Family businesses are optimistic about the future as the State opens up, even though almost half expect sales to have shrunk over the past year due to the impact of the Covid-19 pandemic, according to a new survey.
PwC’s 2021 Irish Family Business survey, published on Tuesday, says 58 per cent of companies surveyed are confident about growth ambitions for this year. This compares to 65 per cent worldwide.
Irish family businesses say they will take a people-first approach, prioritising the wellbeing of employees more so than their global counterparts. Eighty-one per cent retained as many staff as possible during the pandemic compared to 71 per cent globally. Almost half topped up the wages of staff on Government employment retention schemes, well in excess of the experience worldwide (21 per cent), while 59 per cent provided emotional and mental health supports to staff.
Family shareholders also made sacrifices, with 42 per cent taking a salary cut to support the business during the pandemic, nearly a third more than the international experience (31 per cent).
On the environment, nearly six out of 10 Irish family businesses feel they have a responsibility to fight climate change and its related consequences, but only 35 per cent said reducing their organisation’s carbon footprint is a top priority.
Irish family businesses lag their global counterparts in terms of climate action and have identified it as an area that requires more focus. Just four in 10 reported “putting sustainability at the heart of everything they do”. The international figure is just shy of 50 per cent. Only 32 per cent have a developed and communicated sustainability strategy in place.
John Dillon, leader of PwC’s entrepreneurial and private business practice, said: “They feel that to be relevant and attractive to consumers, suppliers and employees, sustainability needs to be central to their business operations.
“They’re telling us it needs to be more than simply embedded within corporate giving activities. For Irish family businesses this is not just about stating a commitment to doing good, but about setting meaningful targets.”
Digital skills
Elsewhere, nine in 10 Irish family businesses adapted to the challenges of the pandemic by enabling home working for employees (the global figure is 80 per cent), but just 42 per cent described their digital capabilities as “strong”.
There is recognition that more investment is needed as 48 per cent reported that improving digital capabilities is the second greatest priority for Irish family businesses for the next two years.
In particular, cybersecurity is seen as a critical area for ongoing investment to ensure these businesses can withstand the losses caused by a potential cyber attack. Some 44 per cent of respondents to the PwC 2021 CEO private companies' survey expressed "extreme concern" about cyber threats, up from 32 per cent last year.
Half stated that their organisation is explicitly factoring cyber threats into their strategic risk management activities, while nearly a third plan double-digit investment in cybersecurity and data privacy.
On succession planning, only 23 per cent of Irish family business leaders claim to have a robust, documented and communicated succession plan in place, although this is up from 18 per cent two years ago.
