Nepotism is hitting firms
Don’t rely on relatives, companies told
Family businesses in the Middle East need to move away from traditional hiring practices and employ more women in senior roles to keep going, as the economy and wealth creation is expected to slow down.
These were among the findings of property and business consultancy Knight Frank’s 2016 Wealth Report.
“A trend we have been noticing in family business and wealth management is the rising involvement of women,” said Nada Al Hashimi, a Family Office Analyst at the firm.
“The number of high networth female individuals has been increasing faster than that of male high networth individuals.
“In the Middle East, where societies are more traditional and the senior seats are dominated by the male figures in the family, more women are studying abroad to come back home with a strong set of skills and expertise ready to take on senior roles in their family businesses.”
The report also warned that family businesses are too quick to employ relatives for the sake of it, something that can have a detrimental impact on the company in the long run.
“Most family businesses do not make it through the generations mainly because they do not have a solid succession plan,” she said. “To ensure these businesses are maintained over many generations several steps could be adopted, including hiring employees that are not family members and focusing on communication.”
The report also says that following years of considerable growth in the number of wealthy individuals around the world, the world is entering a period of deceleration, as China’ s economy slow sand commodityexporting emerging economies are being hit by lower prices and demand.
One concern that was flagged up in the report of the ultra wealthy was that family companies would not pass through the generations.
4% The amount of family firms that make it to fourth generation of ownership by the same family