Family businesses: what happens with human resources?

The issue is very complex and all in all, still little studied. The system of family businesses and human resources that it involves is the most widespread in the world. It is wrongly thought that it is a particular prerogative of our local economy. Instead, it dominates the entire international entrepreneurial landscape, albeit with a different weight regarding its contribution to GDP by macro-area.


Intangible aspects


Many studies reveal how the owners of family organizations are interested not only in financial results but also in the socio-emotional wealth that the company manages to bring to the family. In detail: the ability to exercise authority, the perpetuation of family values ​​through business. Preservation of the family dynasty, enhancement of parental relationships rather than observance of strict criteria of competence. All this satisfies the need for identification and continuity of the family tradition. Hence, regardless of financial considerations, family businesses are more likely to perpetuate direct control over the firm’s affairs.


Nepotism


In family businesses, nepotism materializes with the practice of offering job opportunities to one’s relatives. It is a practice that negatively influences the management of human resources because it is contrary to the enhancement of merit. Specifically, it contributes to the disappointment in the organization.

The company thus becomes unattractive to external resources. Hiring family members does not ensure the acquisition of skills necessary to carry out entrepreneurial work. Influencing the company’s ability to survive in the moment of generational change. It is also frequent that the founder, who is a direct relative of the other workers, does not identify a successor in order not to create tension and friction. Doing so, at the time of his retirement, increases the instability within the company. The data of some researches are emblematic: only 30% of companies survive during the second generation while only 10% of companies reach the third generation. (Beckhard & Dyer Jr, 1983).

Human resources: the weight of family relationships


Cohesion and flexibility in family relationships are the basis of the different behaviors regarding human resources. Households with high levels of cohesion hire family members in the company regardless of their abilities. Conversely, excessive flexibility leads to the demand for levels of skills above those that the market normally requires. In extreme cases, almost excludes the hiring of family members. These are two extreme realities, in the middle, there is the right mix to obtain satisfactory results both in value and economic terms.

The most adequate family structure is in a form that can be defined as “balanced”. Its members, despite the good level of cohesion, maintain high degrees of independence. This favors the balance in the choices of change in leadership and in the definition of family roles. Family members work together democratically respecting shared rules. Creating more efficient and functional family systems especially when it is necessary to hire external collaborators to cover or strengthen the skills necessary to trigger a process of growth and expansion.


Labor market


Family businesses are often not very attractive in the labor market. Nepotism and the quality of family relationships are some of the reasons. In fact, the image one has of family businesses in the labor market is often that of being not very dynamic structures, too tied to tradition and to the family, and unable to enhance the quality of their resources.
Another element to note is that the remuneration is on average lower. And this is true in relation to all positions, not only with respect to managerial ones (research Bassanini, Breda, Caroli & Riberioux, 2013). The element that can justify this disparity can be identified in the fact that family businesses offer. In return, greater security in maintaining a job. Numerous studies have also observed that more women and those in operational roles prefer family businesses. Less attractive for those with a high level of education, for those who live in an urban area, and for managers. As results affirm a great capacity for “retention” by family businesses towards “blue collars”, very low instead towards “white collars” “.

Famous saying


Ensuring the continuity of family businesses over time is a great challenge but it is worth organizing and then managing. The intervention of an external figure is very important. It brings an impartial point of view aimed at the company’s interest. There are professionals who specialize precisely in this. In fact, the saying is always true: in the family, you are relatives in the company you are partners.
In these cases, even the search and selection of personnel becomes a delicate issue, to be exercised by carefully evaluating the complexity of the relationships. You can contact us we boast a great experience in every field and for the management of the most diverse problems. We will certainly be able to offer you the most appropriate solution to your requests.