Entrepreneurs running family businesses hire their parents as consultants or employees for a variety of reasons:
- The heir to the family business works out a consulting arrangement with a parent so the child can assume the helm while the parent provides occasional counsel.
- Entrepreneurs looking for reliable assistance tap into the reasonably priced knowledge and dedication of parents who act either as consultants or as trusted employees.
- Parents are facing uncertain financial futures. Pensions, once dependable retirement income sources, have shrunk. People are living longer and are fearful of outliving their money. Healthy, energetic people resist early retirement. And parents who lose their jobs as corporations downsize their work forces may have difficulty finding new positions. Worried adult children who feel responsible for "fixing" the situation may decide to hire their parents to help stabilize the parents' finances.
Does the shift in power, kids playing boss to their parents, work?
"Rarely," contends Fredda Herz Brown, a family business consultant in Leonia, New Jersey.
"It's too easy to fall back into the role of child," agrees Michael O'Malley, a family business consultant in Chicago. "Most children don't feel they have 'permission' to confront their parents. When there is a problem with a parent employee, most children become paralyzed and don't do anything to correct the problem for fear of losing the parent's love or affection." If a parent doesn't do a good job, it's often extraordinarily difficult to criticize, reproach or even steer him or her in the right direction.
Family business advisors point out several other concerns that come with hiring a parent:
- History. "No matter what, a child will not be able to treat a parent as he or she would treat another employee," says O'Malley. "There's too much personal history. Kids don't have experience in measuring their parents' performance, and they're more likely to make excuses for them, such as 'They're doing the best they can' or 'I know it was done in my best interest.' "
- Overstepping bounds. Bringing a parent in for moral support (as someone you can trust to give you kudos in addition to answering phones), can lead to tenuous situations, O'Malley warns. "When the business grows and becomes successful," he says, "the parent often feels his or her presence has been the key factor and assumes a position of power that's not justified."
- Relationships. Parents change the climate of the business and your relationships with others. "Let's say your best salesperson gets into a tangle with your father," O'Malley hypothesizes. "As a son or daughter, how will you react to the situation? How will other people react? An emotional triangle develops."
Patricia Schiff Estess is president of Working Families Inc., a New York City consulting firm that publishes the newsletter Working Families, and author of Kids, Money & Values (Betterway Books).