The Problem of Diversity Among Talent Acquisition Suppliers

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Nov 4, 2021
This article is part of a series called Techsploration.

When people in recruiting talk about diversity, it’s usually about candidates. When it comes to the ways talent acquisition departments and agencies broaden partner, supplier, and vendor relationships though, diversity is still an emergent conversation. 

That’s what sparked a group of people to start Diverse TA Suppliers, a website devoted to highlighting women- and minority-owned vendors in the talent acquisition industry. 

One of the leaders of the effort is Susan LaMotte, CEO and principal strategist at employer branding firm exaqueo, who said the idea grew from a gender-based snub earlier this year. “I was looking to find a list of HR businesses owned, led, or run by women,” said LaMotte. She didn’t find any resources. 

LaMotte recruited Tracey Parsons, Maury Hanigan, and Jessica Miller-Merrell to the cause, all of whom lead women-founded recruiting technology and service providers.

Parsons, founder and CEO of WORQDRIVE and Parsons Strategic Consulting, led a panel at the fall HR Technology Conference & Exposition where she highlighted the stark numbers for women-founded firms and talked about the challenges in getting a foothold:

  • 3% of U.S. venture capital goes to all-women founding teams 
  • 17% of U.S. venture capital goes to founding teams with at least one woman
  • Of the 13 unicorns at HRTech, only one has a female CEO
  • Zero of the company winners of the 2021 Top Products in HRTech have women as co-founders

Maury Hanigan, founder and CEO of SparcStart, and Jessica Miller-Merrell, founder and Chief Innovation Officer at Workology led the effort to launch the website, which debuted with approximately 40 companies in October. To be listed, the firm must be owned or led at the CEO level by someone from an underrepresented group. Certification, at least for now, isn’t required.

“We’re working on the honor system,” said Hanigan. “Certifications are done on a state-by-state or even city-by-city basis. Some are a year behind on applications.” Hanigan also notes that some certifications for diverse ownership or leadership are either non-existent or emergent. “We’re trying to be as inclusive as possible.” 

A talent acquisition leader reports that their diverse supplier guidelines require certifications from organizations like the National Minority Supplier Development Council or the Women’s Business Enterprise National Council. They can still work with suppliers who aren’t certified but they don’t get credit in their diverse supplier programs for using them. 

Diversity Efforts for Suppliers See Challenges

Lists like this aren’t all positive — even for those who stand to potentially benefit from them. Kimberly Jones, CEO of talent acquisition strategy company Kelton Legend and senior director of enterprise talent strategy at UC Irvine, has seen the downside of list-building initiatives. 

“Over the past year, I watched many organizations show interest, in a very disingenuous way, after watching two Black men get murdered,” she said. While many organizations were motivated to reach out to her and other diverse suppliers through well-meaning lists, most ghosted her and others. Jones said she ended up booking one client, a nonprofit, from the hours spent on calls and RFPs. “I was grateful for [their] business and appreciated the honest effort.” But she said that’s rare.

Many larger companies have diversity goals as part of their procurement process. These frequently leave suppliers from underrepresented groups on the outside looking in, as well. One talent acquisition leader from an enterprise technology firm said there are limited opportunities to engage diverse suppliers outside of certain engagements because of their scale. With a majority of the budget going to enterprise-scale technology and advertising, it leaves very little room for companies to carve out the right projects for diverse suppliers.

Environmental, social, and governance (ESG) initiatives in the past have focused on simply creating a diverse slate of companies to choose from. “Many get points for a diverse slate but not selection,” said LaMotte. That has led to what Hanigan describes as some tokenism, as procurement departments scramble to get diverse representation for a decision that’s already made. The lack of feedback and responsiveness throughout the process is something that many diverse suppliers mention.

In talent acquisition, recruitment advertising agencies play a role in supplier diversity, too. That can mean that many decisions about diverse suppliers aren’t something talent acquisition leaders have traditionally had visibility into. More companies are demanding diversity from their agency partnerships, but that’s a new request for these organizations.

A Place to Start, But Hopefully Not End

Some companies are trying to move beyond tokenism and are opening up their corporate coffers to spend with intention. For example, Unilever announced that they are committed to spending more than $2B annually with diverse businesses. That would represent about 4% of their total 2020 revenue. 

There are no programs like that specific to talent acquisition thus far. Hanigan isn’t asking for that, though. “Have the people in the room and have them be a part of the decision process,” she said. “Be responsive and think about the time investment.”

As for time commitment, the group behind the diverse TA suppliers initiative hopes that in-house talent acquisition leaders or the Association of Talent Acquisition Professionals (ATAP) are eventually willing to take it on. They are encouraging those who own or lead a diverse supplier to sign up to be included.

While it’s early going, everyone in the group felt like they needed to do something. As LaMotte points point, “I firmly believe that change will only come about if in-house leaders are willing to be honest, look at their vendor slates and tech stacks, and say, ‘Wow, this is a problem, and I want to be part of the solution.’”

This article is part of a series called Techsploration.
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