Providing financial advice to a family running a business is complex, according to a Europe-wide study that highlighted challenges around growing a business and managing its wealth across generations. This important advisory market segment is increasingly being impacted by a ‘war for talent’, according to the European Family Businesses (EFB) and KPMG Enterprise European Family Business Barometer.
The 2017 barometer found that a family businesses’ ability to attract and retain skilled individuals has become their number one concern. More than four in 10 (43%) of the family business representatives surveyed named recruiting skilled staff as one of their businesses’ major issues, coming ahead of increasing competition (37%) and declining profitability (36%) in second and third place.
With almost eight in 10 (78%) family businesses across the continent employing external directors, representing a steady incline since the barometer first asked the question in 2015, the issue of attracting skills is increasingly pertinent from the bottom to the very top of family businesses.
Ken McCracken, KPMG’s UK head of Family Business Consulting, said: “The culture and values that become apparent to employees within many family businesses, once they have joined, means they tend to perform strongly when it comes to retaining talent.
Elizabeth Bagger, executive director at the Institute for Family Business, commented: “This latest barometer gives important insights into the challenges family firms are facing and some of the barriers to them achieving their ambitions.
“Despite these challenges it is encouraging to see how many families have plans in place to grow their business, including reinvesting in their business, and exploring new markets. These findings reflect the dynamic, innovative and ambitious family firms we work with every day.”
The survey also looked at efforts to balance family and business, as well as issues around succession planning.
McCracken said: “I’m pleased to see such a majority placing value on preparing a successor and, as such, that half have the next generation in management roles while one in 10 are clear on their aim to appoint a non-family chief executive in the near future.
“However, eight in 10 are without a chief executive succession plan which suggests there is work to do in many cases. I do think there is still an overly blurry line about the distinction between being a family owner and being a family manager. Deciding on this point can be a pivotal moment for a family at a crossroads.”
The responses from UK family businesses also suggest that they are less engaged with exporting than the European average. Less than half (44%) are without any overseas activity; a figure that’s only 24% across the continent. Appetite to change this exporting gap is also lacking according to the UK sample, with only 26% planning to increase their activity levels abroad, compared to 44% pan-Europe.
Source: Will Grahame-Clarke, December 05,2017; https://international-adviser.com/advise-family-business/