Managed services providers (MSPs) play a vital role in connecting companies with the right talent. Yet in order to remain competitive and meet the needs of their clients, MSPs must have access to a wide range of talent with unique skills, perspectives, experiences, and ideas. Large enterprises and giant tech companies may dominate the news, but the reality is that small, diverse businesses represent the fuel that powers much of our nation’s wealth and employment gains. Unfortunately, fears of recession and demands for higher profit margins have convinced businesses to curb or eliminate their DEIB spending, seeing it as a “peripheral” or “extraneous” expense. Even worse, some states are enforcing legislation to do away with DEIB altogether. All of these actions threaten more economic harm than good. MSPs have a golden opportunity to overcome these obstacles and deliver exceptional service by bolstering mentor-protégé programs with small, diversity staffing suppliers.

Dwindling Investments in Diversity

“Following the murder of George Floyd more  than 200 tech companies, including tech giants Amazon, Apple, and Facebook, made unprecedented pledges to confront structural racism within their organizations,” wrote Ebony Flake in Essence Magazine. “Many promised to add Black Lives Matter commitments to their mission statements. They vowed to hire more Black talent and embed diversity, equity, inclusion, and belonging (DEIB) into all facets of their organizations.”

But three years later, Flake pointed out, “those promises have primarily fallen flat. A 2022 study showed minimal increase in the percentage of Black employees since 2020. For Daniel Oppong, a corporate diversity expert and founder of DEIB consultancy, The Courage Collective, the message is clear. ‘It signals that companies are more interested in managing public perception than they are interested and invested in and driving real change,’ he said.”

In a recent survey by the Society for Human Resource Management (SHRM), 42% of respondents said that their company has cut or reduced its DEIB budget in the past year. This is up from 34% in 2021. The survey also found that 38% of respondents said that their company has eliminated or reduced DEIB positions in the past year. This is up from 32% in 2021.

“With news of layoffs,  prolonged inflation, and the possibility of a recession, many business leaders are reexamining their strategies and prioritizing the most critical business initiatives,” Misty Gaither explained in her article for Fast Company. “For many companies that means that DEIB (Diversity, Equity, Inclusion, and Belonging) initiatives are threatened, signaling that these efforts are still considered adjacent to the business rather than integral to the company’s operations.”

But it’s not just businesses that are jeopardizing DEIB growth. State governments are also taking aggressive steps to remove DEIB initiatives, as Alia Wong discussed in USA Today: 

“Florida Gov. Ron DeSantis has been on a high-profile crusade to remove diversity, equity and inclusion initiatives from the state’s colleges. Funding for DEI – and a collection of topics lumped together as critical race theory – ‘will wither on the vine,’ DeSantis said earlier this year as he unveiled legislation that would cut such programs. At least two dozen bills on the question have been introduced in 15 states this year, according to the Chronicle of Higher Education, all seeking to somehow undo DEI efforts at colleges. In some states, institutions are already rolling back their DEI programs in anticipation of a crackdown.”

The cuts to DEIB programs are a setback for efforts to create more inclusive workplaces. DEIB programs can help to improve employee satisfaction, boost morale, and increase productivity. They can also help to attract and retain top talent.

Small, Diverse Business Are the Lifeblood of the Economy

Undoing years of progress toward supporting opportunities for small, diversity businesses — or outright gutting that support — has more to do with ideology than financial strategy. 

According to the U.S. Small Business Association (SBA), small businesses of 500 employees or fewer make up 99.9% of all U.S. businesses and 99.7% of firms with paid employees. Of the new jobs created between 1995 and 2020, small businesses accounted for 62% — that’s 12.7 million positions compared to 7.9 million by large enterprises. A 2019 SBA report also found that small businesses accounted for 44% of U.S. economic activity. 

Small businesses are particularly important in minority communities. For example, minority-owned businesses account for 16% of all businesses in the United States, but they employ 29% of the African American workforce and 22% of the Hispanic workforce.

A study by the National Bureau of Economic Research found that diverse businesses create 1.7 times more jobs than non-diverse businesses. The study also found that diverse businesses are more likely to survive and grow than non-diverse businesses.

Another study by the Ewing Marion Kauffman Foundation found that diverse businesses are more likely to innovate than non-diverse businesses. The study concluded that diverse businesses are more likely to introduce new products and services, and they are more likely to adopt new technologies. The economic benefits of small diverse businesses are clear. 

• They create jobs. Small businesses are the largest job creators in the U.S., accounting for about two-thirds of all new jobs created each year. Not only do small businesses create jobs, they do so at a faster rate than large businesses. In fact, small businesses create two out of every three new jobs in the United States, which helps to reduce unemployment and poverty.
• They stimulate economic growth. Small businesses spend more of their revenue on local goods and services than large businesses do, which helps to stimulate economic growth in their communities.
• They innovate. Small businesses are more likely to innovate than large businesses, which helps to drive economic growth.
• They provide opportunities for entrepreneurs. Small businesses provide opportunities for entrepreneurs to start their own businesses and create their own jobs.
• They strengthen communities. Small businesses help to strengthen communities by providing employment, supporting local charities, and promoting economic development.
• They help achieve equity in the workplace. Small businesses help to create a more equitable economy by providing opportunities for people who may not be able to find jobs at large corporations. They also help to promote diversity and inclusion in the workplace.

Small businesses create jobs, generate economic activity, promote innovation, and help build stronger communities. But as we’re seeing in current trends, these essential job creators and economic contributors find themselves facing increasing hurdles in available opportunities. This is where a robust mentor-protégé program can benefit MSPs, their staffing partners, and their clients.

The Big Benefits of Mentor-Protégé Programs

Mentor-protégé programs can help MSPs to gain access to new markets and customers. By working with minority-owned and women-owned businesses, MSPs can expand their reach into new communities and industries. This can help MSPs to grow their business and increase their profits.

Mentor-protégé programs can also help MSPs to improve their competitive edge. By working with minority-owned and women-owned businesses, MSPs can demonstrate their commitment to diversity and inclusion. This can make them more attractive to clients and partners, who are increasingly looking for businesses that are committed to these values.

In terms of brand, mentor-protégé programs can be instrumental to MSPs that want to enhance their reputation and unique value. By working with minority-owned and women-owned businesses, MSPs can show that they are responsible and ethical companies. This can make them more attractive to clients and partners, and it can also help them to attract and retain top talent. 

Gains for MSPs

There are tremendous advantages for MSPs in building out strong mentor-protégé efforts.

• Improve their diversity and inclusion efforts. By working with diversity suppliers, MSPs can increase the diversity of their talent pool, which can lead to improved innovation and problem-solving.
• Expand their reach. Mentor-protégé programs can help MSPs connect with new suppliers, which can help them to expand their reach and find the right talent for their clients.
• Gain access to new skills and expertise. Diversity suppliers can bring new skills and expertise to the table, which can help MSPs to provide better service to their clients.
• Build relationships with key stakeholders. Mentor-protégé programs can help MSPs build relationships with key stakeholders, such as government agencies and non-profit organizations. These relationships can be valuable in terms of gaining access to new opportunities and resources.
• Improve their supplier relationships. Mentor-protégé programs can help MSPs to build strong relationships with their suppliers. This can lead to improved communication, collaboration, and trust, which can ultimately lead to better outcomes for both parties.
• Provide training and development opportunities. Mentor-protégé programs can provide training and development opportunities for both the MSPs and their suppliers. This can help to improve the skills and knowledge of all parties, which can lead to improved performance.
• Increase their competitive advantage. Mentor-protégé programs can help MSPs to gain a competitive advantage. By working with diversity suppliers, MSPs can access new markets, develop new products and services, and improve their reputation.

Gains for Suppliers

Mentor-protégé programs are equally valuable to diversity suppliers. These programs can help small businesses in several areas.

• Grow their businesses. Mentor-protégé programs can provide small businesses with the support and resources they need to grow their businesses and compete with larger companies.
• Access new markets. Mentor-protégé programs can help small businesses access new markets and expand their reach, particularly in spaces dominated by larger, more established companies. This can help diversity suppliers to grow their business and reach new customers.
• Build relationships with key stakeholders. Mentor-protégé programs can help small businesses build relationships with key stakeholders, such as government agencies and non-profit organizations. These relationships can be valuable in terms of gaining access to new opportunities and resources.
• Develop stronger relationships within the MSP. Mentor-protégé programs can help diversity suppliers forge stronger relationships with key decision-makers at MSPs. This can lead to new opportunities for business, such as contracts, subcontracts, and referrals. This also helps elevate suppliers to the role of strategic and trusted advisers.
• Receive training and development support. Mentor-protégé programs can provide training and development support to diversity suppliers. This improves their skills and knowledge, which drives performance and growth.
• Increase their competitive advantage. Mentor-protégé programs can help diversity suppliers to gain a competitive advantage. By working with MSPs, diversity suppliers have access to new resources, expertise, and networks, which can help them to grow their business and succeed in the marketplace.

Gains for Clients

Mentor-protégé programs also benefit clients. By working with MSPs that are committed to diversity and inclusion, clients can gain access to a wider range of talent and expertise. This can lead to improved innovation, problem-solving, and decision-making.

• Access a wider range of talent and expertise. Mentor-protégé programs can help clients to access a wider range of talent and expertise, allowing them to find the best possible solutions to their business challenges.
• Improve their supplier relationships. Mentor-protégé programs can help clients to build strong relationships with their suppliers. This can lead to improved communication, collaboration, and trust, which ultimately produces better outcomes for all parties.
• Support diversity and inclusion. Mentor-protégé programs can help clients to support diversity and inclusion. By working with diversity suppliers, clients can create a more inclusive marketplace, even if their businesses have cut back on internal DEIB investments. This also improves efforts aimed at enhanced social responsibility.

It’s Just Good Business

Mentor-protégé programs are a win-win for staffing industry MSPs, diversity suppliers, and clients. By working together, these groups can help to create a more diverse, inclusive, and competitive marketplace.

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