A long-standing rule in business says never hire friends or family. The fear is that personal or family relationships can too easily wreak havoc in the business environment. Although this may prove true in some instances, family and friends often make highly-motivated, hard-working employees and it is a talent pool you should not overlook.
There are simple steps you can follow to make hiring friends and family a smart and profitable decision. The advantages of hiring family and friends may include:
- Increased loyalty and commitment
- Quicker training periods
- Reduced start-up costs
- Tax benefits
Hire for a specific jobSmall business owners often hire family and friends without a specific job in mind, which can lead to confusion and problems down the road. It's best to give family and friends a detailed job description so they understand exactly what's expected of them.
Hire only if qualifiedHiring someone who isn't qualified can ruin your business and your personal relationship. Bring family and friends on board only if they possess the education, training and experience necessary to get the job done. Before hiring, ask yourself if you would employ this person if they weren't a family member or friend.
Keep compensation fairThe salaries you pay friends and family should be in line with what you're paying other employees. Offering a high-paid, cushy job to a friend or family member sets a bad example. Conversely, taking advantage of pals and relatives with a skimpy salary can lead to resentment.
Conduct performance reviewsHold family and friends accountable for their job performance. Forgiving loved ones for consistently showing up late, not meeting sales goals or going overboard on expenses sets a bad example for other employees.
- Friends and family may expect special treatment and may think they're above the rules. Try to treat all employees equally.
- Encourage family and friends to keep business and personal lives separate.
- You must be prepared to terminate a friend or family member if they don't perform their job adequately.
- Outline steps for conflict resolution with family and friends to avoid escalating disputes.