through strategy development, targeted sourcing, and reporting of diversity data. As a WBENC-certified women’s business enterprise, Broadleaf has embedded diversity within our corporate culture and business strategy. We leverage our years of expertise to actively source certified small and minority-owned businesses that can provide competitive, high-quality services to meet our clients’ diversity requirements.

Looking to increase the value of your MSP and generate cost savings in the process? Check out these five steps to strategic MSP cost reduction.

Interested in deploying an MSP program of your own? Learn about what your organization can do to prepare for the implementation of a contingent workforce program and check out our digital MSP assessment tool to see if an MSP is right for you.

This blog was written by Broadleaf’s Senior Director of Organizational and Supplier Development Joseph O’Shea.