The good news is the majority of family businesses reported sales growth in the last year, and their intent is to keep growing steadily. The bad news, however, is these businesses are struggling to attract the right skills and talent from the workforce to drive this growth.
Sixty percent of Canadian family businesses reported sales growth in the last year, and in the next five years 87 percent plan to grow steadily, according to the Canadian supplement of PwC’s Global Family Business Survey.
However, attracting a skilled workforce was the top concern for 62 percent of Canadian family businesses, while the economy is the primary issue for 66 percent of global respondents.
The difference in challenges facing family businesses nationally and internationally comes down to the unique position of Canada’s economy, says Sharon Duguid, director of the Centre for Entrepreneurs and Family Enterprise at PwC.
“The difference lies in the relative stability of the Canadian economy, aging workforce, and the tight talent pool Canada is facing,” says Duguid.
“Everyone is competing for the same talent,” she adds.
“Typically, family businesses are not able to compete with multinational players when it comes to compensation. On the development end, their conservative growth strategies are not appealing for younger talent who want to climb the ranks quickly.”
Despite their challenges, the unique structure of the family business has some significant benefits for employees, such as agility, continuity, and a long-term mindset.
“People are attracted to companies that have strong values and where they know their efforts will be recognized, both of which are characteristics of family businesses,” says Duguid.
“Family businesses need to do more to highlight their competitive advantages—their commitment and loyalty to their people.”
Not Always Passed on to the Kids
Just over half of Canadian family businesses (51 percent), compared to 41 percent globally, plan to pass on management of the business to the next generation.
An additional 14 percent plan to pass on ownership but employ non-family members to oversee the business. A further 17 percent plan to sell their company in the next five years, and 16 percent don’t know yet what they will do.
