Performance figures for each account are calculated using time weighted rate of returns on a daily basis. The Composite returns are calculated based on the asset-weighted monthly composite constituents based on beginning of month asset mix and include the reinvestment of all earnings as of the payment date. Composite returns are as follows:

The #1 Issue for Family Businesses: Challenges & Solutions


In recent conversations, clients have highlighted one primary Covid-exacerbated problem for family businesses: people. In particular, how to find them and how to keep them. The resiliency of family businesses and the grit of their leaders are being tested.

Here are five challenges related to the people issue, followed by three tips for addressing this problem.

Record Employment – Canada’s unemployment rate recently hit a new bottom of 5.1%, the lowest point since comparable data became available in 1976. One practical outcome: a family business client in Canada with over 100 call centre openings. The jobs go begging. Few people want or will do those jobs. The estimated wait time? When someone gets hired.

Work Ethic – One client in The Maritimes cited the different work ethics of over 50 and under 50. The first group is more prone to grab the extra work and will work evenings and weekends as necessary. A strong work ethic is their guarantee of continued employment. Those under 50 are more likely to have a clear white picket fence around their personal time. They also expect jobs to be available—and they are. So, employers can’t squeeze the same amount of juice from all lemons.

People Leaving – The so-called “great resignation” is impacting family businesses. One dynamic cited is that people close to retirement have simply packed it in. They can trade in their home equity which magically mushroomed in the past ten years or so, downsize, save a small pot and then live a life of ease. Why work? They are beneficiaries of the made-in-Canada retirement strategy used greatly in Vancouver and Toronto. A lot of expertise has prematurely disappeared.

Mobility – There is excessive mobility, particularly in tech-related fields. IT workers routinely get job offers, with more dollars bandied about to jump ship. For example, a client in the Maritimes lost a long-term employee due to a competitor offering a hefty bump in pay. The person left because they felt they had no choice; their costs were going up significantly, particularly housing. The client quipped that too many people from Ontario are moving to the Maritimes and pushing up housing costs.

Government – There are government challenges regarding supply. Although Canada has a fast-track program for skilled foreign workers, it still fails to meet its promised turnaround times. Companies can use the Global Talent Stream (GTS) to bring in top specialists or workers to fill in-demand roles like software engineers, web designers and database analysts. But it’s not working. According to a recent article in the National Post: “Workers arriving under other temporary streams, prospective permanent residents and would-be citizens are all experiencing significant delays, with the department facing a backlog of two million cases.”

How do family business owners address these challenges? Here are three practical tips to address the people problem in today’s Covid environment:

1 – Live with Integrity

A family business can provide the glue to keep their people. Money is important, but it’s not the only motivation for being part of a company. A company’s vision, mission and values need to be highlighted and, more importantly, lived out, even in challenging times. That will tell you whether they mean anything.

It would be very easy in challenging times to let company values slip. How? One family business owner shared that he is in a position where he could charge a premium for his product, and due to demand, he would get sales. Yes, his costs have gone up—but not that much. He is a wholesaler to retail shops, and he knows his customers; though they would pay him, they would have challenges adapting to increased prices.

To him, it’s a matter of integrity, and employees see how he is acting. In turn, this behaviour impacts how employees view the company: A company that sticks to its core values enhances credibility. This chain-reaction may be an advantage for family businesses which are often more long-term oriented in terms of being committed to values.

A company’s lived values can be important in other circumstances. Another situation involved an employee who was about to get lured away by a more lucrative opportunity, but it would have meant leaving an office environment of 40 and trading it for a home office of 1. The boss convinced the employee to stay by emphasizing the team and its commitment to the vision—which the employee realized was true. So, it can come down to an issue of leadership—to convince the person to stay.

People are still attracted to a company with a clear purpose and a leadership team that lives it out. Perhaps not every last person, but the majority of people. Corporate culture can be a glue to combat a signing bonus elsewhere. The bottom line: a company that lives its integrity will be a magnet for many.

2 – Listen More Effectively

Listening is essential in a polarized environment. People need to be validated. There needs to be an atmosphere of “psychological safety/comfort.” Stay engaged so people are not pilloried. Stay focused on key issues, not opinions.

As in the stage play, Alan Burr says emphatically to Alexander Hamilton: “Talk Less, Listen More!” Likewise, listening to employees—more effectively–makes a difference. As Stephen Covey said, “Seek first to understand, then be understood.” Dialogue, not co-monologues. Be a student, not an expert.

How do leaders listen more effectively on an individual basis? Simple leadership question: Do you give equal airtime to employees based on how much airtime you use and how much you express your opinion? That’s a good start.

One group way to listen to employees is to do polls. For example, regarding the nature of return to work, a company can do polls that hopefully produce a representative view. One high-tech client revealed that of a workforce of 200 people, only 40% wanted to return to the pre-Covid arrangement. Ouch. But better to find out what employees are thinking and then proactively respond.

As one client said, you must communicate thoroughly, or there is a vacuum. Leaders need to have their ears to the ground, aware of what people are thinking.

 

3 – Be Creative

Challenging times require new ideas—not easy. Where to find workers? Is there a way to scour the world and integrate an off-shore workforce? One client is developing a team in French-speaking Tunisia to backstop his Quebec operations. He had an employee from Tunisia and became aware of the possibilities. They are now part of his global workforce.

What about flexibility? Employers may need to modify work arrangements. Changing office configurations reflects the new reality that many employees will not be in the office daily from 9 – 5. Further, many people do not want to come into the office—period. Employees juggle a raft of life, family, health and other commitments that can’t be confined outside of 9 – 5. The bottom line is no accommodation: there will be a shrinking job pool.

By Rick Goossen

Rick has extensive experience with high net worth individuals and families, working with them in both a financial and governance capacity. He thrives on understanding the business and entrepreneurial journey of individuals and families and then using creative and strategic thinking skills to help them succeed.


This material contains the current opinions of the author and such opinions are subject to change without notice. This material is distributed for informational purposes only. Nicola Wealth is registered as a Portfolio Manager, Exempt Market Dealer and Investment Fund Manager with the required securities commissions.