03 Nov 2015
Four in five Singapore family businesses surveyed say they are focused on continuity and long-term stability, but many find talent recruitment and development a challenge.
SINGAPORE: Family businesses in Singapore and the region view talent recruitment and development as the main challenge towards the long-term future of their companies, according to a report by United Overseas Bank (UOB) and the Singapore Management University’s Business Families Institute (BFI@SMU) released on Monday (Nov 2).
The survey also showed that four out of five Singaporean family businesses are likely to place the most emphasis on balancing growth with stability and continuity as compared to short term gain. When compared to their peers in China and other countries in Southeast Asia, they are also the most risk-averse, where only 29 percent willing to take high risks. The other countries in the survey include China, Myanmar, the Philippines, Thailand, Malaysia and Indonesia. In Singapore, family firms make up 60 per cent of SGX-listed companies. According to Professor Annie Koh, the author of the report, many family businesses in Singapore are helmed by second generation leadership going into the third. And transiting into the third is critical in ensuring the long term sustainability of the company.
She said: “In fact, SPRING and IE are talking about growing the talent pipeline of family owned business, consisting of trusted family members, as well as outside family members. “I've seen some family owned companies who actually trust their non-family members a lot, because they have grown up with the company, and some of them the children of their own management team are also in the family." Mr Eric Tham, UOB Managing Director and Head of Commercial Banking, said: “Many Asian business families are at various stages of preparing for the next generation to succeed them and they recognise the need to have professional help to ensure that their business grows and remains competitive.” He added: “These professionals hold the specialist skills that business families require for a more resilient and sustainable business in these uncertain times. They also help to nurture the next generation of family members through knowledge transfer, coaching and mentoring.”