Family businesses are optimistic about the economy and growth in 2024 and are planning more hiring and employee engagement

The second annual survey examines the mindset and priorities of U.S. family businesses across generations

ST. LOUIS, March 19, 2024–(BUSINESS WIRE)–Family businesses have become increasingly optimistic about the strength of their organizations over the past year and are focusing on recruiting and retaining employees, according to a new survey from the First Bank Center for Family Businesses. The survey also highlighted the different priorities of company founders and their future heads of family.

Overall confidence in the economy has risen sharply over the past 12 months, with 61% of respondents strongly agreeing with the statement: “I am confident about the direction of the economy over the next year,” an increase of 12%. Additionally, they are confident in the health of their own business: 75% of respondents strongly agreed, “I see our business and revenue growing over the next five years,” an 11% increase from last year and 68% represents a significant increase We agree that “our current business model can withstand ongoing uncertainty,” which represents an annual increase of 7%.

The U.S. economy is largely made up of family-owned or controlled businesses, which collectively account for 87% of American businesses. They represent more than 82 million jobs, or 62% of the nation's workforce, and represent 64% of the U.S. gross domestic product (GDP) – a total of $5.9 trillion1.

“Family-owned businesses drive our communities forward and the survey highlights their continued strength, resilience and innovative spirit in everyday life,” said Michael Dierberg, CEO of First Bank. “The 2024 Family Business Survey examines the changing dynamics of business priorities and strategies, with a focus on identifying different generational priorities in areas such as measuring success, the role of branding and the importance of philanthropy as part of their culture.”

Family business owners focus on recruiting and retaining employees. Hiring more staff was cited as a top business priority by 38% of respondents, up 18 points from 2023, and employee engagement and satisfaction rose 12 points to 35%, from 23% in 2023.

The story goes on

The survey also captured the different priorities of managers depending on their position in the family structure. Highlights include:

• At 55%, profitability is the most important success metric across all generations. However, founders (G1) value it more than second (G2) or third generation and beyond (G3+) leaders (G1:65%, G2:50%, G3+:43%). “Family unity and togetherness” (G1:28%, G2:35%, G3+:30%) and “continuation of succession” (G1:21%, G2:35%, G3+:30%) are other important success metrics for next generation leaders as founder.

• Respondents identified the skills next-generation leaders need to continue to be successful. “People Management” was highlighted as most important (G1:58%, G2:55%, G3+:58%), closely followed by “Passion for Business”. There was greater intergenerational variability with this attribute (G1:64%, G2:49%, G3+:46%).

• 70% of companies incorporate family business into their branding, with “telling our backstory/history” (59%) being the most common approach. Not surprisingly, the importance of highlighting a family business's brand increases with each generation (G1:57%, G2:77%, G3+:88%).

• Overall, third-generation leaders are most engaged in philanthropic and/or community support initiatives, followed by second-generation leaders. Founders are the least engaged: 26% say they are not involved in the community.

First Bank founded the Center for Family-Owned Businesses to leverage its experience as a fourth-generation family business to help other families achieve long-term business success across multiple generations. This survey provides insights into the challenges, opportunities and trends shaping the family business landscape.

“Family businesses face unique opportunities and challenges as they embark on a multigenerational journey, and our survey provides a snapshot of the current environment and guidance for long-term success,” said Ed Hart, senior vice president and director of the First Bank Center for Family Business. “It is inspiring to help these companies evolve and thrive by balancing tradition and innovation so that each family business endures for generations to come.”

The 2024 Family Business Survey was sent to family businesses across generations, industries and regions to provide insights on topics such as business goals and strategies, defining success, branding, next-generation leadership, philanthropy, and economic and development prospects. The study was conducted in collaboration with market research firm MacKenzie Corporation and included a survey of a total of 575 respondents.

Full survey results are available upon request or can be found on the First Bank Center for Family-Owned Businesses website.

First banking center for family businesses

The First Bank Center for Family-Owned Businesses was founded in 2021 to expand the focus and resources for family businesses. The center is led by Joe Ambrose, executive director, and Ed Hart, director. Together they have more than 60 years of experience in family businesses. The Center offers tailored resources to meet the unique needs of family business members, online tools, webinars and educational offerings for family businesses of all sizes. To visit the online resource, visit www.first.bank/Business/Plan/Center-for-Family-Owned-Businesses. For further information please contact [email protected].

About First Bank

First Bank, a subsidiary of FB Corporation, is one of the leading private banks in the country. As a family-owned business with four generations of independent, single-family homeowners, First Bank provides the stability and experience with long-term planning that helps businesses and the communities in which they operate grow and prosper. With $6.6 billion in assets and 80 locations in California, Missouri and Illinois, First Bank has developed a relationship-focused approach to providing comprehensive solutions to customers in business and consumer banking, wealth management, mortgage banking and more. For more information, visit www.first.bank.

1 2021 study from FamilyBusiness.org

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