Family businesses are hit by skill shortages

Yorkshire’S family businesses have reported that skills shortages are their biggest internal challenge, ahead of cash flow, margins and financing, according to a survey by PricewaterhouseCoopers (PwC).

The study found that many family firms were having a hard time, with only 40 per cent experiencing any growth in demand for their products or services.

The findings are contained in PwC’s Family Business Survey, Kin in the Game, which is based on interviews with more than 1,600 small and mid-sized family businesses in 35 countries, including 100 UK firms.

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Katherine Bullock, private client and private business partner at PwC in Leeds, said: “Skills shortages are currently a huge problem for all employers but for family firms, fighting the war for talent is arguably more challenging.

“Smaller businesses have fewer resources to throw at training or marketing, for instance. In addition, some forms of incentive that attract the most talent are simply inappropriate for family firms. Our report shows that family firms recognise the importance of talent for future growth, and this is why they rank skills shortages as their most significant challenge.”

Thirty two per cent of the UK sample did not have succession plans in place for senior roles. However, UK businesses are more prepared than many of their counterparts elsewhere. For instance, around 60 per cent of firms in Italy and France do not have succession plans in place.