Hiring a Family Member? Here’s What You Need to Know First.

Many entrepreneurs start their businesses with limited funds and time. It’s not always easy to find good employees when a business first launches, so owners may turn to hiring family members. A recent report reveals that over 40% of small businesses hire family members. 

When you’re looking to hire, it’s easy to make the wrong choice. There are many reasons to hire a family member to work in your business. These individuals are a known quantity. And they may have familiarity with the business that outsiders could take months or years to learn.

Some entrepreneurs hire their kids to work in the business. That practice is especially prevalent now because of the difficult job market for new college graduates. 

I’ve had plenty of experience hiring family members. Sometimes, these employment stints work out. Sometimes, they don’t. 

But it’s the failed instances that have taught me the most about keeping my business and my extended family intact. One example is when I hired a family member who showed great promise. Unfortunately, they left us at a critical time, giving very little notice and only vague reasons for their departure. Bridges were burned — not in their desire to take another job, but in how they did it.

Since then, family gatherings have been strained. Our personal relationship is cordial, but distant — nothing like it used to be. And the damage extends beyond the two of us. Family members have taken sides, and weddings, reunions and holiday gatherings are uneasy.

The lessons I’ve learned led me to develop a playbook for both the boss and the employee/family member.

Your responsibilities as the boss

To increase the chances for success, start with an honest and candid conversation before you make the offer. Tell your family member what they should expect from you and what you expect from them. Should they take offense to the suggestion that they may not work out, that’s a red flag. They’re not the right fit. Move on.

To help you with this conversation, I’ve provided rules of engagement that speak directly to them, for them. I encourage you to modify them for your specific needs and present them — both verbally and in writing.

10 rules for employees who are also relatives

Joining a family business is rarely as simple as accepting a job. You’re managing two relationships at once — professional and personal — and the line between them isn’t always clear. These ten rules will help you earn your colleagues’ respect, protect your reputation and keep the family relationship intact, no matter what happens at work.

1. Weigh the offer, not just the paycheck. A family business may be your fastest path to employment, especially in a tight job market. That’s not a reason to rush to say yes. Ask hard questions about the role, the reporting structure and how the company separates work life from family life. A job you understand going in is a job where you can succeed.
2. On the job, your family member is your boss, not a relative. Entitled behavior won’t win you any fans among team members. Some are probably talking amongst themselves, believing that you only got the job because of your family ties instead of merit. Let your work prove them wrong.
3. You cannot treat the company like you would any other company. Always work hard, and don’t take anything for granted. If anything, hold yourself to a higher standard than everyone else, because your performance reflects directly on your family’s reputation and work ethic.
4. Don’t gossip about family, the boss or the company. In any conversation, inside or outside the office, don’t say anything that you wouldn’t say directly to the person you’re talking about. Following this rule is a guaranteed way to stay out of trouble.
5. Be aware of your quest for acceptance. Every company has “water-cooler talk,” and it’s tempting to use your access to seem more informed than everyone else. Resist it. Colleagues will assume anything you say came from insider knowledge, whether it did or not — and that perception is hard to undo. Build credibility with results, not access.
6. Keep your family member informed at work. Part of your job is to help your family member succeed. They took a chance when hiring you. Show them that they made the right decision. Be receptive to their coaching. Above all, stay positive, stay visible, and stay valuable.
7. If your family member is the boss’s boss, be extra mindful to keep your immediate supervisor in the loop about relevant conversations that you have up the chain, but hold anything confidential in confidence. This protects two relationships at once: your supervisor’s trust that you’re not a threat and your family member’s trust that you’ve got their back. The moment you’re seen as a spy, both relationships are damaged beyond repair.
8. When it’s time to leave, it’s okay to chase your dream or consider a job offer that’s a better fit for you. Tell your family member (and your boss) early, privately and professionally. Help them to understand your decision by leading with what you’d like to do next in your career and why. Be respectful about their needs and flexible about how long you can stay on — especially if you’re in a role that’s difficult to hire for. 
9. Before you go, document what you know. Train your successor. Never take clients or contacts with you. And remember, whatever you created while on the job, and whatever proprietary knowledge you picked up along the way, belongs to the company — not to you, and certainly not to your next employer.
10. After you leave, reach out. Have a personal conversation with your family member separately. Say what you mean, and give the other person the space to feel whatever they feel. The business relationship is ending; the family relationship doesn’t have to.

Entrepreneurs need to keep family close

Lastly, let your new employee know that you will provide extra coaching, training and tracking because you want to help them with their career. This is essential for young family members — who may need to learn not only how to do the job, but also how to be a good employee in general.

When you stay in close touch with this family member, it shows you care. And it will preserve your relationship with the rest of the family, many of whom are watching the arrangement. These people know your strengths and weaknesses better than anyone. 

Some of your relatives will show their enthusiasm for your willingness to hire a family member. Others, the fault-finders, will be waiting for you to fail. Don’t give them the opportunity to gloat. 

Maintaining professionalism, keeping your family member on the right track and supporting them increases the chances of success for everyone. But it starts and ends with frank conversation. Don’t shy away from having it.

Many entrepreneurs start their businesses with limited funds and time. It’s not always easy to find good employees when a business first launches, so owners may turn to hiring family members. A recent report reveals that over 40% of small businesses hire family members. 

When you’re looking to hire, it’s easy to make the wrong choice. There are many reasons to hire a family member to work in your business. These individuals are a known quantity. And they may have familiarity with the business that outsiders could take months or years to learn.

Some entrepreneurs hire their kids to work in the business. That practice is especially prevalent now because of the difficult job market for new college graduates. 

I’ve had plenty of experience hiring family members. Sometimes, these employment stints work out. Sometimes, they don’t.