A Family Affair -- The Pros and Cons of Hiring Family Members As Employees

Family Business

Entrepreneurs who are planning to start their own business are often faced with the dilemma of whether or not to include family members as employees. Hiring family is a serious choice that needs to be made by small business owners.

Twenty percent of today's 6 million small businesses employ two or more people who are members of their family. The decision on whether or not to hire family depends on how well the business owner can manage the family, how dedicated the family is to the business, and how well they can all remain professionally focused.

Here are just a few pros and cons to consider when contemplating hiring family members.

  • Family members are people you know very well.
  • Family is more likely to support you and stay with you.
  • Having the family involved may increase dedication to success and profitability

  • Potential family drama can disrupt non-family employee relationships
  • Hiring an unqualified family member can result in underproduction
  • Firing a family member can present a very difficult situation

What to consider:
  • Make sure each family member has a clear understanding of their position and responsibilities
  • Outline what is expected and consequences if they fail, regardless of their family relationship
  • Consider hiring a family business advisor to keep all family members on track and help with disputes

The bottom line is that hiring family members can be the best decision you ever made, or the worst decision. The key is how well you plan and how well you navigate family dynamics to meet the needs of the company and remain focused on the business.
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