To Hire Or Not To Hire: Bringing Children Into the Family Business

The Dunbars are an extremely close-knit Canadian family that runs a successful business in plastics. The family patriarch/CEO recently hired two siblings with the firm understanding that they would be treated as non-family employees. When the son made a minor customer service mistake one day, the father snapped at him.  As the son described the incident: “My name seems to be a liability here in the company. My dad and I are extremely close, but now that I work in the family business, he’s so afraid of showing favoritism that he has less patience for me than for other employees.” What’s more, the son noted that entering the family business had put pressure on his relationship with his older sister – to whom he now reports.

One of the more critical and challenging decisions you are called upon to make in a family business is whether or not to hire your children or nephews/nieces – a decision that requires you to wear three hats simultaneously: one as business owner, one as executive, another as parent.

That’s no easy trick. Clearly, the roles bleed into each other, and the situation is rife with opportunity for bitter feelings and damaged relations. Essentially, family business owners must be able to keep business matters in the business and family issues in the family. And this requires both a mastery of emotions and a situation that is well-structured.

And that’s really the difficult part. As an owner/boss, a parent must be in control of his or her own feelings and able to hold the family employee up to high standards. But as a parent, an owner must give the next generation family employee the love and nurturing he or she needs to succeed – even if this means firing the family member, should that become necessary. This clear-headed thinking and feeling means adhering to a robust process for the hiring decision, one that continues through career development and into retirement.

If done well, hiring your children can be the best decision you ever make for your business and your family. We generally recommend that young family members first get some experience outside the family business. That said, by being fully developed in the business, the next generation can continue the family legacy and provide stability for non-family employees. However, bad hiring decisions can negatively affect the company – and can also destroy family and business relationships.  So before hiring your children, you should consider a number of factors both as business owners and as parents:

A final recommendation: Try practicing these principles in live situations. Engage your child in a non-work related project to see how you partner with them. Try making decisions together in low-risk situations. Examples of such projects include organizing a local charity event, remodeling a summer home (deciding on the budget, selecting vendors, and so on), or doing odd jobs around the company. This may feel a little awkward or forced at first, but it is helpful to see how you and your family member will partner together short-term before committing to a lifetime of employment in the family business.

First Published: 30 Aug, 2013. NY Report.