What You Need to Know about Diverse Suppliers

Many American businesses now consider supplier diversity programs an absolute need. Stakeholders and policymakers are actively seeking out small firms, businesses owned by minorities, and enterprises in underprivileged areas. Diversity programs are having a notable impact on supply chains, particularly for businesses that have established relationships with reliable suppliers.

What Is a Diverse Supplier? 

A company must have at least 50% of its owners and employees from a historically marginalized or underrepresented group to qualify as a diverse supplier. The most common types of businesses are those that are either small business enterprises (SBEs), minority-owned (MBEs), or woman-owned (WBEs). Conversely, the concept of diversity has evolved to include businesses owned by members of marginalized communities, such as the LGBTQ+ community, veterans, and those with disabilities.  

Why Is Supplier Diversity Important? 

The importance of having a wide pool of suppliers is considerable and, to some degree, depends on how your business functions. For example, it may be beneficial for your organization to pick a variety of suppliers to save money. If, on the other hand, your organization is engaged in promoting social responsibility from all angles, it may make sense.  

Consider how having a diverse selection of suppliers may boost economic value. A broad range of organizations may encounter obstacles throughout the start-up phase. They may also face challenges such as access to finance and the ability to network with others. However, implementing a profitable and effective supplier diversity strategy may be able to resolve these issues.

A certified diverse supplier is often a small business that contributes to the growth of the communities in which it operates. They do this by giving towns that would not otherwise get such advantages the chance to generate employment, raise wages, and increase tax revenue. 

Main Types of Diverse Suppliers 

In the United States, more than 15 categories are used to classify diverse suppliers. They include the following: 

  • Disabled Owned: A company in which people with disabilities own, manage, or control at least 51% of the shares. 
  • LGBT Owned: A company in which LGBT people make up at least 51% of the ownership, operators, managers, or control stakeholders. 
  • Minority Owned: A company in which members of a minority group who face social and economic disadvantages make up at least 51% of the ownership, management, and control positions. 
  • Women Owned: A company in which women hold at least 51% of the ownership, management, or control positions. 
  • Veteran Owned: A company whose veterans hold at least 51% of the ownership, management, or control positions. 

How Do HR and Business Leaders Contribute to Supplier Diversity? 

Business managers are responsible for determining which businesses, regardless of diversity, a company should or should not collaborate with. A company’s human resources department may engage diversity, equality, and inclusion (DE&I) consultants to give expert advice on these decisions as well as the organization’s overall supplier diversity program. There is also the chance that corporations will hire dedicated DE&I units that work with HR and business leaders to achieve supplier diversity targets. 

Different types of businesses and executives at purchasing organizations may provide prospective relationship opportunities. When such opportunities emerge, having staff members trained in diversity, equality, and inclusion (DE&I), including supplier diversity, may help improve relations with these businesses while also providing diverse corporate leaders with the required skills and support. For example, you may provide them with information on how to get certified or how to retain contacts for future chances. 

Going Beyond Tokenism 

Supplier diversity is more crucial now than ever before. Businesses must, however, exercise vigilance to ensure that they are not just launching a supplier diversity program to satisfy their stakeholders.  Companies must do more than just check a box to indicate that they are considering a diverse supplier for a certain kind of procurement decision to achieve genuine supplier diversity and the benefits that come with it. 

To have a substantial impact, supplier diversity must be an integral part of the procurement process and, ultimately, the company’s whole culture. 


There are many reasons why a certified diverse supplier is essential. For starters, it ensures that the supplier has a diverse staff, ensuring that the products and services are accessible to everyone. The second advantage of certification is that it demonstrates that the provider has worked to become more inclusive and attentive to the needs of minority groups. Finally, accredited vendors often give better customer service than those who are not qualified. This is because accredited vendors can work with a variety of organizations and understand their needs. 

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