Should Your Business Hire Family Members?

April 10th 2023

When you’re in the early stages of starting or running a business, it can be comforting to know that you have family members who support you. Some may even tell you they’re happy to help out here and there. As a startup, this may sound like music to your ears!

But before you start taking family members up on their offers of help, it is critical that you clarify exactly what the person is going to do for you, for how long, and what kind of compensation (if any) they will receive. The worst thing you can do is accept help without specifying expectations and pay. Lack of communication can lead to misunderstanding and family strife.

Although everyone likely has good intentions regarding help offered, involving family members in your business can impact relationships even if things go well. Taking steps to protect them and you from bad assumptions may help prevent drama down the line. 

Yes, It’s a Good Idea

Some of the biggest advantages of hiring family members include:

• The chance for more time together
• You already know their skills and abilities (and weaknesses)
• Your family may be more protective or invested in your business success
• Hiring them is faster and easier
• Potential tax advantages (from hiring children)

There is also the potential marketing benefit of being perceived as a “mom and pop” shop, which is often the impression customers have when family members work together. Many consumers prefer to patronize small, family businesses, so involving others in your family in working at your company could be advantageous.

The key word here is could.

It could also be disastrous.

No, It’s a Terrible Idea

If you tallied all the published articles on hiring family members, it’s likely you would see more warning about the downsides of mixing business and personal relationships than about the advantages. Despite the potential upside of spending more time with the fam, the disadvantages can have a larger, longer-lasting impact.

Some of the biggest reasons to pause before hiring family members are:

• Close personal relationships may make it hard to provide honest feedback regarding performance, or to offer constructive criticism
• Other employees may perceive that family members are treated differently (whether that’s true or not)
• Employees may be unlikely or unwilling to speak up about performance issues because of the family connection
• It’s unlikely your family member is the best person for the job
• Business-related matters may spill over into family life, or other family relationships
• Letting a family member go can cause unintended family rifts

Take Steps to Avoid Conflict

However, if you need your family’s support, there are steps you can take to try to avoid future conflicts:

• Confirm qualifications. Is your brother, cousin, or niece capable of doing what you need them to do? Make sure they can before you commit to bringing them on board, whether you’re paying them or not. Hiring someone unqualified can damage your business.
• Question availability. Ask about your family member’s availability and make sure it aligns with what you need. For example, if you need someone to work every Monday night, confirm your sister/dad/grandmother is available consistently during that time. Be clear about the commitment you need from them.
• Communicate expectations. The most important step to a successful working relationship is clearly communicating what you need and expect from your family before you hire them. Don’t assume they know how critical it is for them to make weekly deposits, or respond to emails in 24 hours, or complete deliveries by noon, for example. You need to spell it out verbally and in writing, so that everyone is clear about what they need to do. Also make it clear what will happen if they don’t, to try to avoid hard feelings.
• Communicate frequently. Family or not, it’s always a good practice to provide feedback regularly—the more the better, really. Let all employees know when they’ve done a good job. Give public recognition for a job well done. And pull employees aside quietly when they slip up, to explain what they should have done instead. Give them a chance to demonstrate a willingness to improve.
• Avoid special treatment. Treat everyone on your staff the same. Sure, she may be your mom, but when it comes to business, you need to treat her with the same respect and formality as your other employees. This will help reduce any awkwardness your other employees may feel about working alongside a close family member and convey that everyone is expected to do their part.
• Try to keep work and home separate. When you’re spending your free time with family members, don’t spend all of it rehashing business issues. Enjoy your time together. And at work, don’t bring up personal matters from home that might make non-family members uncomfortable.

Family members can be essential workers when you’re just starting out, because they want you to succeed. But as your business grows, it’s important to add policies and procedures to ensure that your employees are supporting your business’s growth and not hampering it.