How To (Really) Think About 3rd Party Diversity Spend

How to (really) think about 3rd party diversity spend

How To (Really) Think About 3rd Party Diversity Spend

By Gary Mizhir

As we begin to put 2020 in the rearview mirror (thankfully!), companies are starting to gear up for the all-too-familiar set of planning activities in January that make senior leaders excited and middle-managers shudder. The topic on diversity will undoubtedly get a half-day (or more) worth of agenda time, and as a bonus, it may even come with a (very expensive) visit from an external diversity expert who will be there to tell you what you believe you already know. At least there used to be free food at these things! But at this year’s meeting, it’ll probably feel like all others we’ve had in 2020: pajama pants and a button-down shirt sitting in front of your laptop. 

This time around, allow us to provide you with some insights to arm you well for those conversations and equip you with the tools that allow you to think about diversity, how to source for a diverse workforce, and how to unlock its potential. 


I spent eight years as a leader within a procurement division at a Fortune 100 company. During that time, we had lots of discussions about diversity. We even had a team set up solely to focus on driving up diversity spend. I honestly give credit to that group for trying to drive change, but it simply wasn’t enough. While a lot of attention was focused on creating a diverse workforce, that attention was largely focused on permanent associates. When it came to 3rd parties working with us, the key metric was on spend—meaning spending money with companies that were certified as minority owned (Tier I). When that wasn’t possible, we took credit for the fact that some large companies brought on sub-contractors to assignments whose companies were minority owned (Tier II). We felt really good when we could drive those numbers up by asking diversity-focused questions in RFPs—requiring a portion of our contracts to be with, or sub-contracted to, minority owned companies—or when we gave smaller minority-owned companies a shot to win our business. So, what was the result of all these efforts? Our metrics went up. But does that all really matter? 


The real key to diversity sourcing isn’t whether or not the companies you are dealing with have an owner who comes from a “diverse” background, but far more importantly, if the resources which you are sourcing are coming from under-represented communities. The team composition matters. The real starting point is when the teams on the ground represent the broader community and are made up of diverse workers. It’s the candidates that matter; it takes some different thinking to recruit them, and some evolved behavior to unlock their potential. But wait, that’s not enough either. 


Many under-represented workers do not/cannot follow the same path as everyone else, yet they still spend their career building up their skills. Many don’t have the opportunity to go to college, so they find themselves stuck in lower-paying jobs with minimal upward mobility. Yet, many of these folks develop skills that can translate well into roles that historically require backgrounds and experience that aren’t attainable for everyone. The time is right to re-think hiring practices to consider the skills needed rather than the background someone has. Techniques such as testing can help establish the minimum threshold for qualifications, while other skills and experiences can make these candidates excel in their roles who normally would have been dismissed automatically. 


Here’s a challenge: take flour, sugar, butter, eggs, and chocolate chips, put them in a bag, shake them up, pour it out on a tray, and bake it. Do you know what you won’t get? A cookie. This doesn’t happen automatically, and just hiring diverse workers and hoping they will magically make your team better simply won’t happen. Also, while it’s great that many senior leaders have goals around diversity and inclusion, they are not the ones who are going to really get the value out of the teams. Managers need to be trained to unlock the potential of a diverse team, and that only happens with inclusion. Imagine the last time when you were the only person in a group who was different. Was it easy to simply speak your mind and contribute? More likely, you were a little bit shy and reserved. The best managers know how to understand, include, and involve their entire team to get the most out of them.  


There has never been a better time to “re-set” the workforce. With a COVID-19 vaccine on the horizon, operations cranking back up, and hope for the new year, companies have already started to grow again.  With that growth comes the need for people, and in particular, the help of your contingent workforce.  Now is the time to start thinking about what shape that workforce can and should take. Now is the time to be working with your suppliers to determine your sourcing strategies. If your suppliers are not equipped to lead you through this, then I suggest thinking hard about who you are partnered with.  


While the diversity and inclusion conversation is finally and rightfully getting the air time it deserves, most companies need some help driving meaningful progress in their workforce diversification and in unlocking the value that it brings—it’s worth it for many reasons. Doing this creates a more inclusive culture, helps the broader society, and drives real business value… but it must be done right. 


You need a partner who not only knows how to help, but also lives these values. When I was considering the next step in my career, I was fortunate to have options. I came to Pride Global because they walk their talk. Being a military veteran (Go Navy!) and being of Hispanic decent, I personally understand what it’s like to navigate through these waters (shameless pun!). I got the help I needed at the time, and in spite of having a college degree, it still wasn’t easy. I came to Pride because they’re able to serve their customers authentically, based on how they run their own organization. Now I get to be part of the solution and will personally be creating a veteran recruiting program to help the brave men and women of our armed services find work upon separation and thereafter. That is just one group of people that Pride helps every day through their recruiting and placement efforts.

To learn more about Pride Global and its family of companies, please check out  To hear more about my story, please feel free to reach out to me directly at