In this sixth European Business Barometer, European Family Businesses (EFB) and KPMG Enterprise once again seek to bring insight on the confidence levels of family business, the challenges affecting their operations and the solutions and unified approach that they take to ensure sustainable growth.
Overall, the findings show confidence in family businesses continues to gain momentum, with 71% of participants reporting that they are confident for the future of their business. 57% of family businesses had increased turnover this year, while only 13% experienced a decline.
The results of the Barometer also suggest that family businesses are driving job creation in Europe: 39% are planning to maintain their current staff levels, and 44.7% plan to bring in additional people to increase staffing levels over the coming year.
Although the indicators are positive, there are a number of issues facing family businesses, the ‘war for talent’ being the most pressing one (43% of participants listed this as the biggest issue). “Businesses need to make difficult choices and look for new ways to stand out as competition heats up.” Aside from the war for talent, key issues facing family businesses are the following: increased competition (37% listed this as the main issue for family businesses), a decrease in profitability (36%), increased cost of labour (32%) and political uncertainty (30%). As always, the transfer of business remains of upmost concern to family businesses.
According to the participants of the barometer, the biggest priorities for family businesses are
1) Improve profitability (64% listed this)
2) Deal with increased turnover (45% listed this)
3) Innovate more (37% listed this)
4) Find new talent (32% listed this)
When asked which of a list of possibilities would boost the growth prospects of their companies more, 39% of participants stated they wanted a more flexible labour market regulation, 33% requested a reduced administrative burden and 32% stated they needed a lower tax rate.
This year, our family businesses were asked to give their opinion on the debate surrounding the future of Europe. The majority (56%) asked for increased integration, 29% asked that the current situation be maintained and only 16% asked for a decrease in integration. Those who asked for increased integration were subsequently asked, “what should Europe focus on?” 19% of respondents requested “single market only” and 36% wanted a single market with a deeper political union.
While the term integration can be interpreted loosely in this context, these results are clearly indicative of a predominantly pro-European mindset in family businesses.