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Your Feet On The Street: BPO and Call Center Industry Insights

The Benefits of Supplier Diversity in the Call Center Industry

Consumers are scrutinizing companies’ core values like never before, thanks in part to social media and the internet. A brand’s commitment to diversity and inclusion demonstrates guiding principles that resonate especially with millennials—currently the largest and most influential consumer base, and the most diverse generation in U.S. history. The millennial population is now 44% minority, according to a recent report from the Brookings Metropolitan Policy Program. The U.S. Census Bureau estimates that, by 2042, minorities will become the majority.

Nielsen reports that multicultural millennials represent local markets that drive 47% of the total U.S. gross domestic product. Top brands are increasingly turning to diverse suppliers to establish meaningful connections with the fast-growing multicultural consumer segment, and to help incorporate multicultural insights into their business strategies. 

What Do Diverse Suppliers Bring to a Business Partnership?

In 1969, President Richard Nixon signed an Executive Order establishing the Office of Minority Business Enterprises whose mission was to provide equal opportunities for minority-owned businesses bidding on government projects. Since that time, supplier diversity has evolved far beyond a compliance requirement for companies that contract with the federal government.

Establishing a brand reputation for diversity has become a leading priority for socially conscious companies, but more recently, business leaders have been setting customer-centric and strategic goals for working with diverse suppliers. While 70% of companies participating in The Hackett Group’s Supplier Diversity Performance Study cited corporate image improvement as an important diversity program objective, another 40% said that they aim to improve service and quality by tapping local sources of supply, and 43% sought to gain unique market insights from their suppliers.

Importantly, diverse suppliers deliver equally competitive performance as other suppliers. And this dispels early misconceptions among corporate executives that women- and minority-owned companies lacked the resources to provide the quality or stability that big business requires from suppliers, or that they could not effectively scale to meet growth or seasonal demands.

The Hackett Group research showed that the majority of diversity suppliers met (76%) or exceeded (23%) companies’ expectations. In addition, top corporate performers in supplier diversity experienced no loss in efficiency, but rather reported improved quality, increased market share and access to new revenue opportunities.

Additional benefits of an effective supplier diversity initiative include:

  • Increased brand awareness and customer loyalty. Fully half of today’s global consumers say they are “belief-driven” buyers, meaning they will buy a brand, switch from it or boycott it based on a brand’s stance on controversial or social issues, according to The 2017 Edelman Earned Brand Study. The consumers surveyed—14,000 people from 14 countries—reported that the top issues brands are expected to speak out about are immigration, gender equality and environmental regulation. Keeping quiet is not an option: 65% said they wouldn’t buy from a brand due to its silence on an issue. Consumers also reported that, beyond merely making its beliefs known, they expect brands to commit money (70%), time (72%) and influence (68%) to the cause and express their beliefs through employees, daily business, sourcing, manufacturing and advertising.
  • Brings unique perspectives to problem-solving and decision-making. Research by professors from the Kellogg School of Management, Brigham Young University and Stanford University found that diverse groups outperformed more homogeneous groups because diversity triggered more careful information processing and open discussions, while members of homogeneous groups were like-minded, thus, tended to agree with one another.
  • Faster innovation, which translates into being the first to market with products and services, and a more significant market share. Companies that embrace diverse suppliers as part of their customer value chain are typically the ones that are leading innovators in their industries. Partnering with vendors whose demographics more closely reflect the diversity of the target customer base brings the business in closer alignment with customers’ needs and desires. Companies can identify emerging market trends and move quickly to maintain a competitive advantage.

Diverse Call Center Outsourcer Stimulates Local Economy Through Job Creation

In addition to the benefits that supplier diversity brings to the business and its stakeholders, minority-owned businesses have had a substantial impact on the U.S. economy. According to the National Minority Supplier Development Council’s (NMSDC) Economic Impact Report of The Effects of NMSDC Certified Minority Business Enterprises on the U.S. Economy, the business activity created by the 12,000 NMSDC-certified Minority Business Enterprises (MBEs) had a total economic impact of more than $400 billion in output in 2014, which resulted in the creation of and/or preservation of more than 2.2 million jobs held by persons who were directly or indirectly employed by NMSDC-certified MBEs.

A case in point: One CustomerServ MWBE call center outsourcing vendor has been instrumental in revitalizing a local community within one of America’s largest cities. With the county’s high unemployment and lack of disposable income, local retailers were shutting down and area malls were on the decline. Our vendor recognized that the empty retail space in one local mall was well-suited for a call center conversion. The mall also offered amenities that many call centers struggle to provide such as ample parking, a food court and public transportation. Once the company announced their intent to bring the call center to the community, state and local government quickly offered their support by extending a bus line to the mall.

Besides bringing more than 1,000 call center jobs to the region, with more on the way, the ripple-effect of our vendor’s center is being felt in the retail industry. “Our spending power is definitely being felt in the mall, which is on the comeback,” said Wilson, adding that two prominent retail brands have moved back into the mall as anchor tenants. “We’ve been a catalyst for growth here.”

How to Identify a Diverse Call Center Outsourcing Vendor

How do you identify diverse call center suppliers? Over the past 50 years, supplier diversity classifications have expanded to include various affinity groups, including minorities (African American, Asian American, Pacific Islanders, Asian Indian Americans, Hispanic American, Native American), women, veterans, persons with disabilities, and lesbian, gay, bisexual and/or transgender (LGBT+) individuals, as well as small businesses and historically underutilized businesses (HUB).

To qualify as a diverse supplier, businesses must be at least 51% owned, operated and controlled on a daily basis by one or more persons of the above designated groups. Diverse companies typically authenticate their qualifying status through the following nationally recognized third-party certification services:

  • Minority-Business Enterprise (MBE): National Minority Supplier Development Council (NMSDC). The NMSDC Network includes a national office in New York and 23 Regional Affiliates across the country.
  • Women-owned Businesses: Women’s Business Enterprise National Council (WBENC) provides a national standard of certification to women-owned businesses through its 14 Regional Partner Organizations.
  • Veterans & Service-Disabled Veteran-owned Businesses (SDVBE): The U.S. Department of Veterans Affairs’ Vets First Verification Program affords verified firms owned and controlled by Veterans and Service-disabled Veterans the opportunity to compete for VA set-asides.
  • Disability-owned Business Enterprise (DOBE): DOBE Certification is provided by the U.S. Business Leadership Network (USBLN).
  • LGBT-owned Businesses: The National Gay and Lesbian Chamber of Commerce (NGLCC) is the exclusive, third-party certification body that grants  Lesbian, Gay, Bisexual and Transgender Business Enterprise (LGBTBE) designation to businesses that are majority-owned by LGBT individuals.
  • Small Business Enterprises (SBEs): SBE certifications are issued by the local or state government. Eligibility for certification as a Small Business Enterprise varies depending on the issuer; requirements may relate to number of employees, length of time the company has been in business and the net worth of the company's owner.
  • Historically Underutilized Businesses Zones (HUBZone): HUBZone is a Small Business Administration (SBA) program for small companies that operate and employ people in Historically Underutilized Business Zones (HUBZones). To be eligible for certification, businesses must be located in a HUBZone area; be a small business by SBA’s standard; be owned and controlled at least 51% by U.S. citizens, or a Community Development Corporation, an agricultural cooperative or an Indian tribe; the principal office must be located within a HUBZone; and at least 35% of its employees must reside in a HUBZone.

The Goal Is to Find the Right Call Center Outsourcing Partner

Of course, just because a potential call center outsourcing provider has obtained diversity certification doesn’t mean that it is a good match for your business. A CustomerServ MWBE vendor’s CEO points out - “Most diverse suppliers are not trying to uneven the playing field by relying on the fact that they’re diverse”.

He goes further to say “They just want the designation to be recognized—but first and foremost, look for the outsourcer’s capability for providing the service that you want to buy.”  In other words, the supplier diversity classification alone should not drive a client’s buying decision. And he is correct.

CustomerServ has applied our expert vetting process in hand-selecting best in class diversity call center vendors. To get the full advantage of a supplier diversity program, CustomerServ can match your outsourcing needs with a diversity-certified call center supplier that aligns perfectly with your contact center requirements, customer service mission and culture.Don't miss a beat. Sign up for the CustomerServ blog.

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