6 Risks You Take When Hiring Family Members

6 Risks You Take When Hiring Family Members

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One of the perks associated with running your own business is being able to select the people you want to work with. It is, after all, those individuals who will be responsible for carrying out a large part of your vision. With that in mind, it’s easy to assume that family members may be the very best candidates to help you bring your vision to fruition, but is it a good idea them?

Hiring and working alongside family members isn’t unheard of, and in some small businesses, family may serve as the initial labor force prior to any personnel expansion. And, if your family has been active in helping you get your business of the ground, they likely have the most insight into your product or service, making it a natural fit. (For additional help getting your business off the ground, check our Nav’s BusinessLauncher tool). 

There are a lot of perks associated with hiring family members. For the most part, you know what you’re getting into; it’s likely you know a bit about the dependability, loyalty, and skill set of the potential hire. Additionally, family members, particularly those closest to you, have a vested interest in the success of your business, whether it be a desire to see you succeed or to benefit from the financial comfort that a successful business may yield.

But hidden among the benefits are also some risks that are unique to the delicate mix of family and business. Keeping these considerations and potential risks in mind can help you decide if hiring family is right for you, or, if you do hire a family member, how to make that relationship work.

1. Personal & Professional Worlds Collide

In any working situation, your work life and personal life are bound to mix. Leaving work problems at work can be difficult, and tension at in the workplace can easily come home with you. It’s easy to say you’ll drop your work drama at the door, but that can be increasingly challenging when you work with a family member, particularly if you live with or regularly see that family member. Over time, this can put a strain on even the healthiest family relationships.

2. Strained Relationships

Speaking of strained relationships, that’s one of the biggest risks associated with hiring family members. Things happen in the professional landscape that forever change relationships between two people. Employees may make mistakes that have long-lasting or dire consequences, or, conversely, business owners may make decisions that their employees resent or simply can’t get on board with. When those professional issues creep up between family members, the effects can be wide reaching and long lasting.

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3. Unrealistic Expectations

When family members join your team, it’s easy to assume that they will give 120% and be on the same page when it comes to expectations – after all, they want you to succeed too, right? However, both parties can easily fall victim to unrealistic expectations. For example, you may feel that shared blood means that they should be the first one in and the last one out, while they may think that every hint of success should be visible in their paycheck.

It’s true that these expectations can sour any professional relationship, but they can often be exceedingly unrealistic when they’re based on relationships that span both professional and personal worlds.

4. Disciplining Difficulties

Transgressions in the workplace happen, and whether it’s a simple mistake or a gross abuse of privilege, employees guilty of professional lapses typically face some type of disciplinary action. For many, doling out those disciplinarian actions is as unavoidable as it is unsavory, but when it comes to a family member, the issue can be compounded.

You may feel the need to give family members a bit more slack, or, perhaps you’re on the other side of the fence and feel that you need to make an example of a family member to avoid perceived favoritism. Either way, one of the most difficult parts of working with family members can be discipline or, the worst case, firing them.

5. Ditching Formalities

When you hire an employee, you likely have a process in places that ensures they’ve read, signed, and subsequently comply with work place expectations.

When it comes to family members, you may be tempted to skip the formalities and hire them on good faith to avoid paperwork (i.e., non-disclosures and non-compete) or formal training. Unfortunately, even solid relationships can go sour, making standard paperwork and procedures essential to all business relationships, even when it comes to family.

6. Discounting Qualifications

We all want to work with the most qualified individuals in our field, and the hiring process allows you to review candidate and identify the ones most qualified to fill an open position.  However, when hiring family members, it’s easy to overlook highly qualified candidates, which can create even bigger problems down the road, including the need to fire or demote that family member.

Despite the risks, you may find that hiring a family member is the best option, and if so, being aware of those risks is one way to help mitigate them. However, there are additional ways you can decrease the likelihood of family drama in the work place.  

  • Create a family employment policy:  Much like an employee handbook, a family employment policy, when consistently applied, can help allay many of the risks associated with their employment.  For example, a policy can dictate how many years or what type of experience a family member must have if they are to join your organization or who they can report to or oversee).
  • Avoid creating positions for family members: Though it may seem like a nice gesture, most experts agree that creating a position just to bring on a family member is a bad idea. Doing so can cause a variety of issues, including ones that can negatively impact everything from your bottom line to your employee morale.
  • Don’t alter requirements and rules: It’s easy to want to appease a family member or make changes that better accommodate your relationship, but doing so can quickly turn into nepotism, create an expected pattern of behavior, and lead to further issues down the road. Family members should be expected to adhere to the universal rules of the workplace, including those that regulate training, promotions, and disciplinary actions.
  • Have an honest conversation: Though the end goal may be long-term and productive employment, sometimes the best intentions aren’t enough. Before you bring a family member into the mix, take time to have an honest conversation with them and discuss your expectations, the job requirements, and perhaps even an exit strategy should things go south.

Many business owners grapple with the pros and cons of hiring a family member. For some, the personal relationship may result in a strong and productive professional relationship; for others, hiring a family member can be a risky situation that compromises both personal and professional relationships. If you’re considering hiring a family member, be sure to acknowledge the risks and have a plan in place to handle some of the problems that may arise.

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About the Author — Jennifer is a alum of the University of Denver. While in the graduate program there, she enjoyed spending time identifying ways in which non-profits and small businesses could develop into strong and profitable organizations that while promoting strong community growth. She also enjoys finding unique ways for freelancers and start-up businesses to reach and expand their goals.

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