Should your children be employed by your company, no questions asked? Today’s blog will discuss best practices on employing family. They are not dogmatic principles, just guidelines from many years of family enterprises employing family.

Some key areas around family employment
– quantum of pay
– management positions
– degree of authority
– outside experience

Quantum of pay. Fair pay for fair work. A family member should not be underpaid, as is commonly done, just because that was the prior business practice. Plenty of salary survey resources are available to provide a benchmark for fair salaries. Same issue arises on overpaying family members.

Management positions. The position should be awarded to the most suitable candidate. It should not automatically be awarded to the family member just because he/she has the right last name.

Degree of authority. Two takeaways to ensure congruity of decision making: 1) the family member should understand his/her role and degree of decision making authority and 2) the company employees should know the degree of direction they are to accept from the family member.

Outside experience. Some family enterprises mandate a number of years of relevant experience before a family member can join the family enterprise.

Many family enterprises will formalize the family employment policies in written form and will discuss the policies in family meetings. Clear and regular communication of these employment policies can go a long way to help avoid unfulfilled expectations.

Learn, think, apply!