Last week I had the opportunity to share a round table in Madrid with management profiles in times of transition, in which we were able to discuss, among other topics, the situation of the Spanish labour market and what companies are currently demanding, both at the level of positions and at the level of competencies.

During Question Time, one of the attendees asked me an interesting question: Do family business have greater difficulties in attracting talent compared to multinationals?

As we know, the family business, usually small/medium in size (with some notable exceptions) plays a significant role in the Spanish and European economy. Despite this, family-owned companies do face significant challenges when competing with large multinationals.

What are the main challenges?

1. Perception by the candidate. Sometimes, family businesses can be perceived as less professional, with less process and system, and less opportunity for professional development.
2. Compensation and other benefits. In general, family businesses have fewer resources and less developed compensation and benefits policies compared to large multinationals.
3. Culture. Their culture is usually linked to the values of the founding person or family. This can have advantages and disadvantages.
4. Stability. While family businesses are usually projects with a long-term vision, sometimes the lack of planning in the succession process, or conflicts between the same ownership, can destabilize the project.
5. Decision making. Although in multinationals the risk can be an excess of bureaucracy, sometimes decision-making in family businesses can be more political and reserved for a group of trusted people.

Obviously, the above points are not always met. In fact, due to our experience working with different types of companies, we sometimes see family businesses that work even more efficiently and professionally than some multinationals. But in many cases, the challenges mentioned are real and can hinder access to talent. 

In order to overcome the above challenges, family businesses can consider, among others, some actions such as the following: 

• Give external visibility on succession plans. Thanks to this, they will be able to give an image of transparency, stability, and long-term vision that will reassure both internal employees and potential candidates.
• Work on the image and culture of the family business. Behind family businesses, there are usually several strong values that define a culture. Defining these values well, transmitting them and respecting them is one of the keys to successful family companies.
• Linked to the previous point, it is also important that they know how to value some differential aspects of family businesses: long-term vision, proximity, care of employees, possibility of generating impact, etc. Defining and communicating it effectively is essential.
• Work on creative compensation and benefits policies. While it is very likely that most family businesses cannot compete in salary with multinationals, they do have many other things to offer both their employees and the external talent market.

In conclusion, it is likely that family businesses will need to go the extra mile and be creative to compete with the best talent. But there are multiple examples of family businesses that achieve this, and that have managed to differentiate themselves positively and position themselves as desired employers that offer first level professional projects.