Most of what I have read over the years about employing family members has been cautionary and negative, with good reason. My experience, however, has been almost overwhelmingly positive. When you are careful about hiring family members (yours or family members of your employees) you can get some of the best, most loyal, and most trustworthy employees anywhere. I think you have a greater chance of success in hiring when hiring one of your family members or a family member of a star employee versus hiring someone off the street that no one knows. That, to me, is the real crapshoot. There are however some guidelines which I think need to be adhered to:

• Be forthright. Make sure that the family member knows that there will be no free ride and that the family member will be expected to work harder than any other nonfamily member. Also let the family member know that he or she will be promptly terminated for poor performance. (And mean it.)
• Do a background check. Even when hiring my own son I adhered totally to our hiring guidelines, including having a complete background check run. How was I to know that he didn’t get into some trouble while away at college that I didn’t find out about?
• Interview a family member just like anyone else. Again, even with my own son, I didn’t skip any steps in our interviewing process. He took the intelligence test and all of the personality profiles that anyone else has to complete. The results didn’t surprise me but they could have.
• Employment elsewhere. When hiring your own child I believe that he or she should work somewhere else after college for at least three years and be promoted at least once before working in your company. By working somewhere else they will gain experience which may very well benefit your company, and by getting promoted at least once it will boost their self-esteem and show them that they can get promoted without being a family member.
• Use an outside consultant. Before hiring my son he and I met separately and then jointly with an industrial psychologist. I didn’t want to find out the hard way that my son would have a problem working for me and I wanted his eyes opened by a trained psychologist about what it would be like reporting to me. We did one session each separately and one joint session and after the psychologist told both of us that he felt very comfortable that we could work successfully together we then did two follow up sessions 90 days apart after he started. After two sessions my son suggested that we stop doing them as he felt they weren’t needed.
• Make family members work in a variety of positions. My son has worked in our warehouses, gotten forklift certified, worked on the sales counter, and made deliveries in addition to his original position as IT manager. He now understands more about how we operate and earned the respect of his co-workers; things crucial to his future success.
• Make family members adhere to the same rules as everyone else. My son has the same benefits as everyone else and adheres to all the rules in our handbook, including vacation. He also gets an annual performance review. In all respects he is treated like every other employee.
• Have a clear delineation of responsibilities and a job description. In my case, my son is our controller and IT manager. He started off as our IT manager but when the construction industry went into a deep recession I asked him if he could also be our controller. His willingness to do this, and his competence in the position, saved us a significant amount of money. I don’t stick my nose into the accounting or the IT side of the business and he has little interest in sales, marketing, real estate, and logistics, which is my area of expertise.
• Have a compensation committee set his/her pay. My son’s pay and title is set by the compensation committee of our board. This also keeps he and I from having what could be tense conversations about pay and benefits. I also think it meant more to my son when the chairman of our compensation committee told him that, after eight years working in our company, he was being promoted to Vice-President of Finance and Administration.

In closing, I know that in many instances hiring family members doesn’t work, but if a family member is hired and managed properly I have found you can beat the odds and benefit immensely . What has your experience been?

© Copyright 2012 by Jim Sobeck. All rights reserved. This information may be reproduced as long as full credit is given to the author.