Even as contractors age and seek to transfer firm ownership and management to a younger generation, more are finding that the recession and inadequate transition planning likely will keep them on the job longer. In a new study, industry management consultant FMI says that even though more than half of those construction firms surveyed will change ownership in the next decade, 52% of contractor-owners don't have management in line to replace them and 56% have not developed a formal ownership transition plan.
In a study sent to 6,700 contractors with revenue of more than $15 million, nearly two-thirds of the 4.1% of owners responding say the recession has impacted their companies' return on equity. Since FMI's last ownership-transition survey, conducted in 2007, the firm also says the proportion of respondents over the age of 60 rose to 32% from 20%. During the same time, more than 33% of respondents saw declines in company return on equity exceeding 20%. The trend is pushing more owners to postpone retirement "to rebuild their business in the wake of the economic decline," says FMI.