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Supplier Diversity Blog by supplier.io

What We Learned About Diverse Suppliers: LGBTQ

Diver Suppliers LGBTQ

The LGBTQ business community has been emerging as a major player in the world of supplier diversity over the past few years. The results of CVM Solutions’ groundbreaking State of Supplier Diversity reports reinforce this development.

In our 2017 reports, 277 suppliers responded to our survey, 15 of which identified themselves as LGBTQ. In 2018, 380 suppliers participated—an increase of 37 percent. However, the number of LGBTQ respondents jumped 67 percent, from 15 to 25.

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Not only did this increase reveal how LGBTQ enterprises (LGBTQEs) are making their presence known in supplier diversity, but it also gave us a large enough sample size to draw some conclusions. Here are some of the highlights from our research:

6.6 percent of survey respondents identified themselves as LGBTQ businesses.

As noted, this result slightly increased from last year (when it was 6 percent) and cements that LGBTQ-owned business enterprises have emerged as a legitimate category in the supplier diversity space.

Almost all LGBTQEs are certified as such.

An impressive 92 percent (23 of 25) of LGBTQ respondents said they are certified as such by an appropriate agency such as the NGLCC. An interesting result from our survey is that certification numbers have been surprisingly high, possibly because the suppliers willing to participate in our survey are active in supplier diversity and recognize the importance of being certified. That said, 92 percent is higher than every other diversity category except small businesses (which came in at 94.7 percent) and is just slightly lower than last year, when every LGBTQ respondent was certified.

Not many identified with another diversity category.

This finding surprised us a little—just 32 percent of LGBTQ respondents also chose another diversity category (survey participants could choose more than one). That’s fewer than the 37 percent of women’s business enterprises (WBEs) and 40 percent of minority business enterprises (MBEs) that picked multiple categories.

64 percent have fewer than 10 employees.

LGBTQEs by far reported the greatest percentage of businesses of fewer than 10 employees, at 64 percent. Interestingly, only four of the 25 LGBTQ respondents in our survey also identified as small businesses (employing fewer than 10 people almost definitely lands an organization in the “small” category), possibly implying that avenues exist for these businesses to branch out into other diversity categories and certifications.

LGBTQEs are well established.

Three-fifths of LGBTQ respondents have been in business for 11 or more years, with another 16 percent at least four years old. These numbers are similar to other major diversity categories and suggest that although LGBTQEs may be just now landing on supplier diversity programs’ radar, these businesses bring years of experience to the table.

LGBTQEs are successful at finding business partners.

Our survey found that 83 percent of LGBTQ respondents are designated as diverse by at least one supplier diversity program. This is generally on par with other major diversity categories (MBEs came in at 79 percent, WBEs at 82 percent) and shows that more opportunities for LGBTQEs are becoming available.

About half seek government contracts.

Just 52 percent of LGBTQ participants actively seek government contracts. This result is lower than other diversity groups—MBEs reported a 67 percent “yes” answer to this question, WBEs were at 61 percent, small businesses were at 71 percent, and veteran-owned businesses came in at a whopping 87 percent.

Are LGBTQEs less likely to go after government contracts because they don’t want the partnerships, or are the opportunities in this space simply not there? This will be a statistic we’ll be keeping a close eye on in coming years.

Just a quarter are successful with supplier diversity portals.

Our report found that 41 percent of all respondents had secured supplier diversity opportunities via online portals. Yet for LGBTQEs, that number was just 24 percent. The disparity isn’t completely surprising—smaller businesses were generally less likely than larger businesses to find success with portals, and LGBTQ businesses tended to be smaller in our survey. However, a familiar question must be asked: Are the portals, the supplier diversity programs, or the LGBTQ suppliers themselves contributing to the low number?

As consumers, supplier diversity matters to LGBTQ entrepreneurs.

We again asked this thought-provoking question on our survey:

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

For all survey participants, 82 percent reported at least a slight influence, with 36 percent saying the influence was strong. But for LGBTQ respondents, these numbers came in at 90 percent for at least a slight influence and an impressive 52 percent for a strong influence. This stunning result is more evidence that LGBTQEs are positively impacting supplier diversity—and companies need to start to taking notice.

Which statistic in this report surprised you most?

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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.