Still in 2018, the statistics speak for themselves. Only 3 out of 10 owners manage to pass the torch, whether for family succession, key employees or external buyers, the results remain the same, and have been for many years; 30% succeed and 70% fail in their business transfer project. Some have to take over the reins and rebuild to minimize financial losses. Others leave their families to deal with a heartbreaking conflict.
The problem of business transfers in Quebec is far from resolved. In fact, according to Vincent Lecorne, CEO of the Centre de transfert d’entreprise du Québec (CTEQ), “nearly 30,000 business owners are planning to retire within the next five years, and the stakes remain high, despite the assistance announced in the last provincial budget“. If this figure is frightening, forecasts suggest that it will double in ten years’ time. Imagine 60,000 businesses closing their doors tomorrow morning. The results would be catastrophic for the Quebec economy. We’re talking about 100,000 lost jobs and $10 billion in lost GDP. That’s why it’s so important to think carefully!
Eighty percent of our businesses are family-owned, which represents over 55% of all salaries in Quebec, and 66% of our businesses currently have no succession plan. To understand the real challenges facing owner-managers, and why the 70% statistic recurs year after year, it’s important to realize that, first and foremost, it’s not easy for owner-managers to let go of their business after devoting so much time and energy to it. The process of transferring management involves various stages in which the owner gradually transfers knowledge and then power to his successor. Every organization is different, and there’s no one-size-fits-all recipe. The miracle solution lies in the preparation of the project and the involvement of both parties.
A human resources consultant brings added value to the success of the project, throughout the entire process. Intimately linked with organizational change, his or her role is primarily to assess the multiple risks associated with his or her field of expertise, and to target potential gains leading to the achievement or surpassing of expected operational results. In addition to managing the entire project process, the consultant will define strategies for integrating and harmonizing, partially or totally, future working conditions for the future players.
Regardless of the business strategy adopted, a transfer, merger or acquisition often represents one of the most extreme cases of corporate transformation. For the business owner-manager, relying on a strategic human resources advisor increases the chances of success, since the advisor’s role is to advise and assist in decision-making, which can have an impact on the entire organization, at all levels and in all specific human resources areas in potentially turbulent situations.
Don’t hesitate to contact our experts for any questions or support you may need.
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