In May of 2021, Anthony Kotz, a professor at the Mays Business School at Texas A&M University predicted what he called, “The Big Resignation”. The term is in reference to what Klotz saw as a period of time when there would be a dramatic increase in people leaving their jobs.
He did not need to wait long to see his predictions come to pass.
Prior to Covid-19 the quit rate in the United States averaged around 1.6%. However, as quarantine periods began to end and people returned to work the rate bounced up to 2.6% and in some industries, like food service, exploded past 4%. Regardless of industry though most people cite work/life balance, career goals and pay rates are the driving reasons for them to leave their current job.
Although the assumption is that a family business is insulated from such upheavals, after all you are related to your coworkers, that is not necessarily true. According to the Harvard Business Review most family businesses will experience a 9% turnover rate, slightly better than non-family businesses which experience 11%.
How do you insulate yourself from feeling the full impact of “The Great Resignation” and possibly losing good talent and essential knowledge? Here are some things to consider,
Check-In
Now is the time to meet with those core and important employees. Are they happy? Do they have a clearly stated career path? Do they feel invested in the business, either financially or emotionally? Do they feel that their contribution is valued? If this person isn’t a family member, do they feel like they are permanently on the “outside” unable to ever be part of the leadership team? If they are a family member, are they staying in the business out of family obligation? Have they been relegated to a job with little responsibility or input?
Balanced Culture
Does your business have a culture of hard work at all costs? Is there the expectation that because we are family we should be working around the clock for the business? That no sacrifice is “too big”? If your employees feel like they must give up everything to be successful they will quickly find a place that doesn’t expect such a high-level of sacrifice. Especially with a family business it is important to draw clear lines between “work time” and “family time”. Conversely, a family business is unique because it feels “like a family” and not just for family members. That means a culture where management truly cares about their employees, families, and lives. Have you invested and fostered this unique family business culture?
Examine Pay Rates
With the market for employees getting more and more competitive everyday pay rates are exploding. Are your pay rates still in line with industry standards? Is your benefit package something that is competitive? Perhaps this is the time to consider unique benefits to your company, a work from home policy, additional vacation days, childcare allowances, pet care allowances, free parking, bringing in lunch, building team/company incentives, holding town hall meetings regularly, March madness pools, birthday celebrations – all reminders that people drive our company
Address Problems
It is easy in a family business to brush old hurts and conflicts “under the rug” but these brewing problems can be the very reason why somebody decides to leave. Whether it an employee who is stuck in the crosshairs of two siblings or a family member who is just fed up with a conflict that never seems to get resolved, an unhealed problem can be the very reason somebody quits.
Don’t get surprised by unexpected employee departures and institutional knowledge walking out the door. Now it the time to examine your work environment and see if there is room for change or improvement. Not sure where to start? An outside opinion can help.
Our consultants at REGENERATION are experienced in helping family businesses continue to adapt, grow and prepare for the future. Contact us today for more information.
