Family businesses look to next generation to drive change
The cost-of-living crisis is the biggest threat to family firms according to new research from KPMG Private Enterprise.
The report found that the pandemic grew the role of the next generation in nearly a third of family firms and that 70 per cent of family business owners intend their offspring to run the business when they retire.
The research was conducted by KPMG Private Enterprise, in partnership with the University of Leeds, and revealed the scale of transformation and challenge since the pandemic is triggering sweeping changes to succession in family businesses.
The commitment to family ownership is steadfast, with more than seven in 10 family business leaders (72 per cent) intending that their children take on the business when they retire. But the succession plans at four in 10 have changed since the pandemic, resulting in more prominent roles for the next generation at nearly a third of family firms (31 per cent).
The research showed a tale of two halves as some family businesses have accelerated succession plans while others have decelerated or even reversed them.
For a third of those whose succession plans changed (30 per cent), the impact is an earlier-than-previously-planned step back from the business by leadership. For four in 10, the next generation have become more involved in management, though not taking over the leadership.
Nearly half (46 per cent) fear that managing succession on top of other risks is too much change at once and have delayed retirement or leaned back into the business.
Mark Essex, director of KPMG’s Family Business team, said succession in family firms has never been such a hot topic.
“Many plans have changed since the pandemic and in different directions. In many cases tech-based change has been the reason for the next gen to step up swiftly as their skills became critical to the success and survival of their businesses,” he said.
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