The outlook for family business in Europe remains positive with confidence remaining stable at 70 per cent (compared with 71 per cent in June 2014), according to the third edition of the European Family Business Barometer.
The survey, conducted by European Family Businesses (EFB) and KPMG, seeks to measure the confidence levels of family-owned businesses across Europe.
The EFB is the EU federation of national associations representing long-term family owned enterprises, including small, medium-sized and larger companies.
However, as was the case in the first and second edition, the decline in profitability continues to be the one of the primary concerns for family businesses (cited by 47 per cent of respondents), representing an increase of nine per cent over the last 12 months.
In the previous editions, there were warning signs on employment and skills. This seems to be confirmed as challenge surrounding the ‘war for talent’ has been steadily rising. In this third edition, it has been flagged as the second biggest challenge for respondents (42 per cent), a jump of six per cent since the last edition in June.
In addition, the ‘cost of labour’ has risen rapidly to third place in the list of challenges facing businesses, with a swing of 15 per cent to 29 per cent in 12 months. Therefore, it is not surprising that 50 per cent of respondents would welcome reforms in labour market regulation.
The survey indicates that family businesses are still continuing to grow. Fifty four per cent of respondents are now reporting that their turnover has increased (compared to 44 per cent in June 2014). In addition, 48 per cent of respondents have increased staff numbers in the last six months, a rise of eight per cent since June.
Roger Pedder, EFB president said: “The results of this third edition show once again that family companies are growing. However, as we saw from the last edition the pressures on profitability, the worrying trend surrounding the ‘war for talents’ and the complexity surrounding employment are still present. This should act as a signal to policy makers that urgent action is needed.”
Christophe Bernard, global head of KPMG’s family business practice, said: “In this third barometer, it is really encouraging to see that family businesses are consistently optimistic about their future despite the complex economic environment in which they operate. The research has demonstrated a steady growth curve over the last six months and respondents are actively planning new investments in the coming months.
“Nevertheless, they are again challenged on profitability and increasingly concerned about hiring and retaining best talents. These issues will continue to be at the top of the family business agenda as we move into 2015.”
The European Family Business Barometer is based on the responses of an online survey from 878 questionnaires, which were received from family businesses across 18 European countries; this third edition was open from September 15 to October 20.
EFB represents €1 trillion in aggregated turnover, which is nine per cent of European GDP. EFB’s mission is to press for policies that recognise the fundamental contribution of family businesses in Europe’s economy and create a level playing field when compared to other types of companies.
KPMG’s Global Family Business Centre of Excellence is designed to leverage KPMG member firms expertise on family businesses, enabling them to offer specialised insight to clients.