Turnover intentions in a family business can lead to loss of prominent family employees, as well as leakage of information to competitors. However, when employees share the founder’s vision, as well as the integrated values of the family and family business, it is easier to reduce turnover intentions, or the anticipation of leaving one’s job, according to a recently published study.
“[The family business] may not be the first choice for some [workers],” Dmitry Khanin, PhD, visiting assistant professor at Texas Tech University, told O&P Business News. “They may have tried out many different jobs, but, after experiencing some failures, returned to the family business. These “comeback kids,” ironically speaking, may not be the most motivated employee. For some people, work is very important — maybe the most important thing in their lives — for others, not so much. Therefore, the centrality of work for a person may influence whether or not you he or she would develop turnover intentions.”
Centripetal, centrifugal forces
Centripetal forces draw employees into an organization and make alternatives less attractive whereas centrifugal forces make the existing job less attractive compared to alternatives. Depending on workers’ feelings about their position in the family business, several push/pull factors can drive turnover intentions.
It is important to understand that both centripetal and centrifugal forces may be related to internal and external push and pull factors that could influence turnover intentions. “When working in a family business there’s both the connectedness to the family, as well as the connectedness to the business,” Khanin said. “[Both factors] have an impact on family employees’ intention to quit or not to quit the family business.”
By analyzing centripetal and centrifugal forces, Khanin was able to break turnover intentions into four categories, or turnover zones: time-bomb, ineptitude, tug-of-war and best-of-both-worlds.
In the time-bomb zone, only the centrifugal tendencies operate whereas the centripetal tendencies are negligible. This means that a worker experiences both internal push, such as unhappiness with their current job, and external pull, such as looking at a superior alternative opportunity that is being perceived as attainable. Therefore, it is only a matter of time that an employee is going to quit his or her job.
On the other end of the turnover spectrum, is the best-of-both-worlds turnover zone. This is the situation that is potentially most beneficial for an organization. In this zone, employees both love their job and would hate to go anywhere else as they are not attracted at all to any supposedly greener pastures. Therefore, internal pull and external push work together and consequently enhance employee commitment.
According to Khanin’s study, when a centripetal force collides with a centrifugal force an employee ends up in the tug-of-war turnover zone. This happens when neither internal push nor external push is at work. In other words, an employee is attracted to his or her job (internal pull) and other employment opportunities (external pull) at the same time. In this tug-of-war situation, whether an employee stays or leaves depends on what force comes out on top. If the centripetal force (internal pull) is stronger, a person is more likely to stay put. If the centripetal force (external pull) takes over, an employee is more likely to quit.
Finally, in the ineptitude zone, centripetal forces (internal push) and centrifugal forces (external push) appear to be in balance. This happens when employees working in the family business are not very good at whatever they do and yet see no opportunities elsewhere (usually because they have tried many times and failed miserably). In the ineptitude zone, there are two types of workers: inept self-doubters and inept happy campers. In the case of an inept self-doubter, if the frustration with the existing job outweighs his or her fear of having to find a new, possibly more difficult, job somewhere else, turnover intentions may be high. Conversely, if the fear of change outweighs job frustration, turnover intentions may be low.
In contrast, an inept happy camper is unlikely to develop turnover intentions. This is because inept happy campers may realize that they do not do well at work but manage to suppress such feelings. Despite everything they know about themselves, inept happy campers are confident that they are indispensable or simply do not care if they are or are not. This can lead to principal-principal problems when family owners do more harm to their own business than any agents (non-family employees) could ever do.
“Family firms need to understand that principal-principal problems are real and may play a critical role in generating turnover intentions,” Khanin said. “Greater transparency and accountability, as well as professional human resource practices are needed in family and non-family firms alike to reduce turnover intentions.
“People may have very different motivations for staying or not staying with the family business, so family firms really need to pay more attention to different motivations that people might have in real life,” Khanin said. — by Casey Murphy
Disclosure: Khanin has no relevant financial disclosures.