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Supplier Diversity Blog by supplier.io

State of Supplier Diversity in the Professional, Scientific, and Technical Services Industry

Professional, Scientific, and Technical Services Industry

It’s no secret that the services industry is unique. Rather than selling hard goods, service businesses sell processes, ideas, and expertise. Marketing these intangibles presents its own challenges. For starters, service businesses need to put more effort into defining the value and quality of their service to justify their price tag. Establishing this framework of comparison is vital when there aren’t clear attributes to point to. Because a service isn’t something that can be returned, customer satisfaction has a greater influence on brand perception, retention, and referrals.

With these challenges in mind, many service companies have begun to adopt supplier diversity programs. Such programs offer a means of standing out from the competition, influencing brand perception, and gaining greater market share. Our latest survey revealed that 68 percent of service companies track how their supplier diversity programs are influencing market share and brand image. For non-services industry companies, that number was only 31 percent. Not surprisingly, businesses in the services industry tend to be more interested in the intangible benefits that these programs can provide.

[Download the Reports] The 2021 State of Supplier Diversity

Of the services industry companies we polled, a majority said that their diverse suppliers met or exceeded their expectations of quality. Furthermore, 74 percent of those companies rated their supplier diversity programs as somewhat or very effective. Despite those encouraging stats, this industry has been slow to expand its programs. In fact, the majority of companies polled had two or fewer full-time resources dedicated to managing such initiatives. If the benefits are real, then where are these programs encountering resistance?

Supplier Diversity Challenges Faced by the Services Industry

In the services industry, finding and maintaining diverse vendors can be difficult. That may be due to the fact that there are fewer diverse suppliers in typical spend categories. On top of that, many companies are unsure how to locate and vet diverse suppliers without inadvertently creating discriminatory practices. In fact, 58 percent of service companies still use Google to find diverse suppliers, compared to just 29 percent of non-services industry companies.

When it comes to building out supplier diversity programs, the services industry also faces the same barriers as countless others. The companies lack a reliable means of reporting on their performance, or their reporting process is too manually demanding. The fact that 72 percent of services industry companies use desktop programs like Excel to manage their direct suppliers only adds to this friction. Along with being inefficient, these programs make it difficult to share key information and communicate internally. Without adequate communication tools or data, collecting Tier 2 data requires hounding suppliers for feedback. To top it all off, earning C-suite and stakeholder buy-in on new initiatives is nearly impossible without performance metrics to help demonstrate progress.

Tackling Those Challenges

Believe it or not, adopting supplier diversity management software can help you tackle all of these common challenges.

To begin with, the right software solution will give you access to a diverse supplier database to streamline your sourcing process. Unlike Google, this tool will help you quickly filter results, maintain up-to-date compliance records, and access supplier contact information.

In addition, a software partner can offer data enrichment services to ensure that the information you’re pulling for your reports is organized, accurate, and complete. With more precise data and robust analytics, you’ll be empowered to conduct granular reporting on the metrics that matter most to your company. You can also build out advanced models to measure factors such as economic impact and Tier 2 development (important initiatives for realizing end-game supplier diversity benefits). Along with helping you improve, better reporting can be used to improve stakeholder buy-in.

Perhaps most importantly, the right software solution will provide all this functionality and insight from an integrated, intuitive dashboard. That means you don’t have to worry about manually uploading or maintaining data. Furthermore, a cloud-based system will help facilitate team collaboration and ensure that everyone remains on the same page.

Leveraging a Strategic Partner

If you’re still pressed for time or manpower, a strategic partner can help you grow and improve your supplier diversity program without overextending your staff. The right partner will be able to evolve your reporting framework as your objectives change so that your program remains aligned with company objectives. It can also provide helpful educational resources (reports, events, and so on) on the benefits of supplier diversity to improve buy-in across your organization.

To learn more interesting stats about the state of supplier diversity in the services industry and beyond, download our free 2018 State of Supplier Diversity reports.


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The team has a long history in driving innovative solutions in supplier diversity. We believe that companies deserve solutions that are effective and provide measurable value and results. Started more than a decade ago, supplier.io has rapidly become a prominent provider of supplier diversity solutions to leading corporations. We currently support customers in automotive, healthcare, insurance, retail, manufacturing, education, and banking. One in five Fortune 50 company relies on supplier.io.