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Hiring the Family in the Family Business
Many family businesses employ only members of the same family. Going
outside the family means hiring a stranger; staying inside the family
means hiring ‘the devil you know’.
Family members help most small businesses get established, and as the
business grows their roles expand. Family members can be helpful in
reducing the costs of putting on extra staff in busy periods, and are
much less likely to get the business involved in costly industrial
relations problems.
It’s estimated that about half of all spouses play some part in a family
business, from sharing management responsibilities to just filling in on
a part-time basis.
Why it’s Good to Employ Family Members
Family members are likely to have an emotional and personal relationship
to the business that will encourage them to do that extra bit for its
success. They’re not going to steal from themselves, and nor are they as
likely to look around for another job.
Family members know each other well enough to be aware of things they
can and cannot do. They share knowledge of what makes each other happy
and of the basic rules of behavior; they are part of the same culture.
When Ann Rhoades was in HR with Doubletree Hotels she became convinced
that family ties make for closer ties between people and the company.
"If you have several family members at a company, and they're all happy
there, then those positive feelings build on one another," she argues.
"Family members don't want to leave an organization if other family
members are there. So it becomes a retention advantage."
The dynamics of a family can make the business welcoming and friendly,
less impersonal than another type of enterprise. It can be so good that
employees who aren’t in the immediate family work harder to be accepted
into the clan.
And Why It’s Not so Good
Families have their weaknesses too. A family dispute can quickly move
from the home to the business and affect things there. A family member
can easily feel slighted if a non-member is given a pay increase or a
promotion, and it’s more difficult to get rid of a family member who’s
not doing well in their job.
"Hiring, managing and paying
family members is one of the most difficult issues that a business owner
can deal with because family relationships can inappropriately influence
business decision-making," says Mae Lon Ding, president of Anaheim-based
Personnel Systems Associates.
Non-members of the family will often feel they’re disadvantaged in
decision making, and whether it’s true or not they’ll believe they’re
less likely to have their requests granted for things like time away
from work to take care of personal matters.
Owners often forget that members of their family are subject to the same
industrial relations legislation and other conditions of work as any
other employee and can find themselves in a situation where they are
penalized for non-compliance.
The Best Way
You might think you’re helping your cousin or sister or uncle by giving
them a job in your business, but if you don’t apply the same rules when
hiring them as you would to any other employee you can find yourself
with serious problems.
First, be sure they have the right qualifications for the job. They
might have worked in the business before in a part-time position but
that doesn’t necessarily mean they’ll be suitable for a full-time role.
Have them complete the same paperwork, including an application for the
position, as any other candidate. It’s advisable to conduct the same
reference check on them as you would for someone you don’t know; just
because they’re in your family doesn’t guarantee they’ll work as hard as
you.
If their only work experience has been with your business you might
encourage them to work somewhere else for a period of time so they have
a better understanding of what it feels like to be an unrelated
employee.
Quentin Fleming of Santa Monica, author of ‘Keep the Family Baggage Out
of the Family Business’, says this is a really good idea.
"Working elsewhere provides family members with an education in how
other companies think and operate," he says. "When the kids do enter the
family business, they'll bring with them different perspectives."
Give a family member the same induction process as you would for anyone
else who just joined the business. They’ll also have to understand that
their relationship doesn’t mean any special privileges during working
hours.
Family members should have specific goals to accomplish and be given
tasks with measurable outcomes. They’ll need a clear description of
their job and details of their responsibilities.
Promote only on merit.
This is essential to keeping your business running well and growing.
Never promote someone just because they’re related to you and they’ve
worked in the business for a few years. If it’s necessary to fill a key
position and no family member is suitable, go outside to get the right
talent.
When more than one family member is an employee in the business it might
be helpful to form an outside ‘board’ or council of non-family members
to make evaluations of candidates for promotions or salary increases.
These outside advisers can also be invaluable when making selections for
new positions in the company.
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