The report shows that establishing credibility within the family business is one of the greatest challenges for Gen Y, with 88 per cent saying they have to work harder than others to defend themselves against perceived nepotism, yet less than half (46 per cent) had worked outside the family business.
PwC's private clients team national managing partner, David Wills, said that taking over the family business is no longer a given, with many current owners looking outside the business for the next CEO.
“For those in the next gen who want to step up, they must be prepared and properly trained in the business to improve their chance of success,” he said.
"Gaining additional experience outside the family firm is one way the next gen can build up their credibility while also broadening their exposure to new ideas and ways of doing things," added Mr Willis.
With many baby boomers choosing to work longer, time between succession points in family businesses is increasing, Mr Willis said.
"This differing mindset between the young guns who are raring to go and the older generation who don't feel they're ready can lead to ‘sticky baton' syndrome, where the current generation hands over the business in theory, but in reality retains control over everything that really matters," he said.
"This may lead to ineffective decision making and poor communications that may ultimately impact the business's success and disrupt family harmony.
"This means many next gens feel like they're in permanent limbo and wondering if they will ever get their chance at the helm."