Millennials in the workforce: Do family businesses need to worry?
Research on family business has mostly focused on succession, estate planning, family dynamics and governance. Not much attention has been given to the quality and effectiveness of family and nonfamily talent to ensure continued success and growth in family businesses. How to attract, select and retain talent is a challenge for both family and nonfamily businesses but even more so in family businesses because of the complexity of the intertwined relationship between the family and the business systems.
I read recently that millennials have surpassed the previous generation in the workforce in the United States, and I wondered if family businesses need to pay special attention to millennials in their workforce and if they should be more concerned about adjusting their human resources practices than their nonfamily counterparts.
So far, we have learned from scholarly work that family businesses have low rates of job rotation, long tenures and higher employee commitment than nonfamily businesses. They tend to avoid firing employees even during financial crises. In contrast to nonfamily businesses, research also has found family businesses tend to help employees not only to do the right thing but be happy. As a result, family businesses tend to provide better customer service, have stronger relationships with suppliers and highly motivated employees.
In addition, family businesses have an organizational culture with strong values that can affect positively the sense of belonging to the organization. Nonfamily business values are not less important, but they are usually perceived as more transactional and more affected by outcomes than a central part of their organizational identity. Lastly, family businesses are usually perceived as flexible, which means they often are more accommodating to employees’ needs when it is necessary.
Millennials often are characterized as narcissistic, unwilling to commit fully to work, disrespectful of authority, lack focus and have a sense of entitlement. They are very attuned to technology, and for them, the internet is as important as oxygen.
At the workplace, they don’t necessarily talk, but they certainly text. I personally believe that such a characterization is oversimplistic, and those behaviors and attitudes might be a consequence of a lack of something at the workplace, not an antecedent that defines a generation. For example, they value having closer relationships with superiors and frequent feedback, which could be perceived by previous generations as somehow disrespectful.
Research has found millennials prefer flexibility, given that technology provides them with means to deliver from different locations in diverse ways and formats at any time. This means they don’t need to be permanently at their post from 8 a.m.-5 p.m. That doesn’t mean they are lazy. Lastly, they want to do something meaningful and work at organizations where their individual contributions to the bigger picture are explicit, well-known and rewarded.
We know that regardless of the type of business, having well-paid, motivated employees and a positive working environment associate positively with higher productivity and efficiency, and lower absenteeism and turnover. However, the motivations of millennials in terms of their duty, persistence and reward may need some adaptation for family businesses to attract, select and retain them as part of their workforce. Some changes are easier given that they can take advantage of characteristics family businesses already have and some others need some redirecting efforts. These are some suggestions:
- Connect family values to organizational goals: Reports show that although the values of millennials are not necessarily different from previous generations, their attitude at the workplace is different. Family businesses care about their values and their culture, so they need to make sure values are linked to what they are pursuing to have a highly engaged millennial workforce with a clear line of sight.
- Communicate organizational goals and frame individual contributions to their attainment: This is costly and difficult, but the more explicit each worker’s contributions are the more likely he/she will be satisfied with the job and be more committed to the business in the longer run. We already know satisfied workers contribute to performance and are more efficient, so it should be a good investment.
- Embrace flexibility as a policy not as an individual case effort: Family businesses are flexible, and they usually adapt when either a family or nonfamily employee needs them to. They must be creative in developing policies regarding employee mobility, and family and work models. Take advantage of technology.
- Create teams where millennials can feel engaged if the supervisor treats him/her openly and fairly regarding growth and promotion: Personal and online discussions, (texting included) where millennials receive feedback and bosses discuss opportunities with them need to be frequent.
- Develop a challenging work environment in which objectives and goals are clear and not so many tasks or duties: Research has even found that as opposed to previous generations, millennials don’t care much for a bad work environment if they perceive that they are contributing to organizational goals. Family businesses are proud of their work environment, and that is positive for others, but they need to get creative in assigning meaningful goals. If challenged, millennials will deliver.
In the end, we all need to understand millennials, since they will eventually be our employees, co-workers, supervisors and managers at the top level. Family businesses have an opportunity to adapt and change to recruit and hire the most talented of this generation in their workforce because “family businesses think differently,” as a Grand Rapids business family member said in one of my classes when asked about the benefits of working for one.
Ana Gonzalez is the director of the Family Owned Business Institute (FOBI) at the Seidman College of Business, Grand Valley State University. She can be reached at email@example.com.