As family businesses seek to prioritize growth, they must remain laser-focused on the levers that will drive their business forward, even in the face of economic uncertainty and global challenges. For these leaders, talent will play a key role in long-term success, and leaders must lean on the cultural values and integrity inherent in family businesses to help them successfully attract and retain the talent they need to thrive in any market environment. This article covers four ways to turn trust into a competitive advantage.
The workplace landscape looks completely different than it did a few years ago. A combination of a booming economy, a global pandemic and worker dissatisfaction with jobs has led to great layoffs. Additionally, record low unemployment has given employees leverage to criticize employers, as well as mobile. Talent retention and acquisition is a bigger priority than ever for many companies, especially those focused on growth. As these challenges are likely to continue, businesses need an employee-centric strategy built on trust and concrete actions to win the war for talent.
Effective talent management is key to growth
In PwC’s February 2022 Pulse survey, 92% of private companies indicated that recruiting and retaining talent is critical to their growth. Talent retention and acquisition is also a priority for the next generation of family business leaders. According to PwC’s 2022 US NextGen Survey, 75% of NextGens see talent acquisition, management and retention as top priorities in the next two years following the unprecedented impact of Covid-19 and subsequent labor market changes.
Advantages of family business
According to the 2022 Edelman Trust Barometer, family-owned businesses are the most trusted companies – and have been for the past nine years – with 67% of respondents saying they trust family businesses, compared to 58% privately held, 56% publicly traded, and 52% state-owned. For companies. Family businesses earn this trust with a clearly defined purpose and strong values that are the foundation of their organization, and derived from their family owners. These values often include a commitment to positively impacting their employees and communities and acting as a socially and environmentally responsible business. At a time when employees are looking for more meaningful work, being part of a family business gives them the opportunity to put their values into action and makes the time and energy they spend on their work more worthwhile.
Family businesses can use this inherent advantage to win the battle for talent and drive growth. To do this, they must prioritize building and building trust and focus on what matters most to employees.
The connection between faith and talent
Trust has become integral to attracting and retaining talent. If a business loses trust, they are more likely to lose employees. But business leaders often overestimate how much employees trust them. According to a recent PwC survey, 84% of business leaders say that employee trust is high, compared to 69% of employees. This gap can have adverse consequences, including lower employee retention rates and a negative impact on a company’s bottom line.
And the stakes are high. According to PwC’s US Trust in Business Survey, 71% of employees said they would leave a company if they lost trust in their employer, and 22% of employees said they left a job because of trust issues. Employees prioritize accountability, transparency, clear communication, and admitting mistakes while building trust for them.
Turn trust into a competitive advantage
Family businesses have historically had better retention rates than non-family firms, but even their natural resistance to turnover will be tested by today’s competition for talent. Companies that see this challenging environment as a unique opportunity to attract talent will benefit To deepen trust with current and potential employees, family businesses should:
1. Lead and communicate with clarity.
Be clear about what your company stands for; How do you support your people; how you champion diversity, equity and inclusion; and your ESG goals and progress — then get the word out. According to PwC’s 2021 Family Business Survey, only 23% say they have developed and communicated a strategy around their ESG goals. There is activity, but businesses are lagging in how they are communicating their overall strategy and progress. Use your existing channels – including your NextGen – to communicate with potential and existing employees
2. Remove silos and foster collaboration
Employees need to understand the impact across the business. Remove silos that block the flow of information for employees as they seek to create a consistent experience. Welcome new ideas and encourage creativity and collaboration throughout your organization. When employees feel heard, it deepens trust within your business. For example, a family business that has operated for over a century engages 150 of its 400 employees in the long-term strategic planning process so it has a more diverse range of ideas and a committed group to execute the strategy.
3. Be prepared to trust as you grow.
PwC’s US Trust in Business survey also revealed that 75% of business executives are focusing heavily on employees to build trust. But when it comes to concrete action, only 37% have implemented key trust-building actions such as creating plans for crisis communication or assembling a trust steering committee. Consider how to develop your trust practices with listening-sessions or pulse surveys as your business grows.
4. Embed ESG into your operations.
Look for opportunities to weave in ESG efforts that can have a positive impact on your business and the outside world. Many employees want to work for organizations that focus on making the world a better place, and organizations that prioritize ESG can increase employee engagement. Family businesses are prioritizing ESG long before this has become a topic of discussion. It is important for organizations to take a data-driven approach to these activities in order to calculate and communicate their impact. Start by reporting what you’ve already done, because past results reinforce current messaging around future plans
Lean between values and integrity
As family businesses seek to prioritize growth, they must remain laser-focused on the levers that will drive their business forward, even in the face of economic uncertainty and global challenges. For these leaders, talent will play a key role in long-term success, and leaders must lean on the cultural values and integrity inherent in family businesses to help them successfully attract and retain the talent they need to thrive in any market environment.