Ready To Launch

4 Reasons You Should Never Hire a Family Member

4 Reasons You Should Never Hire a Family Member
Image credit: Kurt Bauschardt | Flickr
  • ---Shares
Reader Resource

Join us Dec 20. for our free webinar on attracting top talent, fueling productivity and building a brag-worthy culture. Register Now »

When you start a business and are in need of help, it's easy to run to the nearest emotionally charged people in your life to help out -- your friends and family. It's also easy, at least from an outsider's perspective, to tell you that it's a really bad idea despite the fact that it just seems so right when you're in the moment.

Although there are certainly exceptions to the rule, and yes, some people figure out how to make it work effectively, the reality is that it’s fantastically challenging to hire a family member and the result of failure can affect your life well beyond that of your business.

Related: 4 Secrets to Highly Successful Family-Owned Businesses

Let’s have a gander at a handful of typical pain points that tend to result when you make such a move -- so that if you do take the plunge, at least you'll know what to look out for.

1. Emotion is always involved.

You can’t get around this one despite how hard you try and how many heart-to-heart conversations you have. Emotion in personal relationships is just part of the deal and in the big scheme, is going to make for a messy working environment more often than not.

Think about it: How is your cousin going to feel when you, as his or her boss, is amidst having a serious talk about some failure or adjustment that needs to be made? They’re going to take it personally because you have a personal relationship, which is bad for business.

2. Expectations will vary.

It’s easy to assume that the given family member knows in advance that “they’re not going to get any handouts,” but the reality is that they’re always going to have different expectations and limits buried deep inside their brains than your other employees. Now, this doesn’t mean that you’re intentionally going to see them differently, but your family member knows, deep down inside, that they’re not your everyday employee -- and this will affect how they work inside your company and handle disputes.

Related: How to Handle Your Family Bankrolling Your Business

3. Your family members will be insiders.

So you’ve done it, you hired your cousin and they started a few months back. It’s Friday night and you’re headed to a family event for the weekend where said cousin will be in attendance, along with their parents -- your aunt and uncle -- and a slew of other family members. You arrive and within an hour you realize that the entire family knows more about the inside of your business than you could’ve imagined and it’s all the gossipy nonsense that you wish never made it outside your company headquarters.

Do you know why this happened? Because your family is fascinated with what’s going on inside your company, which you rarely talk about other than from a 30,000-foot viewpoint, and now they have the access they’ve always wanted and are attaining heaps of info from your new employee. Not sure if that sounds fun to you -- it sounds like an absolute nightmare to me.

4. There will be perceived nepotism.

You’ve brought on your cousin and everyone else at the company knows it. The difficulty comes when your cousin does well and starts getting some recognition for it. There will be people, without question, that believe the sole reason for your cousin’s success is because he or she is your family member -- unfortunately, they’ll just never get past it.

Of course, it would be ideal to build such an environment where the success of fellow employees is as transparent as possible, eliminating the possibility for nepotistic thoughts amongst others, but sometimes it’s just not that simple.

Related: Keepin' it in the Family: How to Structure a Business With Your Closest Relatives