Family firms 'tough on families'

The report found nepotism is not widespread

A survey of Scotland's family firms has suggested they do not offer an easy career and income for relatives.

Researchers looked at 200 firms and found less than one in five (18%) reserve managerial positions for family members.

The analysts, from the Glasgow-based Stoy Centre for Family Business, also found that just 5% of children expected to inherit a senior post.

They also found most family firms had established vetting procedures for managerial posts and two-thirds made a clear distinction between ownership and management.

Family businesses span a range of sectors

June Hunter, of the research team, said the findings dispelled myths about family businesses providing "jobs for life" for sons and daughters.

She said: "Today's increasingly competitive commercial world provides little refuge for under-performing individuals and the last few years have seen a significant change in the human resource culture within many organisations."

She added that an "encouraging" level of professionalism in their recruitment policies was displayed among family firms.

About two-thirds of the surveyed companies relied on formal procedures such as interviews and psychometric testing, a figure which rose to three-quarters among businesses where ownership and management was clearly divided.

'Formal systems'

While more than a third of owners expected or wanted their children to join the company, only 13% of the younger generation expressed an interest and just one in 20 expected to become involved in management.

Nearly a third of the businesses surveyed were more than 100 years old and 40% employed more than 100 people.

Ms Hunter said: "Where formal systems were in place, this tended to be within older, better-established businesses, a reflection perhaps of the degree to which they have had to professionalise as they have grown.

"But irrespective of size and complexity, the failure of family businesses to follow basic business principles in respect of recruitment - hiring individuals according to their family status and not their competence - can threaten the firm's effectiveness and, ultimately, its very survival."