It didn’t take long for the legislators attending this year’s first Congressional Family Business Caucus meeting to get an earful about workforce issues facing America’s largest private employer, family businesses.
This meeting was the first to include non-family employees of family businesses as well as family business owners.
It was held March 12 in the Longworth House Office Building, and the topic was near and dear to the hearts of those in attendance: workforce.
Six members of Congress spoke at this bipartisan meeting: co-chairs Brad Schneider (D-IL) and Claudia Tenney (R-NY), as well as Rep. John Duarte (R-CA), Rep. Marc Molinaro (R-NY) and Rep. Carol Miller (R-WV). The third co-chair, Rep. Jodey Arrington (R-TX), addressed attendees at a reception after the meeting.
Meetings now have topics tailored to critical issues facing generationally owned family businesses and their employees. The next caucus meetings are set for May 14 and September 18.
To date, the bipartisan caucus has 42 House members. The expectation is that the number will grow to 50 by the end of the year, considered lightspeed progress on Capitol Hill.
Early Research Results
During the meeting, early research from the Annual Family Business Survey 2024 was presented. As always, many of the results were a surprise to the caucus members and congressional staff members in the room.
The big difference this time was that the numbers were teamed with real-life stories told by the non-family employees in attendance.
Highlights from the research, which surveyed nearly 800 family businesses and family offices and centers in 40 states, found that the three tax policies “of top concern” to family businesses were: 1) income taxes (41%); 2) estate taxes (19%); and 3) payroll taxes (13%). Last year, the number one tax concern was also income taxes, but the concern was higher, at 50%.
Meanwhile, according to the research, the top economic policy priorities family businesses are looking at this year are: 1) “reduce the federal budget/debt” (30%) and 2) “reduce income taxes” (23%). This is a shift from last year, which saw “reduce income taxes” as the number one priority (19%) and “reduce/eliminate estate taxes” at number two (18%).
When it came to workforce issues, the top three challenges this year were: 1) recruiting & training (54%); 2) benefits/pay (25%); and 3) culture building (14%).
The survey also asked family business owners what they would do if they paid less in taxes. The majority of respondents (52%) said they would “invest more in their business,” while 30% said they would “pay more to employees” and 8% said they would “make distributions to owners.”
Real-World Work Stories
One real-world story came from non-family member Chris Paz, president of Los Angeles-based Trophy Automotive Dealer Group LLC, who spoke to the group about how unnecessary barriers hurt productivity. Trophy Automotive represents brands such as Mercedes, Kia and Nissan.
“Every day I see the truly unfair tax burdens and non-market-driven regulations, such as expensive electric vehicle requirements, that are driving small auto dealerships out of business,” Paz told the caucus members, family business owners and family office executives in attendance.
Other family businesses in attendance included Bush Bros. and Co., Golden Star Technologies, GSM Industrial, Global A1 Flagship Co., Laticrete International and Nielsen-Massey Vanillas.
Skilled Worker Shortage
The biggest workforce issue that came up during the meeting was the challenge of finding qualified workers — especially skilled technicians.
“The labor laws and immigration policies have a huge impact on our business,” Henry Ngo, senior vice president of Golden Star Technology in Cerritos, Calif., told the caucus attendees. “As a business founded by immigrants from Taiwan, there is a huge shortage of skilled professionals in the technology industry. We used to rely on trade and vocational schools, but these are gone. We’ve just had to learn how to do more with less.”
Balancing Act
Lawmakers also heard from business leaders in the manufacturing sector, who decried what they said were deep misunderstandings of the American supply chain and policies that have gone awry.
“Our biggest concern is dealing with policies that end up with unintended outcomes,” said Ron Nash, non-family president and chief operating officer of Laticrete International, North America. Laticrete, based in Bethany, Conn. is an international tile installation systems company. The stark reality, according to Nash, is “America needs to start inventing again.”
The research and development tax policies “need to be revised so companies can start investing in America,” Nash said. “We no longer are a country of doers and makers. We need to get back to that, back to inventing and investing in America.”
Long-Term Focus
Another non-family employee, Nichole DeGidio, vice president of human resources at Global A1 Flagship, a Navy and Defense Department contractor based in Orange County, Calif., spoke about how investing for the long-term creates stability and confidence.
“Working for a family business, I see the real commitment from owners to employees,” said DeGidio, who has worked for Global A1 Flagship for 16 years.
“It feels like family throughout the entire organization,” she added. “We see how the decisions are made for long-term sustainability and not for short-term profits. Opinions matter in our company, and there is a community connection. When we have stability, it creates confidence, and that is why we have so many multi-generational, long-term employees.”
Bush Bros. and Company Director of External Affairs Robert Loggins, a non-family executive at the Chestnut Hill, Tenn.-based bean company, focused his remarks on attracting Gen Z and millennial talent to the workforce.
“We are a rigorous employer in a small town, and it’s tough attracting young people, but we feel this as more of an opportunity than an obstacle once they come and take a look,” Loggins told attendees. “To keep them interested, we focus on being a great place to work and grow a career over time — and we offer great incentives, including giving distributions of over $500 million to employees over the last 25 years.”
Brian Dombach, president of GSM Industrial and a non-family member at the 200-employee industrial services company, echoed the industrywide issue of finding skilled workers.
“Our number one workforce issue is finding welders, technicians, hourly workers, ductwork workers,” Dombach said. “We just can’t find them; it’s something that needs to be addressed across all industries.”
The next Congressional Family Business Caucus meeting is set for May 14. The topic of that meeting will be succession planning.