You’ve likely read by now about the 33 million or so Americans who have quit their jobs since last spring in a phenomenon commonly called the “Great Resignation.” A research study by the Predictive Index found that an astounding 48% of employees have recently thought about leaving their jobs. These are big numbers. And while family businesses have historically done better at retention than non-family firms, now is a great time to take a look at why this is — and to double down on those strategies. Even family businesses' natural resistance to turnover will be tested by this new and very real war for talent, in which departures and transitions are happening at an unprecedented, staggering rate.
During these last couple years of pandemic reality, we have seen family businesses draw from their wells of resilience in many ways. They have innovated. They have engaged a wider set of family members. They have adapted their businesses and tried new strategies more quickly than many would have thought possible. These transformations don't happen by accident, and together, they point to an underlying truth: More often than not, family businesses are guided by purpose, values and a long-term view. When harnessed appropriately, these attributes create the will, the space and the mandate to adapt in order to survive and thrive, not just today, but for generations to come.
These same virtues equip families to hold onto their people, even against the forces of today's mass exodus. Purpose and meaning top the list of reasons why people stay at their jobs — more than compensation, work/life balance or even flexibility. And while family businesses are naturally imbued with the instincts and tools to combat the departure trend, it takes deliberate action to put their inherent strengths to use most effectively.
How specifically, can family businesses boost their immunity against the Big Quit? Here are a few suggestions:
Purpose may be clear to you, but invisible to others. Make it explicit. Even values that course through the veins of family businesses sometimes go unnoticed in the day-to-day. Now is a time to make them extremely visible. Include the business's principles and values in leadership messages. Engage your teams in discussions about how values show up in their day-to-day work. Look for ways to demonstrate values through both bold leadership decisions and a constant stream of everyday decisions. We worked with a family that showed how much they care for their people by cutting their own compensation to keep 100% of their employees on, even when the business declined by 75%. We're seeing family businesses explore partnerships in their communities that both enhance the attractiveness of the community (e.g., subsidized rent) as well as of their employer proposition (e.g., company day care). We saw a family owner cover 100% of health benefits, when the market suggested that 50%-75% was competitive. All of these thoughtful actions illustrate a commitment to more than the bottom line.
Clarify roles. Roles can get muddy in any organization, and even more so in family businesses, where the boundaries between family members, owners and employees are sometimes obscured by history or unique dynamics. Now is the time to seize that bull by the horns and clarify roles and expectations. Employees are leaving jobs where they feel they can't be effective, so help them become more so! Consider tools (Decision Charting, Role Negotiation and others) to help structure the work and engage people in candid and productive discussions about how they can be most effective in their roles. The result will likely be more effective managers, as well as increased clarity and engagement.
Make development opportunities explicit. If you can't differentiate your business on compensation — and few can in such an inflated environment — focus on the other things that keep people in jobs, including the opportunities for development and learning. Innovation and opportunity are in many family businesses' DNA.
Widen your talent pool. No one can stay immune to all turnover, so it's good to have backup. During the pandemic, we saw family businesses reach further into their family and networks to generate interest and opportunity for a wider pool. Use your family meetings to highlight ways even the less “typical” skillsets could have a role. Ask your employees to reach into their networks. Family businesses have a unique story to tell, and many will be interested. The trick: How can you always be recruiting?
Make talent a boardroom priority. Talent has become even more of a top strategic issue for business success. Family businesses continually revisit the strength and focus of their governance — both corporate and family. Make sure your board is reviewing key HR leading indicators, such as undesirable turnover, retirements, new hires and offer acceptance percentages, on a more regular basis. This backdrop will add data-driven talent strategy discussions to the board agenda, pushing specifically on the important stewardship role.
While employers across the country scramble to fill massive labor shortages and to up their recruiting game, family businesses can look inward and draw on their unique strengths to combat the current war on talent. It will take work and creativity, but it should come naturally to businesses that lead with purpose and have both history and the future in view.
Debbie Bing is the president of CFAR