If you’ve ever started a company, you’ve probably at least considered hiring family. Just about everyone has a sibling, cousin, or nephew who needs a job – and may even have the skills to make it work.
In some cases when you hire family members, the arrangement can be fantastic. Not only are you working with someone you presumably have a deep personal connection with, but you’re helping a loved one and getting an opportunity to spend more time with them.
If it goes sour, all of a sudden you’re spending Thanksgiving with your spouse’s family and explaining to every nosy second cousin what went wrong.
This is so situational – and so controversial – it’s hard to say for sure what the best option is.
Before you make a decision about whether or not to hire family members, carefully think through the situation. Here’s a detailed analysis of the pros and cons to help you decide what’s best for your business.
The advantages when you hire family members.
A family member is always more invested in your success than a random stranger, no matter how carefully vetted they are. When you’re starting a small business from scratch, you want your employees to care as much about the idea as you do.
Someone who you’ve known for your entire life is also more willing to be honest with you.
It’s hard to give a new boss criticism, but a family member shouldn’t have a problem speaking up when they feel you’re leading the ship astray.
Anytime you’re growing a business, you need those working under you to give real feedback, not just what you want to hear. A strange face might be hesitant to share a conflicting opinion, but not your big sister who grew up giving you wedgies.
One huge benefit to hiring someone close to you is that they probably need less time to settle into the business. It often takes a few months for you to feel comfortable with a new coworker, but your family member should be able to dive into the culture a lot faster.
Author and speaker Kylie Travers has hired her sisters off and on since 2009 when she first started her business. She’s never had issues with working with them.
“My sisters and I think alike so it was easier having them work for me than trying to explain everything to others,” she said.
The disadvantages when you hire family members.
The biggest downside to hiring a loved one to help you with a business is the looming question of how it will affect your relationship.
It’s easy to imagine a scenario where you all end up millionaires sipping cocktails on a beach, but it’s just as likely you’ll end up bankrupt and out of business.
The fact is, most startups fail. If you’ve asked your cousin to quit his or her day job to help you with your dream, they might be resentful if it doesn’t work out.
This is even more concerning if they’ve invested their own money in the company. Do you want to be responsible for your loved one losing their house because they sunk their finances into your startup?
Doug Nordman, blogger at The Military Guide and angel investor said he doesn’t think it makes sense to hire family members. In general, he doesn’t believe they should work together.
“Spouses or siblings are not necessarily a deal-killer, but at best it’s neutral and it’s usually a negative,” he said.
Another issue is the possibility of having to reprimand or even fire your relative.
When you disagree with an employee, the incident stays at work. When you argue with a coworker who’s also your little brother, the quarrel can follow you to the family wedding the next day, or that holiday dinner six months from now.
How to make it work.
If you’re worried about potential problems but still want to hire family members to help with your startup business, it’s imperative to talk it through beforehand. Ask about their working style, any issues they’ve had in the past, and anything they’re worried about.
You can also establish some ground rules, such as no business talk during family events and no venting to outside family members about work conflicts. If the venture goes south, you don’t want to suddenly divide the family between the two of you.
Damien Peters has worked with his brother several times, but never for long durations. Though they’re close, Peters said they think too differently to work together on a permanent or full-time basis. While Peters said that plenty of family members have issues being colleagues, not every family needs to avoid doing so.
“If it makes sense for your skills and relationship, try it out temporarily and set boundaries upfront,” he said.
Before you hire your loved ones, consider working together on a temporary basis.
Agree that if either person wants to terminate the arrangement at the end of the trial period, they can do so without backlash. That way, you can experience what it’s like to work together but not be committed right off the bat.
In the end, you have to do what’s best for your business and your family relationships. You can’t get caught up in trying to force the situation if it’s just not working. With a little experimentation, you can figure out pretty quickly if it makes sense to hire family members for your business.