The conversation around multi-generational workforces in family businesses often centres on the arrival of Gen Z into the workplace. Yet, there is a growing, less-discussed dynamic that presents unique challenges: older generations are living longer, staying active later in life, and, in many cases, remaining closely connected to the family business. This longevity can create complexity, especially for the generation in their 50s and 60s who find themselves managing the business without ever fully stepping into control.
Traditionally, family businesses followed a relatively predictable leadership structure. The founders passed the baton to their children, who then passed it on to the next generation. Today, however, we see more instances where individuals in their mid-career years – the ‘now’ generation – are running the business operationally but lack formal authority, ownership, or decision-making power. This dynamic can lead to frustration and uncertainty, particularly when these individuals start to consider their own plans for the future.
Longer Lifespans, Delayed Transitions
Longer life expectancy means that business founders are often still actively involved well into their 70s and 80s. While their experience and wisdom are invaluable, it can sometimes create uncertainty around leadership, direction, and decision-making. For the generation below, the prospect of stepping into a leadership role at an age when their peers in non-family businesses are beginning to slow down can feel daunting.
We have seen cases where individuals have been ‘waiting in the wings’ for decades reach their late 50s without ever having full ownership or the authority to implement meaningful change. This situation can make succession planning even more challenging, particularly when the next generation is already entering the workforce.
The Impact of Tax Changes
The recent changes to Business Property Relief (BPR) and Agricultural Property Relief (APR) have caught many families off guard. For decades, these reliefs provided a level of predictability when planning for intergenerational transitions. Now, with the landscape shifting, some families are finding that the decision to delay succession may have unintended financial implications.
In practice, this means that businesses need to be more proactive than ever about their succession plans. Waiting for the older generation to voluntarily step aside is no longer just a leadership question – it is a tax and estate planning issue as well.
Finding a New Balance
So, how can family businesses address these challenges? Here are a few considerations:
- Clarity of Roles and Responsibilities: Clearly defining roles – particularly for the ‘managing generation’ – can reduce frustration and confusion. Even if formal ownership remains with the older generation, providing greater autonomy can empower the current leaders to make necessary decisions.
- Open Conversations Across Generations: Honest discussions about long-term intentions can help avoid misunderstandings. This includes talking openly about when and how the older generation might step back, what the managing generation wants from their remaining working years, and how the younger generation can be involved without feeling the weight of premature expectations.
- Early Planning for Succession: Succession should be viewed as an ongoing process, not a one-time event. Starting conversations earlier – particularly in light of changes to BPR and APR – can give families more options and greater flexibility.
- Supporting the Older Generation: Many founders struggle with the prospect of stepping back, not necessarily due to a lack of trust but because their identity is so deeply tied to the business. Supporting them in finding new roles, such as mentoring, philanthropy, or advisory positions, can make the transition easier for everyone.
The Need for Adaptability
Family businesses have always needed to adapt to survive. Today, that adaptability must extend to how they think about leadership transitions. With longer lifespans, more active older generations, and shifting tax regulations, the ‘now’ generation can no longer afford to wait indefinitely.
At TWYD, we work with families to manage these generational complexities. Our focus is on ensuring that talent decisions are not only right for today but also sustainable for the future. By acknowledging the realities of multi-generational workforces and planning ahead, family businesses can create smoother transitions, stronger relationships, and long-term success for generations to come.
About the Author: David Twiddle is the Managing Partner of TWYD & Co, a private talent advisory firm that works exclusively with family businesses and family offices. He and his team specialise in recruiting non-family executives and addressing the distinct people challenges found in family-owned enterprises.