Scotland’s family businesses have been among the most impacted in the world from the pandemic according to new research.
KPMG’s Global Family Business Report questioned almost 3,000 family-owned firms around the world, including leading companies in Scotland, exploring how the pandemic has hit revenues and growth plans.
The data reveals Scottish companies are among the most impacted by the pandemic, alongside fellow businesses in England and Wales, with 80% saying Covid-19 has affected revenues – 11% percent higher than the global average.
Meanwhile, UK family-owned businesses say their priority strategy throughout the restrictions has been making use of the furlough scheme. Across Europe and the Americas, most companies said their priority was adopting remote working practices, while in Asia and the Middle East the top strategy was freezing recruitment or cutting staff numbers.
While KPMG’s research highlights the challenges facing the sector, some of Scotland’s oldest companies remain fiercely independent with right heritage and generational insight, helping to build resilience. Described as the ‘backbone’ of the Scottish economy, family-owned businesses contribute billions to Scotland’s finances, with the top 100 alone employing more than 112,000 people and generating turnover in excess of £20 billion.
Kirsty Ross, KPMG’s Head of Family Business in Scotland, said: “It should come as no surprise that our research has highlighted the impact Covid-19 has had on family-owned firms. Scotland is home to some of the largest percentages of family firms in the world – many of them household names in the food and drink world, hospitality, agriculture and retail.”
“The last few years have taken their toll, from Brexit to the pandemic, but there is a constant theme throughout this. When I speak to business leaders, they tell me that they’ve been here before. Generational insight and history enables family companies to look back at past challenges and learn from each other.
“It’s that sense of resilience that ensures that they continue to play such a pivotal role in the future success of the country’s economy.”
The new data follows increased investment from KPMG in its Scottish Family Business team. The firm recently appointed a Private Client Tax Director, focusing on private wealth and shareholder advice – an increasing area for family businesses as they enter the post-pandemic recovery period. KPMG has also invested in specialist training and qualifications, with a number of people across its three major Scottish offices now ‘STEP’ qualified.
STEP is the global professional association for individuals and organisations advising families across generations and its certifications are regarded as the gold standard for experts offering practical advise and support to family-owned companies.
Private Client Tax Director, Chris Smith, added: “Our investment in qualifications and people at KPMG is part of our renewed commitment to support family owned businesses across Scotland. They play such a significant role in the country’s economy and it’s imperative that we’re there for them at a time of great challenge and uncertainty.”
“Our data highlighted that many family firms have tapped-in to government support like furlough and they’ve been able to ride out much of the storm. The next few months will be crucial for many as we all start out on the road to recovery.”
“It’s more important than ever that family firms exploit their generational insight and experience, collaborate with other companies in their space and identify and make use of the support available to them to ensure that they remain a central part of Scotland’s long-term sustainable growth.”