Chloe Mumford - 4 min read
Why should you work with a diverse MSP?
What is a diverse MSP?
In the world of contingent workforce management, a Managed Service Provider (MSP) refers to how businesses outsource services like staffing vendor management, job postings, compliance, business administration, and management responsibilities to a third party. An MSP is commonly used by businesses with large contingent workforce needs including large corporations, non-profit organizations, and government departments. The right MSP can deliver solutions to decrease the workload of hiring and managing contingent talent in your business. This gives the executive team and hiring managers more time to focus on more significant tasks to grow the organization.
Contingent Workforce MSPs represent a portion of a massive trend towards service provider outsourcing. In 2019 the broader market was valued at $185.98 billion and is expected to rise substantially to $356.24 billion by 2025. This figure shows that there has become a greater interest in finding the right partner to perform business functions considered non-core to growth and customer experience.
A diverse MSP describes a supplier business run by people from a diverse background, often staffed by a diverse workforce. A diverse MSP achieves all an MSP does while contributing toward diversity spend. This means you get more bang for your buck.
Tier 1 vs Tier 2 diverse spend
Diverse spend is the amount of money spent solely on diverse-owned suppliers. It is important for organizations to have a multi-tier diverse spend, which includes both tier-one and tier-two being procured from a diverse supplier.
Tier-one (also known as prime suppliers) covers businesses that directly sell products and services to businesses. In contrast, tier-two suppliers are those organizations that provision services for your tier-one vendor. You can imagine, working with a diverse MSP—one that encourages the selection of diverse suppliers with its supply chain—is the best way to gain maximum reward for organizing your contingent workforce spend.
The benefits of choosing a diverse MSP
1. Save more money
One clear benefit of using diverse MSPs comes in the form of spend economies. A study by the Hackett Group found that “20% of spending directed toward diverse suppliers delivers at least 10% to 15% of annual sales”. In addition to this, they also found that 10% of sales come with supplier diversity requirements. Can you afford to leave money on the table by not having a diverse supplier?
Highly inclusive companies are more likely to reach their financial goals by up to 120%, according to a study by Drive Research. Working with a diverse MSP helps you gain financial benefits, and obtain new customers as a result of having a clear diversity strategy.
2. Boost productivity
Working with a diverse supplier can impact productivity in your organization for the better. Interestingly a study showed that teams with high levels of geographical, gender, and racial diversity, as well as some age gaps of at least 20 years, were making more informed business decisions.
3. Competitive Advantage
78% of respondents in a study by Deloitte believe that diversity and inclusion is a competitive advantage.
It’s one thing to talk about the ‘traditional’ diversity and inclusion goals, but to diversity needs to happen across all areas of your organization. This can be very appealing to prospective customers as it demonstrates that diversity is a part of your company culture. For them, it shows that you put your money where your mouth is.
Using a diverse MSP is one method of leveling up a company’s reputation. It can act as a leg-up over your competitor. In addition to this, it also provides you with more options – one study shows that diverse companies are 70% more likely to capture new markets.
4. A More Diverse Talent Pool
Using a diverse MSP brings the ability to better match your talent demographic to that of the diverse communities in which clients operate in. By tapping into their diverse supplier partners, MSPs attract more talent in the long run and fill a talent pool with people of different cultural perspectives which can provide fresh insight, increased productivity, and out-of-the-box thinking.
Overall having a diverse Managed Service Provider, like Workspend, can provide a multitude of benefits for your business.
100% of the spend running through our MSP program qualifies as tier-one diverse. Moreover, 50% of our supplier partners are diverse, meaning that our diverse supplier partners bring our clients higher tier-two diverse spend.
By partnering with a diverse MSP, you’re cementing your reputation as an organization that’s invested in diversity and making a change for the better.
Ultimately, your organization can expect a productivity increase, and reputational boost, not to mention the financial benefits. It’s in every organization’s best interest to embrace diversity in its workers and suppliers.
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