Taking over my father’s business will not be easy in today’s tough recruitment market

Question:

I grew up working in our family business under my father. I learned a lot from him and have always admired him. Many years ago, my father and I agreed that when he retired, I would pay him fair market value, minus a sweat equity deduction, for the business. That’s in three years.

I worry about the shape the business will be in if my dad doesn’t make changes soon—or at least let me make changes. We haven’t turned a profit since last October and have been in the red since January. The problem: our employees. All but one of the solid ones are retired. We can’t seem to hire good replacements, or at least not ones that stay when they find other employers that allow them more flexibility. We can allow some employees to work from home part of the week and allow other employees to come in an hour later or leave an hour early as long as they get all their work done.

My father has owned this business for 30 years and insists on running it “the way he’s always done it”. He is “married” to the 8 to 5 workday and reminds me that the business has consistently won under his leadership. When I argued, he got angry and said, “That stuff you learned in college doesn’t necessarily work in the real world.”

We had a fight and haven’t spoken since. How do I approach him when even our financial capabilities do not convince him that we need to change the way we run things? And is it best to wait for him to say something?

Answer:

Why wait? If you want to break this jam, apologize to your father for the argument. Tell him what you told me that you admire him. You won’t get there by fighting; he knows how to dig in when someone attacks him. Also, he can trust that your business can handle things because anyone who has been in business for 30 years has experienced periods of low or no profit. But he probably forgot that part of what made him successful was learning every day what worked and what didn’t and realizing “here’s what’s changed and here’s how we need to adapt.”

Talk to him about the challenges you see so you and he can create a game plan together. Here’s what you, your dad, and other business owners have to deal with.

recession

A recession may occur. According to the Conference Board, a member-led think tank that offers future forecasts, more than 60% of CEOs expect a recession to occur in the next year. Another 15% of surveyed CEOs report that their region is already in recession. Layoffs and hiring freezes are happening in the tech world. The number of #OpentoWork banners on LinkedIn profiles has reached the level seen at the beginning of the pandemic.

Employee leverage

Despite a looming recession, there are still 5 million more job vacancies than unemployed in the U.S. For many months, half of all employers have failed to fill their vacancies. As employers are desperate to fill job vacancies but can’t find solid job candidates, talented candidates receive multiple job offers. Employees expect a lot and leave employers who won’t deliver.

Changes in the workforce

As I wrote in last week’s article, many employees have gained “COVID clarity” about their life priorities as a result of the pandemic’s disruption. They became less willing to make sacrifices to “get ahead” of their employer. However, you can find solid employees who want what you and your father have to offer, a solid small business under solid management – if you meet them halfway.

Don’t argue for flexibility; give your father the facts. Half of the 1,583 professionals surveyed by the Harvard Business Review said they would leave their employers if offered a more flexible alternative. Deloitte & Touche research puts definitive numbers on the importance flexibility plays in retention. Their data revealed a savings of $41.5 million in employee turnover costs by retaining employees who said they would leave if they didn’t have the opportunity to work a flexible schedule.

According to a 2018 FlexJobs study, 80 percent of employees surveyed reported that they would choose a job that offered a flexible schedule over one that did not. These employees also say they would feel more loyal to employers who provide flexible work schedules. In addition, 35 percent of employees surveyed said they prioritized a flexible work schedule over a more prestigious position, and 30 percent reported placing a higher value on flexible work schedules than extra time off.

Finally, three years pass in the blink of an eye as one owner moves on to another. Remind your dad that he might want to start loosening the reins.

Leave a Comment