Family employment in a family business can be rewarding and part of best practices to further the succession plan for your business. However, it also can have a darker side where sibling/cousin rivalries can emerge, entitlement issues arise and leadership issues become apparent.

Often these potential issues can be headed off with one thing, communication: clear and unambiguous. A well laid out family employment policy, best in writing, can be planned before and then communicated with family members. It can allow family to understand what the family business can provide to them and the expectations of the family business of their contribution when working.

In simple terms, a family business which follows the maxim: “Fair pay for fair work“, cannot go too far wrong.

Employing family in the business can be set out in two categories.
1. Employing family so that they can learn about the business, and
2. Employing family with a career plan in mind.

In a family business of some magnitude, employing family where they would like some experience and also learn about the business should be encouraged. However, the salary for these positions must be in line with the duties of that person. I have seen too many family businesses suffer financially when they paid family members, just because they had the family genes, unsustainable salaries for little or no work.

For longer term employment however, the process to employ family members should be more rigourous. The obligation is on you and the company to appropriately place the family member in a position in the family business that makes sense. The family employment policy, noted above, should be communicated on a continuous basis.

The challenge can be to seek and train the new leadership for the family business. Ultimately, this is your choice and may be a family member or could be a non-family member executive. This is an area where you must tread carefully in the deleicate balance to ensure that you preserve the family and the business.

Learn, think, apply!