Basic HR training tells us not to hire friends and relatives. Avoiding this is considered a best practice designed to help businesses avoid a long list of grievances. Most business owners know it’s a bad idea, but we still see it happen with surprising regularity. If you’ve hired or are considering hiring a friend or family member, here are the rewards you can expect and the risks you should prepare for:



Risks:

1. Accusations of Favoritism/Nepotism
Employees tend to resent managers and business owners who hire their friends and family members because they assume those people will be given special treatment, will have more leniency from management, will be given promotions faster, and will be paid more than others who are doing the same job. This adds additional tension and scrutiny, and it usually leads to higher turnover among your employees.

2. Issues with Entitlement
When you hire friends or relatives, they often expect things from you personally that your regular employees will not. Many see themselves as “un-fireable” and are more inclined to take additional liberties like arriving late, leaving early, asking for raises that haven’t been earned, and turning in work that is poor quality or incomplete.

3. Conflict Resolution & Performance Management
Telling your best friend or your aunt that there is a problem with their job performance is a difficult conversation to have and it adds a strain on the personal side of the relationship that isn’t as complicated with a traditional employee. Similarly, conflict between your friend and a fellow employee is also notoriously challenging to navigate. Feelings always end up getting hurt and it’s very hard to resolve to the satisfaction of both parties.

4. Being Left “High & Dry”
Sometimes you may be inclined to hire the friend or relative of someone else on your staff—but proceed with equal caution here too. We’ve seen many cases where spouses or best friends were hired to work on the same team and if something happens that causes one of them to resign, the other may be more inclined to leave too. This can put the business in a difficult place—and small businesses are especially vulnerable to this.


Rewards:

1. Loyalty & Investment in Your Business
It’s an employee market right now and business owners are struggling with retention. Instilling a sense of loyalty in employees is increasingly hard in this environment when people are job-hopping at unprecedented rates. This is one area where hiring friends and family can work in your favor because they have a pre-existing sense of loyalty to you, so they tend to be more invested in the work you’re doing, both personally and professionally. They’re more likely to stick around long term if things go well.

2. No Surprises
How well can you really vet a potential employee these days? Aside from promoting from within, it’s hard to know what you’re getting when you hire. Sure, you can request personality tests and samples of prior work, but ultimately you really don’t know how someone is going to integrate with your team and your clients, and it’s hard to know if their work style and communication methods will be a fit. When you hire a friend, you usually know exactly what you’re getting, and this can be a good way to fulfill a specific need that you’ve struggled to find.

Do we recommend hiring friends and relatives? No. Ultimately the risks outweigh the rewards, but it can work in certain environments. Before you agree to hire someone you’re close with, look carefully at what you stand to gain, and what you stand to lose.

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