Family run businesses employ nearly 1 million people in Ireland - which is twice as many as Foreign Direct Investment and the State combined.
The National Family Business Sentiment Report 2021 shows that they want to employ more people, but it also found that Covid supports are acting as a disincentive to people returning to work.
Eight out of 10 family businesses hope to hire new employees in the coming 12 months if there is a supportive political and economic environment.
John McGrane, Executive Director of Family Business Network said the best way to get people back to work is by incentivising all possible measures to show people that there are jobs available.
"They need to be taken and the family busnesses who provide most of them are ready, willing and able to hire them back.
"There has been some disincentivising of the retaking of jobs through things like the Pandemic Unemployment Payment, and happily that's beginning to move forward now," Mr McGrane said.
There has always been a lot of focus on attracting Foreign Direct Investment to Ireland. Family Business Network believes there should be a similar focus on scaling up Irish family-run businesses. Mr McGrane said there are businesses with that potential.
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"The reality is Ireland has done tremendous work to attract strategically the world's best FDI companies. The IDA has done wonderful work.
"Enterprise Ireland has done wonderful work in terms of supporting the indigenous sector as well, but there is definitely space to create an even stronger focus on supporting the indigenous sector.
Mr McGrane said Ireland may have passed peak FDI.
"Changes in global taxation, changes in international working from home practices etc, mean the faster growing sector is probably going to be our indigenous sector, and the good news is that family firms are inherently pro-growth. They buy local, they hire local, they support local and they vote local, and they are at the heart of every local movement.
"They are the people who make your porridge and process your payments like Flahavan's and Fexco. This opportunity arises now as we go into a budget to talk about maximum incentives to grow indigenous businesses."
The second annual report compiled by Smith & Williamson provides an insight into the current sentiment of family business.
Despite the cost of Brexit and ongoing supply chain issues, 60% of Irish family-run businesses are feeling more optimistic about their ability to do business and hire new employees compared to three months ago.
80% are likely to create new jobs within the coming year, up from 60% recorded in the first report published in November of last year.
Taxation was ranked as the number one concern of the indigenous family-owned sector, with high levels of Capital Gains Tax and the Capital Acquisitions Tax proving to be key obstacles to growth.
Only family businesses face a need to sell off parts of their business when transitioning management to the next generation.
Continuing Government supports for family businesses and the cost of business insurance were ranked the second and third greatest concern.
Family firms have mixed views on the future of the workplace environment, with 41% planning for a full return and another 41% anticipating a hybrid model.
John McGrane, Executive Director of Family Business Network, said it is clear from the report that family-run businesses are eager to play their role in supporting a jobs-led recovery that Ireland needs right now.
"Family firms want to hire more people, invest and support both their local and national economies," he said.
"But this growth is contingent on a policy and economic environment which nurtures and supports home-grown family firms," he said.
"Targeted reforms to Capital Gains Tax would help unlock investment in family-owned businesses and remove the threat of families being forced to sell key parts of their business as it passes from one generation to the next. With Ireland's FDI friendly tax policies under pressure, Government will depend on family-owned businesses to deliver Ireland's ambition of having 2.5m at work by 2024," he stated.
Con Casey, Director, Smith & Williamson said the National Family Business Sentiment Report 2021 is a key touchpoint in understanding their challenges.
"The report truly highlights how vital local employers are to the Irish economy. Family business owners need support as they face serious disruption from the pandemic, the aftershocks of Brexit and inflationary pressures in the costs of doing business, undermining Ireland’s competitiveness," he said.
"Many family business owners have stayed in their business, not wanting to hand over to the next generation until Ireland’s economy has stabilised. We hope that this report can help re-mobilise these vital businesses for growth and help Ireland efficiently move forward to renewed economic and cultural vibrancy," he added.