Family Matters: How to Hire Relatives
One of the most difficult things about running a family business is... the family! While there are many examples of families working together seamlessly, family relationships often cause tension at the office.
One way to alleviate these problems is by using smart employment practices when hiring family members:
Put it in writing. A written family employment policy lays the groundwork for a functional, efficient business and clearly sets expectations for family members. It should cover such topics as education expectations, work experience requirements, duties, pay scale, raises and benefits.
For example, some companies have policies that require all family employees to have a college degree or a certain amount of experience before joining the company. Some require all family members to start at an entry-level position and work their way up.
By meeting these requirements and following the rules, family members show that they are committed workers who are ready to make a difference, not charity cases who need a job.
Do performance appraisals. Assessing family members' job performance may be awkward, but it is necessary. All employees deserve a periodic review and candid input on how they're doing. This type of feedback helps identify strengths and weaknesses and can serve as a motivator for additional training.
Also, tying a salary increase to good performance reminds family members that they are rewarded for their efforts, not for their family name.
Be realistic. Depending on the nature of the business, the size of the company and the family, there may not be a job for every family member. In addition, there may be family members who just aren't a fit. Be straightforward with relatives about what the business can support.
Prepare for the worst. Is there a more unpleasant job than firing a family member? Unfortunately, sometimes it must be done. Be sure you've included guidelines for termination in the family employment policy. For example, the company may consider drug abuse, stealing and abusive behavior to be causes for immediate termination for all employees, without exception.
When firing a family member, it's crucial to remember to act as a business owner rather than a relative. Focus the discussion on employment policies and keep it professional, not personal.
Don't be afraid to have high expectations of family member employees. After all, they may represent the future of the company, and it's important that they contribute to its success.
Interested in discussing family business issues? Please contact our firm.
Consider Employment Insurance Eligibility
Here's another reason to insist that family member employees meet strict hiring qualifications. Every employee has to pay employment insurance, but if an employee is related to the employer, the government may deny the employee's eligibility.
But wait! There's a way out: If the related employee can prove that he or she could be hired elsewhere at the same level, the government may allow eligibility. In other words, good education, skills and experience will pay off in more ways than one.
Keep this in mind when hiring - and firing! - family members.