Maybe We Knew This All Along: Workers Find Family Enterprises Better Places to Work, Earn
Maybe there is something intuitive about it, but workers generally do better at family enterprises than at other workplaces. I’m not guessing. Research tells us this is so.
Maybe it’s because the pay and benefits are generally better. Or, maybe it’s because the work-life balance is more in-tune with today’s lifestyles. Maybe it’s because workers are less likely to get fired. Or maybe it’s because family businesses are just friendlier places to work. The answer is: all of the above
Simply, if you are one of the 83 million employed by America’s family businesses built on hard work you are generally paid better, have more options, and are less likely to resign or get fired, according to research we conducted earlier this year and sponsored by BNY Mellon Wealth Management.
During pandemic year of 2021 nearly 90% of family-owned businesses kept all their employees, while only 10% reduced staff. The study also found that 54% added new jobs during the same year. In addition, 44% of family businesses paid above average wages/benefits, while only 4% paid below average wages/benefits. The study found 39% of family businesses offered remote working options, too.
Why is the “The Great Resignation” less of an Issue with multi-generational family-owned and operated businesses than with non-private organizations? The answers are straightforward: the pay (wages and benefits) is better, the work options more plentiful, and, if I may suggest, the “X” factor is that maybe they are just nicer places to work.
There are 32 million family businesses in the U.S, 75% of which have been around for 30 years or more, and they contribute $7.7 trillion to our annual GDP. Among generationally-owned family businesses, some 51% have over 100 employees and 42.5% have annual revenues over $20 million.
Additionally, 80% of America’s family businesses saw their revenues grow in 2021, and 88% expect revenues to grow in 2022. In addition, 35% operate in 11 or more states and over 50% employ over 100 people. Family businesses in America consist of 23.7% in manufacturing, 10.4% in construction/facilities, and 9.75% in real estate. We are no small factor in America’s business.
We are two years into what has been called “The Great Resignation.” The COVID pandemic, burnout, and government subsidies have employees wondering if the grass is greener on the other side, and they are walking or staying home. This has employers asking: “How do we keep workers happy and productive?”
This spring, in March, for example, another 4.5 million walked from jobs, about average for recent months, according to Dept. of Labor statistics. This is lower than the record 6 million “quits” two years ago, in the first full month of the pandemic in the US. The quit rate is still too high, but family businesses tend to fare better with those in the “quit” state of mind.
To cut back on the “quitters,” companies nationwide are looking to add work flexibility, financial bonuses, sabbaticals, and mental wellness considerations to stay competitive. Simply, according to national statistics, Generation Z and millennials, like millions of other Americans, are looking for new ways to work, and someplace with meaning.
Family enterprises are offering something beyond paychecks and steady work: a secure work environment. In the non-private sector, employees tend to know they are the first to get the axe. Family enterprises tend to cut everywhere else first before the axe falls on workers. It all adds up to a more attractive workplace.
This doesn’t mean family enterprises are problem free. Rather, it is just the opposite. Family businesses are under constant fire. We need to defend against increases in the capital gains tax, income tax increases, and new wealth taxes if our businesses are to stay healthy.
All of this, the research shows, weighs on the family business decision makers when it comes to the future of the business and keeping employees. Over 45% of family businesses ranked new income taxes as the biggest tax worry. Estate taxes, commonly known as The Death Tax, is the second biggest tax headache, since it often means selling the business to pay the taxes.
Happy employees can stop “The Great Resignation” in its tracks. Thriving businesses allow us to hire more employees, too. It would make sense then that we as a country, and our government, should focus on keeping these businesses thriving, rather than abandoning them to unnecessary regulation and taxation.
Let’s not resign ourselves to killing off a sector of our economy that is one of the sunny spots, where workers are more cheerful, and hopeful, for our collective futures.
Family Enterprise USA advocates for American Family business. We help family businesses communicate their challenges and contributions to American economic freedom to Legislators. We represent all American family businesses; not just specific industries and provide research to enhance the opportunity for success. We help family businesses continue to establish their unique business legacy. Family Enterprise USA is a 501(c)(3) non-profit organization.. Family foundations can donate.
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The need for fact-based reporting of issues important to multi generational businesses and protecting a lifetime of savings has never been greater. Now more than ever, multi generational businesses and family businesses are under fire. That’s why FEUSA is passionately working to increase the awareness of issues important to generationally-owned family businesses built on hard work, while continuing to strengthen our presence on Capitol Hill.
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