A2X Consulting

Nepotism, while often frowned upon in the business world, is not generally illegal (unless it constitutes some form of discrimination that can be proven in a court of law). As a result, the practice of hiring family or friends to work at a small business is common. Just look at how many companies have names like Johnson & Johnson or Smith & Sons. Many small business owners are keen to go into business with relatives or pass their professional legacy onto their progeny. And where friends are concerned, many business owners are already acquainted with plenty of people who can fill a particular position within their organization, so why would they waste time with interviews and hiring? In truth, there are a number of pros and cons associated with this manner of hiring. Here are a few to consider.

PROS:

1. Trust. The best part about hiring family and friends within your business is that you know you are gaining employees you can trust. These are the people closest to your heart, they share your values, and you know that they are far less likely than outsiders to do anything that would hurt you or your business. Your success is their success.
2. Keeping money in the family. If you have to give your hard-earned money to someone, wouldn’t you rather it go to a family member or friend that could really use it? Many small business owners hire people they know precisely so that they can help the people they love most.
3. Hiring someone you know can do the job. There’s no denying that the hiring game can be a complete crap shoot. Even someone who looks good on paper and nails the interview with charisma and charm might turn out to be a dud on the job. If you hire someone you know well, you can ensure that you get an employee that will work hard and that can handle the job.

CONS:

1. Problems with personal relationships. You’ve probably heard the sage advice “never mix business and pleasure” and it could definitely come into play when you hire friends and family. At the very least, allowing personal feelings and patterns into the workplace could be detrimental to your business. But the truth is that the damage could extend to outside relationships, as well. Say your brother complains to your mom about how you’re treating him at the office. Then you not only have to deal with your brother at work, but with your mom at home. You see how the situation could quickly get messy.
2. Inability to fire. When you make yourself responsible for the financial success of a family member or friend it can make firing your employees extremely difficult, since you are basically putting someone you love in the poorhouse. If nothing else makes you think twice before committing nepotism, this possibility should give you pause.
3. Ignoring the best candidates. When you hire within your small circle of family and friends you are artificially limiting your pool of potential applicants, and your business could suffer for it. Is the family member of friend you hired the best possible person to fill the position? Maybe yes and maybe no, but if you hire without even seeking other applicants you’ll never know. Plus, your decision to hire someone you know could be based on emotion rather than reasoned thought, which means you could end up with a totally incompetent employee. You wouldn’t skip steps when selecting store signage or creating advertising, so don’t drop the ball when it comes to hiring the best people to make your business successful.