As staffing firms look for ways to boost growth, one avenue to consider for qualified owners is becoming certified as a diverse-owned supplier. Advance Partners, a wholly owned subsidiary of the Paychex Corp., provides funding, technology and support services to the contingent workforce industry, includes certified diverse suppliers among its more than 500 staffing firm clients. Jeanne Michaelides, director of client experience for Advance Partners, explains the importance of supplier diversity, how to determine if participating in supplier diversity is right for you, and how becoming a strong certified diverse-owned firm can help you grow your staffing business.

Q: What is supplier diversity, and how did it get started?

Supplier diversity began in the late 1960s and early 1970s in conjunction with the Civil Rights Movement in the United States. Through executive orders and federal legislation, minority-owned firms were included in opportunities to bid on government projects and those of major corporations supplying the government.

The certification system was designed to enable large corporations to add small businesses to their supply chain. These big corporations wanted to make sure that small suppliers could play in their world — that they understood the language and expectations of the large company. They also wanted to have confidence that the small suppliers could perform and would be there for the long term. Many of them work with multiyear contracts, so they wanted to make sure the small firms would be viable partners.

Today, most large companies in the private sector as well as government agencies care strongly about supplier diversity. The diversity certification categories have expanded to include women, LGBT, veteran, service disabled, disabled, and small business, as well as minority-owned firms.

Q: For staffing firms, what is the value in becoming a certified diverse-owned supplier, and how can it help business growth?

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

Q: Who qualifies as a diverse supplier?

The basic requirement is that the company must be 51% or greater owned and actively operated by the person seeking certification. A lot of the application is verifying that you are who and what you say you are. Categories of diverse suppliers include those owned by women; minorities; veterans or service-disabled veterans; lesbian, gay, bisexual or transgender, and disabled. Small businesses are also included in many companies’ programs.

Q: Why do corporations and government agencies care about doing business with certified diverseowned suppliers?

Corporations 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.

Q: Staffing firm owners do not always pursue diverse-owned certification even when they qualify. What can be the consequences of this?

A few years ago, we experienced a challenging few months when one of our strongest woman-owned staffing firm clients called in a panic. She had a $5 million staffing contract at risk because, although she was a qualified woman-owned business, she was not yet certified.

Rewind to the year before when I met with her to explain the importance of becoming a certified woman-owned supplier. She said she understood and wanted to pursue the application for certification, but the truth is she simply didn’t see the value and thought her business was doing just fine without it. She started the application, but without strong motivation and an understanding of the value of certification, she did not follow through.

On the day she made the panicked call to me, she was poised to begin a $5 million multi-year contract but learned that her customer was bought out and the new owning company required fulfillment by a certified diverse-owned supplier. She had to prove certification or lose the contract.

We were able to facilitate a happy ending by working with her and Certify My Company [a supplier diversity consultant], while assuring her customer that her application was in process and she would be certified before the contract start date. We just made it!

Pursuing Certification

Questions to ask when deciding whether becoming certified is
the right decision for your business:

  • Does your firm qualify as diverse-owned or a small business?
  • Does your prospect list include companies that care about
    supplier diversity?
  • Do you serve customers in the top industries for supplier
    diversity spend?
  • Do you have the motivation, time and resources to develop as
    a diverse supplier?

For additional questions, please contact Jeanne Michaelides at

Q: Does diverse-owned certification only matter if a staffing firm fulfills government contracts?

It’s 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 exist within most large private and public corporations, such as automotive manufacturers (American Honda, BMW, Mercedes Benz, Toyota), consumer goods companies (P&G, The Kroger Co., Kellogg’s, Coca Cola, Starbucks), shipping companies (FedEx, UPS), and oil and gas (BP, Exxon- Mobil, Chevron) just to name a few, as well as government agencies.

Check WBENC and NMSDC websites for a comprehensive list of corporate sponsors.

Q: What resources are available to help staffing firms become strong, certified diverse-owned suppliers?

Two of the top associations that manage certifications for minority-owned and woman-owned suppliers also offer many resources to help you become involved in the supplier diversity community after certification.

They are the National Minority Supplier Development Council and the Women’s Business Enterprise National Council. It’s important to commit time and energy by participating in regional and national events, attending conferences and trade shows, and demonstrating to the sponsoring corporations that you are a strong, committed supplier.

In addition to these associations, we often recommend that our staffing firm clients engage a reputable supplier diversity consultant as a resource to not only become certified, but understand how to build a strong program. One such supplier is Certify My Company, whose owner is WBE-certified herself and highly networked within the supplier diversity community.

Q: Should all firms that could qualify as diverse suppliers become certified?

I believe there is good value to becoming certified for most staffing firms that qualify. It’s an avenue that, if it fits your business model and you’re qualified, 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 annually with certified diverse-owned suppliers.