Entrepreneurial Expert Steve Strauss responds today to a concern facing many in the family business sphere, hiring family members into the business and the plusses and minuses associated with taking such action.
In the article Strauss addresses a business owner who hires his wife’s nephew who then develops a short-lived romantic relationship with a co-worker — the conclusion of which results in turmoil that extends well beyond the day-to-day business operations. Strauss uses this example to point out the various benefits and hindrances associated with employing family members, yet leaves the reader without a concrete conclusion or suggestions on how to insure success when working with family members. That’s where we come in…
If you decide to bring a family member into the business, they should be treated with the same hiring practices as non-family members — this begins by setting Entry Criteria applicable to any and all employees, be they family members or not. Examples of Entry Criteria include level of education, work experience and reporting structure.
Setting and establishing Entry Criteria guards against hiring family members for the sake of being family members, and makes sure that a business owner is getting what they need for the benefit of their overall business and not simply doing a family member a favor — one that could later cost them both in their personal and professional lives.
Once Entry Criteria for the employee has been established, it’s crucial to establish a Code of Conduct applicable to all employees within the business. Again, holding a family member to the same set of standards as a traditional employee insures just, fair and equitable treatment across the board.
In the case of Strauss’ article, interoffice dating is messy business, and something that can infect an employee/employer relationship even in the absence of familial ties. By concretely establishing rules and regulations, in writing, for all employees to access is crucial to maintain a fair and balanced working environment, which in turn translates to a necessary work/life balance — required for both family members and non-family members engaged in business together.
Finally, once Entry Criteria and a Code of Conduct have been established and communicated to all employees, it’s important to Manage Expectations and Responsibilities among family members in the same way a business owner would any trusted employee. It’s a spectacular opportunity to combine family and business, one that can create enduring success for generations — but like any business, this is dependent on hard work, fair and equitable treatment. The most important thing to remember is that you’re not doing your family member a service by holding them to different standards than other employees — doing so will only breed entitlement and lack-luster performance.
The moral of the story is this: manage the expectations of family members in the business and be open, honest and upfront as to what those expectations are. Doing so will insure success for both your business and your family.
