Several national organizations as well as government agencies offer certifications to verify whether diversity-owned firms are, indeed, diversity owned. Examples include the National Minority Supplier Development Council, or NMSDC, and the Women’s Business Enterprise National Council, or WBENC.
And they remain important — especially so, as large users of staffing services prefer to see certification, says Gene Waddy, CEO of Diversant.
“The corporations want to make sure the suppliers they are working with are legitimate,” Waddy says. In requests for proposal to award business, client companies often will ask staffing suppliers claiming diversity status to provide copies of certificates with the rest of the proposal paperwork.
Some state and local government entities may allow for self-certification by staffing firms, Waddy says. However, some government agencies, such as the Port Authority of New York and New Jersey, have their own stringent certification programs.
“Certifications definitely are important in the sense that it’s a validation of who you are,” says Manoj Agarwal, CEO of US Tech Solutions. “Third-party certification definitely helps, because then companies don’t have to spend time qualifying.”
Maintaining the threshold. In general, companies must be at least 51% owned by a woman or minority to be considered as such by an organization that provides third-party certification.
A concern can arise when a diversity-owned firm aims to raise needed growth capital from nondiverse investors, says Tom Kaminsky, VP of talent advisory services at KellyOCG. If diversity ownership of a firm falls below 51% through such a deal, the firm could lose its diversity status.
This means the owner of a diversity firm faces the choice of growing the firm or keeping its diversity status. However, Kaminsky says some certifying organizations, such as the NMSDC, are now looking at companies on a case-by-case basis about allowing them to keep their certification and grow.
NMSDC certifies organizations that are owned by African American, Asian, Hispanic or Native American individuals. Meanwhile, WBENC and the National Women Business Owners Corporation certify womenowned businesses; the latter also certifies veteran-owned businesses. The US Pan Asian American Chamber of Commerce also offers certification. Another organization that provides certification is the National Gay and Lesbian Chamber of Commerce.
In addition, the US Small Business Administration has its 8(a) certification, which is for small businesses owned by socially and economically disadvantaged people. It has a certification as well for businesses in “Historically Underused Business Districts,” or HUBZones, as well as a Women-Owned Small Business certification, which is offered through third parties such as WBENC.