Should You Hire Family and Friends for Your Small Business?

If you own a small business you will probably be tempted at some point to hire a relative or close friend – whether it’s because they are desperately in need of a job or because you really need the help of someone you know and trust. Before you bring your best friend, brother-in-law, or third cousin twice removed on board, consider these pros and cons of hiring family and friends.

Should you hire your own family – close or distant – to work with you and for you in your small business ventures? For that matter, should you hire friends to work with you and for you? What kinds of things need to be considered? Are there pros and cons? Yes, definitely!

It’s hard enough being the leader of a small business. Sometimes the casual atmosphere makes it difficult to fully delineate the leadership role and get everyone to step up to the plate when needed. When family and friends are involved, that issue can become even bigger so it’s critical that the small business owner doesn’t go into this type of hiring situation with rose colored glasses on. If you’ve watched “How I Met Your Mother” you know that the longtime dream for the guys was to all own a bar together, but they realized after one horrible night of taking over the local bar for the owner that it was never going to happen.

Considerations

It’s probably more likely that your family and friends will approach you for a job than it is that you’ll look them up to bring them on board. And the ones who will be contacting you are likely looking for any work, not just your type of work. Not that that’s a bad thing. But when there are other available workers out there, you need to resist the temptation to hire family and friends without putting at least some consideration into the decision and the process. Your business success may depend on finding the right fit, not just any fit. Some things to consider:

• the skill set needed for the position
• the work ethic needed
• the experience needed
• the pay scale vs. expectations and anticipated pressure to pay more to family and friends
• the long-term growth expectations for the business and how the friend or family member will fit in
• the potential long-term affect on the current family or friendly relationship you have with this person

There are probably 200 more things to consider, but these are critical ones you would need to think about with any hiring situation – and even more so when considering friends and family for jobs. 

RELATED: How to Avoid Hiring Bad Employees

Pros of Hiring Friends or Family

As with any situation, there are good things and bad things about working directly with your friends and family members. Consider these pros:

• you may not need to do a background check
• you have an idea of whether or not they’re lying on their resume
• you already know if you can stand to see their face on a daily basis (and maybe you can’t, but at least you know that in advance)
• you have an idea of their reliability
• their personal references are probably your references

RELATED: 9 Tips to Work with Family—And Still Like Each Other

Cons of Hiring Friends and Family

Now for the painful part…the cons. Actually, by re-reading the pros I realize that some of those could very well be cons. Sometimes the unknown is better than the known.  Here are a few cons to consider:

• too much family is usually not a good thing
• monetary discussions will ALWAYS be awkward
• firing family and friends for some small business owners is impossible…they’ll let the business go under first
• friends and family may assume ‘special privileges’ and take advantage of you
• friends and family may intentionally or unintentionally undermine your leadership with other employees by not taking you seriously
• friends and family may expect you to promote them and give them raises even when they aren’t warranted

Summary

Hiring friends and family to work for you in your business endeavors is definitely not for the faint of heart. Uncomfortable situations are exacerbated tenfold and compensation issues can be awkward. Plus, when family issues come up necessitating time off, it can present interesting issues. And what about those sick days that people sometimes tell little white lies about? All of these need to be considered. In the end, it’s up to you.

My personal take is there is too much that can get in the way of good business and good business decisions. Entire days can be lost fretting over feelings, emotions, and issues that otherwise don’t belong in the workplace. I’ve made my choice not to work with family and relatives other than paying my older children to perform some necessary tasks on an ad-hoc basis. It’s working for me, but I’m open to the fact that certain businesses and industries would be a good fit for the family and friend employee-employer relationship. I look forward to your comments.