Family firms say labour and skills shortages are the greatest challenges they face, ahead of cash flow, margins and financing, according to a survey by Pricewaterhouse Coopers.
“Skills shortages are currently a huge problem for all employers but for family firms, fighting the war for talent is arguably more challenging,” said John Cowling, senior partner at PwC in Sheffield.
Smaller businesses have fewer resources to throw at training or marketing, for instance. In addition, some forms of incentive that attract the most talent are simply inappropriate for family firms. Our report shows that family firms recognise the importance of talent for future growth, and this is why they rank skills shortages as their most significant challenge.”
The survey found that almost one in three family firms in the UK had no succession plans in place for people in key senior roles and seven out of 10 had no procedures for resolving conflicts among family employees.
“In family businesses, knowledge and skills are often built up over generations and become firmly entrenched, so there’s a huge amount at stake when someone leaves,” said John Cowling.
“Our experience here in Yorkshire suggests succession planning is being taken increasingly seriously, but there’s still some way to go.
“The best succession plans are working documents that clearly define the skills required and map these continuously against potential candidates.
“Conflict can be particularly divisive in family firms so it’s concerning that seven out of 10 businesses do not have conflict resolution procedures in place.
“Of the firms that do have an established means of diffusing tension, third-party mediation is the most popular option.
“An impartial adviser can often provide the best means of settling conflict, particularly where emotions run high.”