Family-Owned Businesses Optimistic About Economy and Growth in 2024 and Plan for Increased Hiring and Employee Engagement
Family-owned businesses have grown increasingly optimistic regarding the strength of their organizations in the last year and are focused on recruiting and retaining employees, according to a new survey by the First Bank Center for Family-Owned Businesses. The survey also highlighted the differing priorities of company founders and their subsequent family leaders.
Overall confidence in the economy rose strongly in the last twelve months, with 61% of respondents strongly agreeing that "I feel confident in the direction of the economy over the next year," a 12% increase. In addition, they are confident in the health of their own businesses, with 75% of respondents strongly agreeing that "I see our business and revenue growing over the next five years," an 11% increase over a year ago, and 68% strongly agreeing that "our current business model can withstand continued uncertainty," a 7% annual increase.
The U.S. economy is largely made up of family-owned or controlled companies, totaling 87% of American businesses. They account for more than 82 million jobs, or 62% of the country's workforce, and represent 64% of U.S. gross domestic product (GDP) ? totaling $5.9 trillion1.
"Family-owned businesses drive our communities, and the survey highlights their enduring strength, resilience, and innovative spirit on a day-to-day basis," said Michael Dierberg, chairman of the board, First Bank. "The 2024 Family Business Survey studies the changing dynamics of business priorities and strategies with an emphasis on identifying different generational priorities in areas such as the measurement of success, the role of branding, and the importance of philanthropy as part of their culture."
Family business owners are focused on recruiting and retaining employees. Hiring more staff was noted as a top business priority by 38% of respondents, an 18-point increase from 2023, and employee engagement and satisfaction rose 12 points to 35%, from 23% in 2023.
The survey also measured the differing priorities of leaders by position in the family structure. Highlights include:
- Profitability is the top success metric at 55% across all generations. However, founders (G1) place more attention on this than second (G2) or third generation and beyond (G3+) leaders (G1:65%, G2:50%, G3+:43%). "Family Unity & Togetherness" (G1:28%, G2:35%, G3+:30%) and "Continued Succession" (G1:21%, G2:35%, G3+:30%) are more important success metrics for next-generation leaders than founders.
- Respondents identified the skills next generation leaders will need for continued success. "People Management" was highlighted as most important (G1:58%, G2:55%, G3+:58%) with "Passion for the Business" a close second. There was greater variability between generations with this attribute (G1:64%, G2:49%, G3+:46%).
- 70% of businesses incorporate family-owned in their branding with "Telling our Backstory/History" (59%) as the most common approach. Not surprisingly, the importance of highlighting family-owned branding increases with each generation (G1:57%, G2:77%, G3+:88%).
- Overall, third generation leaders are most involved with philanthropic and/or community support initiatives, followed by second generation. Founders are least engaged, with 26% indicating no community involvement.
First Bank established the Center for Family-Owned Businesses to leverage its experience as a fourth-generation family-owned business to help other families achieve long-term business success for multiple generations. This survey provides insights into the challenges, opportunities, and trends shaping the landscape of family enterprises.
"Family-owned businesses face unique opportunities and challenges as they embark on a multi-generational journey and our survey provides a snapshot of the current environment and guidance for long-term success," said Ed Hart, senior vice president and director, First Bank Center for Family-Owned Businesses. "It's inspiring to help empower these businesses to evolve and thrive by balancing tradition and innovation, so every family business continues for generations to come."
The 2024 Family Business Survey was sent to family businesses of all generations, industries, and regions to gain insight on topics including business goals and strategies, defining "success," branding, next-generation leadership, philanthropy, and economic and developmental outlook. The research was conducted in partnership with market research firm MacKenzie Corporation by surveying a total of 575 respondents.
Full survey findings are available upon request or can be accessed on the First Bank Center for Family-Owned Businesses website.
First Bank Center for Family-Owned Businesses
The First Bank Center for Family-Owned Businesses was created in 2021 to expand focus and resources for family-owned businesses. The Center is led by Joe Ambrose, executive director, and Ed Hart, director. Between them, they have more than 60 years of experience with family-owned businesses. The Center offers tailored resources to serve the unique needs of family business members, online tools, webinars, and educational opportunities for family-owned businesses of all sizes. To visit the online resource, visit www.first.bank/Business/Plan/Center-for-Family-Owned-Businesses. For more information, contact [email protected].
About First Bank
First Bank, a subsidiary of FB Corporation, is one of the leading privately owned banks in the country. As a family-owned business with four generations of independent, single-family ownership, First Bank offers the stability and experience with long-term planning that helps businesses and the communities in which they operate grow and thrive. With $6.6 billion in assets and 80 locations throughout California, Missouri and Illinois, First Bank has developed a relationship-driven approach to offer comprehensive solutions for clients in commercial and consumer banking, wealth management, mortgage banking and more. For information, visit www.first.bank.
1 2021 research by FamilyBusiness.org
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