Among family businesses, succession planning is considered one of the most important elements. Many construction or engineering enterprises in Australia are family-owned and operated, having started in a basement or small office.
While these firms began small, the dreams were often large. Not only do many want the businesses to flourish to support their current family, but they want to set up their children for the future.
The "Coming home or breaking free?" report surveyed more than 34,000 next-generation family business members, but only one in five wanted to take over the family enterprise in the future. This definitely paints a good picture for family business, but this the reality? According to a recent Ernst & Young (EY) report, in collaboration with the University of St Gallen Center for Family Business, the answer is no.
EY's Oceania Family Business Leader, Ian Burgess explained that this figure has fallen by around 30 per cent since the last survey in 2011.
"Not only is there competition from the wider jobs market, with young people keen to explore their options in today's fast-moving economy, but many also feel that they need to prove themselves outside of the family firm first," he said in a September 23 media statement.
Mr Burgess continued by stating that if children don't want to take over their parents' businesses, this can be turned into a positive.
"While the overall number of potential successors may have declined, those that actually wish to join the parental firm may be more motivated and better trained to take on the challenge," he added.
Do your children not want to join the business?
Family Business Australia reports KPMG figures that show around 70 per cent of all enterprises are family-run. As such, there are many businesses that may face recruitment challenges in the future if younger generations don't want to take the mantle.
70 per cent of all enterprises are family-run.
If your firm is in this position, how can you ensure future success after you have retired or moved on? Here are two tips:
1) Identify the required skills
To hire the best candidate, a recruitment agency such as Design & Construct will need a clear outline of what skills you require in a potential hire. Take the time to identify what makes your business special and what the next leader should represent.
2) Don't hire yourself
If you are thinking about moving on, it is important to consider candidates from outside your mold. While your abilities and talents got your business to a certain level, new ideas could spark a future full of innovation and industry leadership.
Looking for your next successor, contact the expert team at Design & Construct today.