Irish family firms cut more jobs than European peers
Irish family firms cut more jobs in the past year when compared to their European peers, according to a new report.
The study by the Step Project Global Consortium and KPMG Private Enterprise found that employment in Irish family firms was 15% lower than pre-pandemic levels.
That compares to a fall of 4% across European family firms.
“Irish family businesses are mostly in the hardest-hit sectors; retail, food and agri, leisure, hospitality,” said Olivia Lynch, partner with KPMG Private Enterprise. “So it’s unsurprising to see those kinds of reductions in revenue and employment levels.”
Ms Lynch said firms here favoured furloughing where possible – which she said highlighted the value of Government schemes designed to support businesses during the pandemic.
The survey also found that 68% of Irish family firms saw revenues fall in the past year – which is slightly higher than the one seen across Europe but just below the global average.
Just 5% of Irish firms said revenues had risen in the past year, which is about half the European and global average.
The global survey involved 2,500 family businesses, 59 of which were in Ireland, and 500 non-family businesses.
The Irish respondents were generally larger firms, with two-thirds having more than 200 employees.
The Irish companies were also older, with more than half being second or third generation businesses.
In their response to the pandemic, about a third of Irish firms sought to cut labour costs, while another third reevaluated planned investments.
Just less than a third sought to restructure costs or loan payments, while just 8% cut the pay of senior staff. According to Ms Lynch, that was broadly in line with what other European firms did.
“When we delved into that question more, it was clear form an Irish perspective that they looked at alternative ways to incentivise management and employees rather than just using pay freezes,” she said. “It shows that Irish businesses are adaptable and willing to find new ways to incentivise workers.”
She said that Irish family firms were also optimistic about their prospects, despite the ongoing pandemic. For some the past year may even prove to be a positive in terms of their future direction, she said.
“What we’ve found in dealing with family businesses is that there is clear optimism out there… they’re scaling and talking about diversifying again,” said Ms Lynch.
“There’s been an unexpected benefit with the gift of time – a slowdown of operations has given time to explore new products and markets and implement these digital solutions… all of these will come together to make family firms part of Ireland’s recovery.”