By Everett K. Sands, CEO of Lendistry
The Great Resignation led to more women- and minority-owned businesses. My message for leaders of large enterprises is that The Great Resignation is your company’s opportunity to gain a competitive advantage against your peers – if you recognize how you need to respond.
Former Employees Are Now New Small Business Owners
The Great Resignation has another side to the coin: let’s call it The Great New Business Formation. Those former employees didn’t just disappear. In many cases they took the knowledge and experience they gained in their jobs and used it to go into business for themselves. Now, they’re selling their services to the types of companies they just left.
A large share of newly-formed businesses since the pandemic are minority-owned. Melissa Bradley noted in Fortune recently that 20%-30% of the 4 million newly-formed businesses are owned by Black women alone. So when you add in those founded by Black men and then other minorities, we’re seeing a significant share of new businesses that are minority-owned.
with Jon Fortt on CNBC’s TechCheck
Large Businesses Can Turn the Great Resignation to Their Advantage
Large enterprises have lost valuable employees to The Great Resignation. To be successful moving forward, they must recognize that it’s in their own urgent self-interest to do two things.
First, large enterprises need to develop an integrated procurement and HR strategy. Specifically, they need to look at procurement of services from suppliers as part of their HR strategy, both to supplement their in-house resources and to have a bench of capabilities in place. That way, when the next full-time employee quits, things can keep on moving. This is a very different mindset and approach to HR than most large enterprises have.
The second thing large enterprises must do is very much related to the first, and that is to bring the training and benefits mindset that they have for their own employees into their supplier relationships.
Remember, a disproportionate share of newly-formed businesses are minority-owned. So if large enterprises are going to make external resources a larger part of their HR solution, supplier diversity is no longer “nice-to-have”, it’s a strategic imperative.
Just like large enterprises might provide training or continuing education support to help an employee be more effective, they should be looking for ways to help make their suppliers, and particularly diverse suppliers, more effective. Help them get a certification, or structure their contract in a way that can serve to help them get financing. This new wave of women- and minority-owned businesses are in a position to change the way we do business for the better. With the opportunity to grow, in a few years they’ll be major players in the country’s economy.