NEW RESEARCH | How family-owned small businesses solve skills shortages

In rural areas, there is a major shortage of the right skills for business. So how are the smallest family businesses dealing with the situation?

There is a general skills shortage in Sweden. The situation is particularly serious in rural areas, where there are many small businesses, most of them family-owned. It is a group of companies that is important for the national economy because they employ many people. And small family-owned businesses in rural areas face specific challenges when it comes to finding the right employees for their businesses.

– They often have family-specific values that make it particularly difficult to find employees. They want to ensure that values are passed down through generations. Therefore, the business owners are cautious about hiring people who are not family members, which of course puts extra obstacles in the way of many of them,” says Kristin Sabel, Mid Sweden University in Östersund.

Co-opetition common

In her doctoral thesis, she has studied the strategies used by small family-owned companies in Småland and Jämtland in the manufacturing and tourism industries to deal with the skills shortage.

– To meet the urgent needs for skills, they use short-term strategies rather than long-term ones. For example, it is common for them to cooperate with competitors. They also use seasonal workers to a fairly high degree, as well as hourly workers.

– Short-termism often means that the owners work more, and they are not as profitable as they could be if the right skills were available, says Kristin Sabel.

“Should be more open”

The study shows that small family-owned businesses in rural areas would rather hire someone they know a little, but who does not meet the skill requirements, than someone who has the right skills but is unknown to the family.

– This means that they themselves block certain competences that they would need. Family values and norms are very important in these companies. One could argue that they should be more open to ‘strangers’, as this would create better business opportunities.

So if smaller family-owned businesses in rural areas could be more open to getting the right skills for their business, what do they think politicians should do about the skills shortage?

– The Employment Protection Act (LAS) is a problem for many. They don’t dare to hire because they risk not being able to get rid of people who don’t fit the business.

– And there is a demand for vocational training that matches the needs of small businesses in rural areas. As it is now, it is the responsibility of companies to train employees internally. It’s an expensive business, and entrepreneurs believe that matching skills and demand should be society’s responsibility, says Kristin Sabel.

Contact kristin.sabel@telia.com

More about the thesis
Kristin Sabel recently defended her dissertation at Mid Sweden University Competence in Rural Family SMEs: An Exploration of Challenges and Strategies . The study is based on 35 interviews and around two hundred survey responses.