Perhaps the most important aspect of supplier diversity is the diverse suppliers themselves. Thanks to these key vendors, companies can realize the economic, operational, and reputational advantages of a diverse supply chain. At the same time, diverse suppliers are given additional opportunities to thrive and show they can deliver excellence as well as, if not better than, their larger, non-diverse counterparts.
Here at CVM Solutions, we set out to learn more about diverse suppliers—their challenges, their triumphs, their concerns, and their outlook for the future. So, we asked them, via a comprehensive survey conducted earlier this year. Our 2017 State of Supplier Diversity Report—Diverse Suppliers compiled an impressive 277 responses from vendors across a range of industries and diversity categories. The answers we received provide a fascinating look at where supplier diversity is and where it’s going, but from the supplier’s point of view. Here are some of the key takeaways (and for a deeper dive into the data, download the full report):
Most of the survey’s respondents employ fewer than 100 workers.
Small businesses dominated our survey, with 82 percent of respondents employing fewer than 100 employees. (Note, not all respondents of this size necessarily identified themselves as a certified small business.) Companies with fewer than 10 employees comprised 41 percent of our responses, followed by 11-50 employees at 29 percent, and 51-100 and 101-500 each at 12 percent. Only five respondents had more than 2,000 employees.
About 5 in 6 respondents have been in business for more than four years.
An impressive 84 percent of respondents are well established, in business for at least four years. Women-owned businesses led all diversity categories in this area, with 85 percent of respondents’ companies at least four years old, followed by minority-owned businesses at 81 percent. These numbers suggest that organizations should be confident that most diverse suppliers they hire are solid companies with a long track record of success.
An overwhelming majority of responding suppliers are certified.
Ninety percent of MBEs and WBEs are certified as such by their corresponding certification agencies. We expected this number to be high but were a bit surprised it was this high. Other diverse supplier categories enjoyed great numbers, including all 16 LGBT-owned businesses in our survey reporting they were certified.
We draw two conclusions from these results. First, the top diverse suppliers realize the value of certification, and because the respondents in our survey are so well established, they’ve had time to become certified.
Second, certified diverse suppliers are active in their respective online communities and are more likely to participate in a survey such as ours. The bottom line: Diverse suppliers reap plenty of benefits from certification, and those lacking it may find themselves at a disadvantage.
Networking events are the top way diverse suppliers find partners.
We asked diverse suppliers to provide their top three ways that they find partners. Networking events led the way, cited by 66 percent of respondents, which further underscores the importance of certification. Registration sites came in second at 51 percent, followed by RFPs at 46 percent and emails at 39 percent.
As consumers, supplier diversity matters to diverse businesses.
When answering this question, “As a consumer, does an organization with a supplier diversity program influence whether or not you will buy from them?” 48 percent of respondents said they were strongly influenced and another 36 percent said they were slightly influenced. Supplier diversity isn’t just a way to increase a client base—it’s an important philosophy for most diverse business owners.
More than half of respondents seek out government contracts.
Fifty-nine percent of the diverse suppliers we talked to said they actively pursue government entities as clients. Veteran-owned businesses, SBAs, and MBEs were the most likely to seek such contracts.
The data we’ve highlighted here only scratches the surface of what we discovered from our survey. And we just didn’t talk to diverse suppliers—download the companion report, 2017 Supplier Diversity Report—Supplier Diversity Programs, to read the opinions of 145 supplier diversity professionals we interviewed.