Hiring Relatives

Hiring relatives, also called nepotism, occurs when those with power and authority to hire members of their family. This can be a sensitive subject for many businesses and the way that this practice is viewed can vary significantly from company to company.

Nepotism can damage the reputation of a business and reduce the support of non-favored employees. It can also reduce both the creativity and quality of management functions. Some larger organizations have now implemented "anti-nepotism" policies which prohibit relatives from working in the same company or department.

This is a very different perspective however, to that of many family-owned, smaller-scale businesses that see nepotism in a more favorable light. In these types of organizations, relatives are often trained in various areas of management in order to ensure that there will be continuity of business activities when the older generations either retire or pass away.

Elements of Nepotism

With regards to nepotism, "relatives" are defined as those individuals who have a "close" relationship with an employee. This can mean either:

  • Individuals who are related by either blood or marriage within the third degree.
  • Individuals whose living situation are similar to those of a close relative.

Relatives can include, but are not limited to, the following: parents and step-parents, siblings, grandparents, spouses, partners, children, adopted children, step-children, grandchildren, aunts, uncles, cousins, nephews, and nieces.

The Good and Bad of Hiring Family Members

Hiring relatives (whether your own or those of your coworkers) can no doubt present problems; however, there are benefits also. Deciding on the right course of action can help maximize the positive impacts and minimize negatives.

Hiring relatives comes with the risk of resentment from other employees and accusations of favoritism. On the flip side, family members might feel resentment if you expect them to come in early or stay late in order to get the job done.

An additional problem of hiring relatives is that it blurs the line between work and personal life and can cause issues if family problems and tensions do not are brought into the work environment. A common argument against nepotism is that a person's ability to make decisions and aid professional growth can be stunted by their emotional ties.

Working With Family

Essentially, the best way to handle employing family members is to strive to ensure that all employees are treated equally, and there is no room for preferential treatment. There are several ways in which you can do this, as outlined below:

  • Create thorough job descriptions. A thorough description, whether for your first employee hired or after years of being in business, makes it clear what you require in a candidate. As long as you ensure that family members who are hired meet these requirements (and receive pay that is commiserate with their experience and role), others will not view the relative as receiving favors.
  • If you want to prepare relatives for jobs that they currently are not qualified for, put them into a lower position first for training, along with an appropriate title and wage.
  • Manage your relatives, and handle their performance appraisals in the same manner as you would for other staff members.

By taking active steps to prevent the negative effects of nepotism, you can help reduce negative impacts and claims of "unfair" treatment.

Hiring Relatives of Staff Members

Employing staff members' relatives can cause issues similar to hiring family members. You should be particularly careful about hiring spouses and partners, not only because of the blurring of the line between working and private life, but because it can cause you staffing problems if, for example, the employees in question plan a vacation or have a family emergency. Employing related staff members can also make matters of pay, promotion, or contract termination difficult to manage.

By knowing exactly what a job requires and outlining this in the job description, you can easily determine if a staff's friend or family member is genuinely the best person for the role.

Pros of Hiring Relatives

All things considered, there are some big positives to hiring relatives.

  • You know your family members well, so you know their strengths and weaknesses.
  • You don't need a background check and can trust them with sensitive information.
  • Family members want your business to succeed.
  • In hard times, your family members will be there for you.

The Financial Advantages of Hiring Family

In addition to the above, there are a few additional financial advantages of hiring family members. For example:

  • It is possible to receive tax reductions for your business if paying health insurance for a partner or child that you have employed.
  • Hiring a non-working spouse helps you both to increase your social security contributions.

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