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CVM Supplier Diversity Blog

What We Learned About Diverse Suppliers: Women-Owned Businesses

Woman Diverse Suppliers

Women-owned businesses are an undeniable, impressive contributor to the American economy. No examination of the current state and future path of supplier diversity would be complete without assessing how women’s business enterprises (WBEs) drive innovation, growth, and opportunity for themselves, the companies they partner with, the people they employ, and the communities they support.

For the second consecutive year, CVM Solutions conducted a far-reaching survey of supplier diversity programs and the suppliers themselves, resulting in the 2018 version of our State of Supplier Diversity reports. We received responses from 380 diverse suppliers, 51 percent of which identified as women-owned businesses. The answers these organizations gave were again fascinating. Here are some highlights from our findings:

87 percent of WBEs are certified as such

Of the 194 women-owned businesses that took our survey, 168 were formally certified as such by the WBENC or another agency, and another seven (about 4 percent) were in the process of certification. Our annual survey tends to draw businesses that are active in supplier diversity, so a number this high isn’t much of a surprise. This result is a few percentage points down from last year, but the decrease doesn’t suggest a trend—certification is still regarded as an imperative for securing the best potential opportunities with companies and their supplier diversity programs.

WBEs skew toward small businesses

Our survey found that 44 percent of respondents have 10 or fewer employees, and just 15 percent employ more than 100 people. This result is generally consistent with the business sizes of all survey respondents, across all diversity categories. Interestingly, the percentage of WBEs with 11-100 employees was higher than minority business enterprises (41 percent to 33 percent). An inference from this data is that WBEs, which tend to be more white-collar, don’t need to become large businesses to thrive.

Access 2018 State of Supplier Diversity Reports »

61 percent of WBEs have been in business for at least 11 years

This finding is consistent with last year and remarkably similar to MBEs, which also came in at 61 percent on the survey. Only 16 percent of WBE respondents have been in business for fewer than three years, reinforcing the fact that successful women-owned businesses can sustain and build upon their success for the long term.

WBEs are less likely to pursue government contracts

Our survey discovered that 61 percent of WBEs pursue government contracts, which was the lowest percentage of any diversity category except for LGBTQ respondents. However, this stat is on par with the overall average of 62 percent. Moreover, this number is up an encouraging nine percentage points from last year.

Supplier diversity programs are flocking to WBEs

Only 18 percent of WBE respondents are not designated as diverse suppliers by a corporation. This is slightly better than the average for all respondents (19 percent) and outpaced MBEs (21 percent). Most women-owned businesses (32 percent) are working with 1-3 supplier diversity programs, and an impressive 18 percent are partnering with 10 or more companies.

Networking, RFPs are the most common ways WBEs find partners

We asked respondents to identify the top three ways they find supplier diversity partners. Interestingly, WBEs tended to buck the trends we were seeing with other diversity groups. Networking topped the list at 75 percent, as opposed to 73 percent for non-WBEs. That difference isn’t significant, but the disparity with RFPs (requests for proposals) was more pronounced: 49 percent of WBEs selected that option, compared with 42 percent for other businesses. After the top two, WBEs next chose registration sites (41 percent, compared with 50 percent of non-WBEs), emails (40 percent compared with 45 percent), and cold calls (39 percent, higher than the 32 percent for other businesses).

WBEs cross diversity categories

Diverse suppliers identifying with more than one category are not unusual, and women-owned businesses are no exception. Our report discovered that 58 percent of WBE respondents hold multiple diversity certifications, and 21 percent hold three or more. Looking at the other categories, 37 percent of WBEs also identify as minority-owned businesses, and 34 percent as small businesses.

As consumers, WBEs are strong believers in supplier diversity

We asked this provocative question of our survey participants:

As a consumer, does an organization with a supplier diversity program influence whether or not you will buy from them?

For WBE respondents, 31 percent claimed that a supplier diversity program’s existence would have a strong influence on their buying decisions, and another 42 percent cited a slight influence. These numbers were consistent with non-WBE responses and cemented a basic tenet in our industry: supplier diversity matters to consumers, to entrepreneurs, and to the community.

Which of these findings was the most surprising to you?

2018-state-of-supplier-diversity-reports

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For over a decade CVM's mission has remained unchanged: lead the transformation of Supplier Diversity program management and support Supplier Diversity programs. CVM helps corporate supplier diversity programs in every stage of their evolution; from those that are just getting started, to the most advanced, world-class programs. Equipped with unparalleled data intelligence, superior technology and expertise guidance, businesses can effectively establish and advance their Supplier Diversity initiatives.