Blood, Sweat, and Business: The Art of Hiring Family Members

23 Jan 2024

Published in: Member News

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Navigating family hires in small business brings trust and shared values, but challenges such as blurred boundaries. Emphasizing fair practices, clear communication, and external insights helps safeguard your business. Consider these tips to take a balanced approach when employing family.

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As a seasoned HR consultant, working in the field of small businesses and their people dynamics, I often deal with the intricacies of hiring family members. Indeed, most of my clients have a family member in their business somewhere. And it ain’t always pretty.

I can see the attraction, of course. Often, the thought of hiring a family member can be comforting because you already know and trust that person. And when you’re growing your business – that business you’ve poured your blood, sweat, and tears (or at least your heart and soul!) into, it can be hard to entrust some of that to anyone, let alone a stranger.

Hiring family members can be a positive experience

Certainly, there can be several pros to working with family members:

• The relationship already has the foundation of trust and loyalty underpinning it. Unlike employees who may come and go, family members are inherently invested in the success of the business. This dedication can create a cohesive team with a shared commitment to the company’s growth.
• The alignment of values and goals within a family can be a powerful driving force for a small business. When relatives work together, there’s often a natural harmony in ethics and long-term objectives. This alignment can streamline decision-making processes and foster a strong, purpose-driven company culture.
• The comfort and familiarity shared among family members can be a blessing for strong communication. There’s often an unspoken understanding that can enhance efficiency, reduce misunderstandings, and lead to a more collaborative and communicative workspace.
• Families are accustomed to adapting to each other’s needs and navigating changes. This inherent flexibility can be a significant asset in the dynamic landscape of small businesses, where adaptability is often the key to survival.
• There may even be some small financial benefits.

The downside to hiring family members

And equally, hiring family members can also have its downsides:

• While the family bond can be a strength, it can also blur the lines between personal and professional relationships. Maintaining a professional approach and setting clear boundaries becomes crucial to prevent the breakdown of professionalism within the workplace.
• Familiarity can lead to assumptions, and assumptions can lead to misunderstandings. Clear and unbiased communication becomes paramount to avoid conflicts arising from misinterpretations and unspoken expectations. The challenge lies in addressing issues openly without letting them fester.
• One of the most significant pitfalls is the perception of nepotism. Non-family employees may feel side-lined, impacting team morale. Striking a balance between recognizing the contributions of family members and ensuring fairness to all employees is a delicate but necessary task.
• Hiring based solely on familial relationships can lead to skill mismatches. Addressing performance issues objectively becomes challenging when personal ties come into play. Striving for a balance where family members bring both relational and professional value is essential.
• Planning for the future, especially in passing down the business to family members, introduces a new set of challenges. The expectations of both family and non-family employees need to be managed delicately to maintain harmony within the business.

Key problem area: Recruitment

One of the biggest areas of contention is when a family member is brought in, most likely into a senior-level role, and other team members perceive this to be unfair.

Make sure that your recruitment process is fair and consistent, even for family members. Advertise vacancies openly, accept applications, conduct interviews, and make employment decisions based on merit and qualifications. This transparency will not only foster a fair workplace culture but also minimise potential accusations of favouritism.

Demonstrating a commitment to fair hiring practices helps maintain credibility within the broader employee base and reinforces the principle that your family members are held to the same standards as any other suitably-qualified candidate.

Key problem area: Pay and benefits

Also make sure that you act fairly when it comes to paying your family members. Look to industry standards and the current job market to keep you on track. Base salary, bonuses, and benefits should be determined by the same criteria applied to all employees, to demonstrate fairness and equality.

Fair pay practices contribute to a positive workplace culture, reducing the risk of resentment among non-family employees and reinforcing the perception that everyone is rewarded based on their contributions, and not their bloodline.

Top tips to safeguard your business

In some cases, it’s too late and family members are already well ingrained in the business. And quite often it works well and the business thrives. But in all cases, there are things you can do to make sure that if family and business intertwine, the business is safeguarded.

• Establish clear expectations and define roles. Clear job descriptions, performance expectations, and professional boundaries help maintain a structured work environment. Ensure that everyone, regardless of their last name, understands their responsibilities.
• Combat communication breakdowns by prioritising open and transparent communication. Regular team meetings, performance reviews, and an accessible feedback mechanism can help ensure that expectations are well understood and conflicts are promptly addressed.
• To address concerns of favouritism, create a fair and transparent work environment. Establish clear policies and procedures, ensuring that promotions, raises, and other recognitions are based on merit and performance rather than family relationships.
• Recognise the value of external perspectives. Engage business consultants, mentors, or advisors to provide impartial insights and strategies. An external viewpoint can offer valuable guidance in navigating family dynamics within the business realm.
• Have a policy in place that clearly outlines your determination not to favour employees that are related. This might be a bit much if it’s just one or two family members, but as your business grows and/or you hire family members of your employees, a policy on your approach may be wise.

Make a balanced decision

In general, if a client were to ask for my advice on employing a family member, I would say ‘Don’t do it!’ But rarely is the world of employment law ever that straightforward. If you’re thinking of hiring a family member, strive for balance by considering all the pros and cons, as well as asking yourself how you’d deal with a worst-case scenario situation. Picture yourself having a difficult conversation with your family member – making them redundant, or sacking them, for example.

A client of mine recently dismissed a relative the week before Christmas. Slightly awkward seeing as they were all supposed to be together for Christmas dinner – I think alternative plans were swiftly made!

Overall, navigating the complexities of employing family members requires a careful balance between the benefits it undeniably brings versus the potentially damaging pitfalls. While family bonds can bring trust and alignment of values, potential downsides such as blurred boundaries and perceived nepotism must be addressed. To safeguard your business, establish clear expectations, prioritise transparent communication, and seek expert support.

Got a tricky situation with a bothersome brother-in-law or a challenging child? Give me a call and we’ll get to the bottom of it!