Is Hiring Family a Good Idea?

Family businesses are the heart and soul of America.

Many small businesses began as one person endeavors, then moved to include the entire family.

Most people have visited small stores that are family owned or restaurants with what seems like everyone from Grandma to great-grandchildren running the place. For customers this sort of environment can be down to earth and homey.

When it comes to your small business, is bringing on family to the payroll a good idea?

Providing Insurance

In certain areas you can hire family without providing insurance to them.

A lot of small business owners use family to help out, but when a relative becomes a full time employee things can become strained. Often people wish to help family members that are in need.

This can be helpful, but what about when this employee needs health care and you do not or cannot provide the coverage? This can be stressful, especially when you know their financial situation.

You may think that a relative wouldn't sue for damages if they are injured during their time working for you. This isn't always true and has caused quite a few bouts of family drama.

Keeping insurance available for any employee is a good idea, no matter how much the family member protests, “But I would never sue!”

Firing Family

It happens.

A relative is hired because they really need a job or the business owner is in need of help. Often the relationship begins well with the person showing up for work every day and doing a good job. Sometimes, (more often than some like to admit), the family member shows up late, calls in sick, or just stops coming in to work at all. When this sort of things happens it can be very hard to make the call to fire the person.

In a partnership with another owner, the relative's firing might be handed off to the non-relative. In such situations the family member may feel as if they were 'backstabbed'. As with injuries and lawsuits, firings can cause another rift in the family.

Who's the Boss?

Possibly the hardest part of hiring family members is remaining in control.

Enforcing your authority can be difficult with some relatives. Making the transition from buddy to boss or even child to boss can place a strain on family/work relationships. Imagine trying to tell your mother she needs to listen to you!

Hiring family isn't always a bad idea.

The outcomes usually rely on your family dynamics. If your family respects one another, works well together as a unit, and everyone has a good work ethic, then working with family can be a great experience.

Family-owned businesses tend to do well when everyone is on the same page because the people working are personally invested in the business.

One last consideration is that family members must be treated like other non-relatives in the workplace.

A show of favoritism can alienate other employees.

With that in mind, keep family drama out of the workplace, treat all employees equally, and be clear in your expectations before hiring a relative for the best possible outcome.