Family businesses in the US have been largely resilient over the last few years, hiring and retaining employees, but concerns about tax regulations and the new healthcare law could now hit family business employment.
That’s according to a new study by Family Enterprise USA, which drew on responses from 300 family-run firms in the US operating in sectors such as manufacturing, finance, restaurants and agriculture.
Although half of the respondents saw flat or lower revenues during the worst of the financial crisis, only about 34% reduced their workforce, found the report.
Family businesses were also optimistic about the year ahead, with more than 50% of those surveyed looking to hire more employees in the next 12 months.
Much of this positive outlook was thanks to the long-term vision of family-controlled companies, reckons Ann Kinkade, president of FEUSA.
“Because of their focus on long-term, sustainable growth, family-owned businesses are committed to their employees and communities over time,” she said in a statement.
In fact, one-third of the older firms in the US – those in operation for 60 to 100 years – increased the number of workers over the last couple of years, said the survey.
“Family firms have leadership tenure four to five times longer than shareholder-controlled businesses. They also have greater workforce stability and are more likely to hire and retain employees in the face of a tough economy,” added Kinkade.
However, concerns about tax and regulatory issues in the US could be detrimental to job growth, said the respondents. More than 50% of those surveyed were in favour of long-term predictability of tax conditions, rather than receiving short-term tax breaks.
Rules on estate tax, as well as the ongoing debate about cutting US corporate tax rate, is also a top concern for family businesses, said the report.
With family businesses in the country accounting for around 60% of total employment, owners are also worried about the new healthcare law, found the study. More than 60% of the American family firms said the new regulation will “make it harder to pay for employee healthcare”.
Minneapolis-based FEUSA is an independent and non-profit organisation that focuses on American business-owning families. There are around 5.5 million family-run groups in the US, contributing 57% of the US gross domestic product.