Succession planning is an important topic among contractors of a certain age, and making decisions about the future of a family-owned business is a major task. Discussions about succession planning are not likely to go away in the future; indeed, they have become more complex with more alternatives than ever before, Wayne Rivers writes for Construction Dive. Rivers discusses several reasons why conversations around succession planning have evolved in the 21st century.
Education
Most successful contractors believe in quality education, and they invest, sometimes quite heavily, in their children’s educations. In some cases, the children may even become “too educated" to become contractors. For example, a son or daughter who attends medical school may be unlikely to join the construction industry.
Postponed Marriages
People are marrying later and having children later in life which, in turn, means their children may be quite young when the parents inevitably start thinking about their business exits around age 55 or 60. At age 60, for example, they simply can't afford to wait 10 additional years to assess whether or not their kids are attracted to construction and possess the characteristics that would make them successful business operators.
Business Complexity
The construction industry has never been more complex. For previous generations, a son taking over dad’s business wasn’t so different from dad taking over his own father’s company years prior; the pace of change was less aggressive. Today, any construction business of any size has an incredible number of moving parts, not the least of which is technology.
The War for Talent
Talented employees have greater leverage now than they ever have had. In fact, it's not uncommon for talented non-family employees to ask for a "piece of the action” in the form of company ownership. Even if they're not pressing for ownership, they often demand transparency into the succession plans of the leadership generation. They want to know that the careers they have carved out will be preserved through robust ownership, management and strategic succession planning.
