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Is it nepotism, or a smart hire?

The pros and cons of working with family members

We tend to cringe when we hear the word nepotism. Images of the unqualified and undeserving come to mind, and it’s a natural segue into a discussion about how “it’s not what you know, but who you know.” But the fact is, nepotism stands as a common practice in business and life, occurring frequently in family-owned companies, non-profit organizations and small businesses. And despite its negative associations, nepotism can actually help create a stronger, more sustainable business mode. That is, if it’s done right.

Benefits – and risks

For many reasons, hiring family makes sense. You are probably more familiar with a family members’ strengths, weaknesses and potential than you are with other candidates. They offer swift trust, so you can rely on them when it comes to sensitive information and confidential aspects of your business. They likely share the same values and mission as you, with a vested interest in seeing you and your business succeed. And in the long run, who better to

take over than someone already in the inner circle?

But nepotism can lead you into dangerous territory, sending a ripple effect of resentment and frustration throughout the company. And this can have a substantial impact on employee performance, motivation and allegiance to the company.

Before hiring a family member, you must understand that people tend to believe that favoritism is at play whenever a relative is hired, regardless of their stance on nepotism. Even when a relative may be uniquely qualified for the job, coworkers often believe that it was their familial ties, not their resume, that got them the position. This can be particularly problematic when it comes to upper management and directors. Because there’s no ladder to climb when the top rung is always reserved for those with a certain name.

Bad blood can also come from a family member not living up to the expectations that you and the other employees have. Say, for example, Joe gives his nephew, Michael, a plum position in a family-run organization. Michael may have some skills, and he may even have some experience, but that’s doesn’t necessarily mean he will be able to excel in the position. Frustration may ensue — not only from other employees, but from Michael himself, who may start to feel inadequate, and, in turn, unhappy with the job. That type of morale is palpable and can spread quickly throughout the company.

And if you think that’s bad, consider another all-too-familiar situation in which a family member is handed a high-paying, high-level job, and chooses to take advantage of his position. He skips out early when he wants. Opts to work from home when his position really necessitates that he be operating in the office. And at the end of the day, does the bare minimum to get by. Not only is this a sure-fire way to aggravate other employees, but by allowing this to continue, you are setting a new precedent for company culture and values — that the job is just a paycheck, nothing more. And in the long-run, that can mean death for a business.

How to hire a family member

So where do you draw the line? Is it possible to hire family members while still doing what is best for the company? 

While you may not be able to control how other non-relative employees view nepotism, what you can do is build a process around the way you hire your family members.

It’s easy to place a family member who needs a job in a vacant position simply because you think they could do a job. But making sure they are the right fit, and hiring them with the same caution and consideration you have when screening non-relative candidates, will ensure a sustainable and productive future — a win-win for both the company and your relative.

1. Ask the right questions

Asking your relatives to be open and honest about what they are looking for is a chance to see what is important to them. Do their passions align with your company’s mission? Will the position they fill leverage their skills and interests? Have them take the DISC profile assessment to better understand what drives and ultimately fulfills them. Keep in mind that for them to devote half of their waking hours to this position and add real value to your business, it must be something that serves their needs just as much as yours. The discussion should be a two-way street, with both of you striving to figure out if this is a decision that will benefit everyone involved.

2. Gauge their personality fit

Personality is also key. While there must be a reasonable level of technical skill, it’s the soft skills — interpersonal skills, communication skills, thought processes and emotional intelligence — that can really make or break your decisions. Hiring a relative whose behavior and values just aren’t there means your are at risk of eroding your brand and destroying company morale. This is one step of the hiring process in which working with a relative works to your advantage. You know this person better than the other candidates and can make a more accurate assessment whether or not his or her personality will bring positive energy to the overall workflow — or create internal distress.

3. Examine core values

Core values are what a company stands for. So much more than just words and phrases, it is your company’s creed and culture and what every employee — including those you are related to — should embody. Before hiring a relative, be clear as to what your core values are and what will be expected of him. The smaller your organization, the more important it is that you define how these core values should be manifested for that particular position.

4. Know the law

The legal concerns surrounding nepotism are few, but that doesn’t mean you should gloss over them. While nothing explicitly prohibits you from hiring a relative, you may be crossing the line if you advertise a job opening, then proceed to offer the position to a family member who is less qualified than say, a female or minority candidate. This can conflict with Title VII or state discrimination laws, no matter what your intention was. When hiring a relative, is also illegal not to disclose any potential conflict of interest to shareholders. Failure to make that information known could violate Sarbanes-Oxley.

5. Keep your standards high

When it comes to hiring family members, the stars don’t have to align for it to be a good decision, but caution and consideration are critical. And beyond the hiring process, relatives should be encouraged to hold one another accountable, so that the standards and expectations you set are not just met, but exceeded. This promotes a more collaborative effort where family members feel supported by one another, and can ultimately become more invested in the business. And in turn, this can create a ripple effect throughout the company, as higher performance becomes the new status quo.

Header image © baranq/shutterstock

Kerry Song

Kerry Song is a writer and producer with a background in economics and finance. Her passion is to create meaningful content that engages and empowers the audience to become more mindful and more compassionate with themselves and with others.

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