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There are arguments both ways about employing family members, and many small business owners have undoubtedly experienced some powerful advantages and disadvantages of the practice. The direction it takes for your business will largely be a factor of the personalities involved, as well as your own approach to managing the business. Below you’ll find some of the pros and cons of hiring family, as well as what you can do to maximize the upside and minimize the downside.

Pros of hiring family

One of the good things about hiring family members is that you probably know them well enough to understand what their strengths and weaknesses are, so you can take advantage of the one while minimizing the other. You can also bypass any background checks or character references, since you already have this information in your head. You should be able to have greater trust in family members, and hopefully they will be willing to go all-out to help your business succeed, because they have a vested interest. Finally, there are also some specific tax advantages and social security benefits to hiring family.

Cons of hiring family

Assuming that you have other employees in your business, they may become jealous or resentful of perceived special treatment for family members, and it won’t take much before you’re accused of favoritism. When there are problems with family members in the household, that can very easily spill over into the workplace, creating twice the tension and discord that there would otherwise have been. Then too, some family members may unconsciously take advantage of the fact that they’re related, and slip into lazy habits on the job, expecting to avoid any kind of disciplinary response from you.

Making the best of it

First of all, to avoid any accusations of favoritism or lack of incentive from family employees, it would be a good idea to have a very clear definition or job description of each position that will be filled by a family member. This will provide a baseline for expected behavior, and any major deviation can be quickly nipped in the bud. It goes without saying that family members should be evaluated by the same yardstick as all other employees, so that no one has anything to complain about.

One of the worst things you can do as an employer is to hire family members for positions they are simply not qualified for. If you even think about doing something like this, you should place them in a role as a trainee under someone more qualified, and have them gradually acquire the skills and knowledge which would properly qualify them for the position. It’s also best to avoid hiring married couples entirely, because when they decide to go on vacation, or are involved with something like a pregnancy, it can temporarily eliminate two workers at once, and that can cause significant problems with coverage.

Overall – a good idea

Hiring family members can work out well for you, as long as you define their positions clearly, treat them equally with other employees, and place them in positions for which they are legitimately qualified.  If you still need help weighing the options, we’d be happy to help.

Lowcountry Business Advisors in Greater Charleston, SC strives to use our experience and passion to help business people achieve their goals.  Let’s meet for coffee and see how we can work together.