Hiring Family Members: Pros and Cons

You don't get to choose your relatives, but you can choose between hiring family members for your startup or leaving them out altogether. If an opportunity arises where hiring a brother, sister, uncle, cousin, etc., seems to make good sense, don't take the decision lightly. It could be a boon for your startup or it could be one of the worst actions you take.

Here are some considerations to keep in mind when thinking about hiring a family member:

Pros

You know what you're getting. 

Depending on the person involved, you may have a pretty good idea about the strengths and weaknesses a family member brings to the startup. This can be a highly desirable alternative to hiring an unknown candidate. You may know ahead of time if this individual is reliable and hard-working, and if he or she is sufficiently motivated to assume responsibilities in your company. You may also have a pretty good idea of what it will be like to work with this person on a daily basis.

A family member may have more invested in the business.

Again, depending on the circumstances, a family member may come to the open position more strongly motivated than a disinterested newcomer. A son or daughter, for example, who's looking to move up in the business at some point, may be more willing to work odd hours or accept lower compensation, at least initially.

Less time may be needed to get a family member up to speed.

Hiring family members who are familiar with your business is another potential plus. You may not have to sacrifice as much time orienting such an individual or getting them aligned with the goals of your business.

If hiring a family member makes sense, consider doing so on an introductory basis consistent with other new hires. . As long as this is understood between both parties and consistently applied, it can be an effective way to assess at 90 days how well the relationship is working and whether continuing the employment relationship makes good business sense.

Also, don't hesitate to create a written job description that clearly delineates the family member's duties and responsibilities. This can help reduce interpersonal friction at a later point and make the entire situation more professional.

Cons

It sends the wrong signal to other employees.

Even without meaning to, you may demonstrate favoritism towards a family member by spending more time with them than with other employees or granting a promotion that others consider undeserving. These actions can negatively impact employee morale and productivity, and become a key factor in your inability to retain valued employees.

A family member may be a poor match for the job. 

If you hire your cousin because you owe him a favor, then you're asking for trouble. A relative who's a poor match for an open position can end up costing you time and money—not to mention exceedingly uncomfortable moments sitting around the table come Thanksgiving.

A newly hired relative may feel the rules don't apply to him or her. 

There's a good reason entrepreneurs are reluctant to bring family members on board. Their interpersonal dynamics outside the workplace may color how that individual behaves on the job. He or she may still look at you as "affable Uncle Bob," and feel that however they behave, you'll put up with it because they're family. This can manifest as a lack of respect for you and your company, an inclination to work hard only when they're in the mood, or as a source of contention if they don't get the personal attention they feel they deserve.

You hold back from criticism or other disciplinary action.

Issues with family members who come up short on the job should be addressed just as they would with any other employee. However, some entrepreneurs may hold back from corrective actions because they fear damaging a family relationship (or even just upsetting a relative who will later complain about your "insensitivity" with the rest of the clan later on.) Avoiding such issues can again appear as a kind of favoritism to others, as well as potentially damaging to the growth of your business.

There are plenty of examples where hiring family members can turn out wonderfully. Everyone gets along, there's a special warmth to the workplace environment, and people excel in their positions. But it's not hard to find examples where the opposite occurs, and a business suffers when a family member either fails spectacularly or creates a hostile atmosphere for other staff. The key is considering all the factors involved before making such a critically important hiring decision.