Question:
I grew up working in our family’s business under my dad’s mentorship. I’ve learned a lot from him and have always admired him. Many years ago, my dad and I agreed that when he retired, I’d pay him fair market value, minus a deduction for sweat equity, for the business. That’s three years from now.
I’m worried about the shape the business will be in if my dad doesn’t make changes soon — or at least allow me to make changes. We haven’t made a profit since last October and have been in the red since January. The problem: our employees. All but one of the solid ones have retired. We can’t seem to hire good replacements, or at least not ones who stay when they find other employers who allow them more flexibility. We can allow some employees to work from home for part of the week and allow other employees to come in an hour later or leave an hour earlier as long as they get all their work done.
My dad has owned this business for 30 years and insists on managing it the “way he’s always done it.” He’s “married” to 8 to 5 as the workday and reminds me the business consistently made a profit under his leadership. When I argued, he got angry and said, “Those things you learned in college don’t necessarily work in the real world.”
We fought and haven’t spoken since. How do I get through to him when even our financials don’t convince him we need to change how we run things? And is it best to wait for him to say something?
Answer:
Why wait? If you want to break this logjam, apologize to your dad for arguing. Tell him what you’ve told me, that you admire him. You won’t get through to him by fighting; he knows how to dig in his heels when someone comes at him. Further, he may believe your business can ride things out, as anyone who’s been in business for 30 years has weathered times of low to no profit. He’s possibly forgotten, however, that part of what brought him success was learning every day what worked, what didn’t, and realizing “here’s what’s changed and here’s how we need to adapt.”
Talk with him about the challenges you see, so you and he can together create a game plan. Here’s what you, your dad and other business owners need to face.
Recession
A recession may be coming. According to the Conference Board, a member-driven think tank that offers future predictions, over 60% of CEOs anticipate a recession coming in the next year. Another 15% of surveyed CEOs report their region is already in recession. Layoffs and hiring freezes are occurring in the tech world. The number of #OpentoWork banners on LinkedIn profiles have hit the level seen when the pandemic began.
Employee leverage
Despite the looming recession, there are still 5 million more job openings than unemployed people in the U.S. For many months, half of all employers haven’t been able to fill their open positions. With employers desperate to fill vacancies but unable to find solid job candidates, talented applicants receive multiple job offers. Employees expect a lot and leave employers that won’t give it.
Workforce changes
As I wrote in last week’s article, many employees gained “COVID clarity” concerning their life priorities as a result of the pandemic disruption. They became less willing to sacrifice to “get ahead” with their employer. You can, however, find solid employees who want what you and your father offer, a solid small business under stable leadership — if you’ll meet them halfway.
Don’t argue for flexibility; give your dad the facts. Half of the 1,583 professionals surveyed by Harvard Business Review stated that they would leave their employers if offered a more flexible alternative. Deloitte & Touche’s research puts bottom-line numbers to the importance flexibility plays in retention. Their data reveals a $41.5 million savings in employee turnover costs by retaining employees who stated they would have left if they hadn’t been able to work a flexible schedule.
According to a 2018 survey by FlexJobs, 80 percent of employees surveyed reported that they would choose a job offering a flexible schedule over one that did not. These employees also stated they would feel more loyal to employers that provided a flexible work schedule. Additionally, 35 percent of surveyed employees stated they prioritized a flexible work schedule over a more prestigious position and 30 percent reported they placed a higher value on a flexible work schedule than on additional vacation time.
Finally, three years goes by in the blink of an eye when one owner transitions to another. Remind your dad he might want to start loosening the reins.