Perils of hiring family and friends

My friend’s business is in shambles. He’s at wit’s end trying to untangle the mess at his office, barely a year after entering the often treacherous arena of hiring family and friends to help grow his food business. Despite getting a few close friends and relatives with vast experience and good connections – at least that was what they impressed on him before he hired them – they had let him down terribly. 

Years ago, another friend was in an even worse predicament – he lost not only his business but also a close friend. As he wasn’t that streetwise with the twists and turns of the corporate world, he convinced a buddy to help him run the company. He struggled to build the business only to see his friend betray his trust and friendship by ousting him from the company. His friend’s Brutus act not only cost him the business he worked so hard to build but also destroyed their friendship.

There are countless horror stories on how hiring friends, relatives and even family members can go terribly wrong for businesses. Yes, it’s true employees with a personal connection to the boss “are normally more committed” to the company as they’re often considered trustworthy lieutenants because of that familiarity. Yet, if these relationships are not well managed, they can result in ruined businesses, infighting, decayed staff morale, severed friendships and frayed family ties.

Secret of success

The reality is relationships often start well with excellent mutual understanding, respect and cooperation, as well as strong feeling of camaraderie and open exchange of ideas. Yet, despite all these initial happy moments, things can somehow change as stressful days set in.

Nevertheless, it’s not always downhill for such delicate workplace relationships. That core group could still gel enough to stay together despite the personal and professional road bumps. There are bound to be occasional misunderstandings and heated moments when boss-friend or boss-family relationships threaten to break up when the parties involved don’t agree on work-related matters. If not handled properly, that can spill over and mess up friendship and even family ties.

The good news is many of such workplace relationships have worked out just right after weathering the tough storms. One fine example is my friend Lawrence who has been running a vibrant business for some 20 years and still maintains strong bonds with a few close friends and family members whom he hired to help him in various capacities. So what is his secret of success?

As with many entrepreneurial and workplace issues, there’s no easy-to-follow blueprint on how to work best with friends and family. Lawrence didn’t plunge into it blindly but started off by getting a feel of how a friendship will survive in a business environment by working with some friends on a project basis, but overall, it’s simply a learning process of trial and error.

Lawrence’s time-tested approach with his employees, regardless of whether they’re buddies or even family members, is one of open communication and mutual trust and respect. It’s not enough to go over expectations only during the hiring process. Bosses should meet with their employees regularly to minimise misunderstandings as business grows and employees’ circumstances and expectations change. Those regular open communications can dispel their misconceptions such as “I’m your friend, so you must pay me better than anyone else,” or “I’m your brother, so I think you’ll understand if I take a few days of unrecorded leave to attend to family matters”.

Frank communications

Having those frank communications can be tough but they’re vital to any business and relationship success. Be very clear on expectations as they can be very helpful for everyone, especially when rubber hits the road. In Lawrence’s case, it was hard to do as he has hired some 20 friends and family members over the last 20 years. Not all stayed on but those who did have each served at least 10 years. The golden rule to maintain strong boss-employee friendships is to keep work and personal lives separate. In Lawrence’s words, it means “There’s a line – from 7am to 7pm, they’re my staff, but after 7pm, they’re my friends and family”.

Hiring friends and family members often comes with myriad challenges. You need to handle sticky situations firmly but tactfully. How you handle each workplace situation will depend on a number of factors such as circumstances involved and your management style.

One key area you need to have a firm handle on is nepotism. Be open about nepotism, especially in a family-run business where some employees may get special treatment simply because of their blood ties. That’s okay as long as other employees know that your business has a culture where your children or cousins will receive some privileges. That’s the beauty of a family business as you get to make your own rules. That being said, setting expectations for your friends and family as well as other employees should be your top priority and you should never practise double standards on workplace values and rules such as punctuality, integrity, loyalty and diligence.

Issues of morale

Another critical area you should be acutely conscious of pertains to morale. If the top positions in your company are occupied by or traditionally reserved for close friends and family members, other employees may lose their drive to strive for more. Their morale may be affected as they may think: “What future do I have with the company if the top rungs are always occupied by the owner’s close friends and family”. Such barrier – either real or perceived – that limits employees’ upward mobility in your company could be a major push factor that encourages them to seek greener pastures.

To avoid unnecessary sticky situations arising from hiring friends and family, bosses should preferably not involve themselves in the hiring process. Let the human resources department handle it based on clearly-defined guidelines and staff requirements. Select the best possible candidate based on the education, skill sets and interests of each potential employee, and not on nepotism.

If you really need to hire family members or friends for whatever reasons – for example, your controlling wife tells you to do so because he’s your brother-in-law – be a realist. Before hiring any of them, consider the worst-case scenario. Ask yourself: “If it doesn’t work, what does that look like and how are you going to get out of it?”

What do you do once you’ve family members or friends on board? Apart from setting and managing the expectations for them, all parties involved must be clear on family roles at work. As the boss you need to decide whether you prefer to be called dad, uncle Chong or boss – and then let those family members or friends on board know. Personally, I prefer the more professional honorifics – Mr/Madam, Datuk/Datin, or just boss.

Hiring family and friends to work for you can be either a boon or bane. Before you embark on this often treacherous path, think hard on the pros and cons, and how you’re going to handle those inherent sticky issues. They can either make or break you!