A New Era: Insights in the Fight for Talent
It would be reasonable based on the near constant media coverage and the frequency with which these businesses are featured during dinner table conversations, to think that startups and tech companies run the economy. In that context, the steady parade of grim talent retention issues and layoff announcements – numbering 66,000 in January 2023 alone on top of 140,000 in 2022 – is enough to set off a 5-alarm bell.
You would not be alone then, in being utterly shocked by the jobs report for January of 2023 showing that the U.S. economy increased jobs by 517,000 and hit a 53-year low in unemployment.
How is this possible? Despite what the coverage would have you think, it turns out that tech actually made up less than 10% of the economy in 2022. By contrast, family businesses made up 64% of U.S. GDP and employ 83 million out of the ~160-million-person workforce. These figures are even more pronounced outside of the U.S., where family businesses really do run the economy.
For much of history, family businesses have been the employers of choice – profitable growth and concentrated ownership often enable these businesses to offer better work life balance, more flexible policies, and long-term career paths. Employees have benefited during good times (44% of family businesses report above average salaries), as well as during hard times (90% of family businesses did not lay off any staff during the 2021 pandemic year).
Despite this, family businesses have struggled to attract and retain talent over the last market cycle. The cache associated with working at a ‘startup’ combined with benefits bordering on the absurd (manicures in the office, anyone?) and no imperative for profitability have allowed for extraordinary compensation packages that cash flow positive businesses could not compete with.
Now, with the euphoria in the tech world starting to wane and recently laid off talent reflecting on the path forward, there is an opportunity for family businesses to take control of the narrative again. To remind the world that while working in tech may be more fun to talk about at the dinner table, working in a generationally minded, profitable, and cash flowing business is more likely to keep that dinner on the table for years to come.
At Wingspan, we view this time as a hiring opportunity, a moment to educate millennial and Gen Z talent – many of whom have only seen excitement and times of plenty in tech – that there are other types of businesses out there that can offer both stable and lucrative careers. We are advocating that the families we partner with do the same.
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