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The Good, The Bad And The Ugly Of Employing Family Members

Are you considering employing someone in your family? Before you take the plunge and do something you might regret, it is vital to assess whether it is the right decision for your business or not. Employing family members can be fantastic, but it can also turn out as a disaster. We have done the homework for you so that you can read up before jumping in with both feet.

The Good

Loyalty and Trust

One of the most fantastic things about employing family is that you know exactly what you are going to get. As you have known them for many years, you will have seen them at the best times and also at their worst times, so know how they react to pressure. Because they will have your best interests at heart, you can expect loyalty, and trust they will do the best job possible.

Good Culture

When you work with your family it can be easy to build a great workplace culture. You get on, you will be comfortable around each other, and know when to steer clear. There is no awkwardness of needing to get to know each other before you can work together efficiently.

In a family business, often the culture has been built over generations and tweaked for the current situation. The culture will be able to drive a cohesive decision making process that aligns with the business values and growth goals.

The Bad

Taking Advantage

Some family members can have a tendency of taking advantage. You may find some of the lines get blurred and the rules are only loosely observed. They may expect more leniency, more time off, higher salaries, or better job content than their colleagues. You will need to manage this carefully so that their behaviour does not affect your business.

You as an employer must not take advantage either. Employing family members still means paying them fairly, at least minimum wage. They must also have suitable working conditions, reasonable working hours, and appropriate holiday entitlements.

Also, if you have more than one team member, be very careful not to play favourites with your family members by being more lenient. This can cause resentment from the other team members, and let the family member get away with poor behaviour without reprimand.


It is easy for home and business life to collide into one when you work together. Don’t let personal conflicts affect business, and likewise, don’t let business conflicts tarnish personal relationships.

A family business is often full of intense passions as everyone wants what is best for the business. But, you might not always be able to agree on what the best thing is. You may want to consider an outside perspective to resolve conflict over the direction for the business. Whether this means a business coach, a trusted advisor, or even governance from an external board or director - use the means that suit your business.

The Ugly

Safeguard The Unexpected

No matter who you employ, things can go wrong. Whether it is a simple dispute that needs resolving or a major issue, it is important to safeguard your business.

You NEED to have a contract in place with all of your staff or contractors, and that includes family members. That means if push comes to shove, you can put aside the family aspect and fall back on the paperwork. You can follow the correct processes for resolution without the heart strings getting in the way.

Hostile Takeover

Remove the danger of hostile takeover in a family business by succession planning. Get a structure in place that works in the best interest of the business, but still satisfies the individual parties involved.

Recognise that everyone will want to have different levels of involvement. Some will want to see the business continue to tick over and will be happy to maintain the day to day running. But some will want to push the business forward, growing it and opening up its potential. Respect each person’s involvement and assign roles accordingly.

Vital Considerations When Employing Family Members

So we have gone over some of the things you can potentially expect when employing family members, or working in a family business. To help you out, this is a handy list of reference points to make the process as smooth as possible…

●       Have a formal Job Description and Contract in place so that all parties know what is expected of them

●       Keep all of the appropriate documentation you would for any other employee: contract, hours worked, pay history, leave taken, proof of their ability to work legally in New Zealand, and legislation records like PAYE

●       Set clear expectations in terms of behaviour, responsibilities, hours, salary and other potential points of conflict

●       Ensure that they have the skills and temperament required for the role, don’t give them a job they aren’t qualified for because it seems easy, or you feel sorry for them

●       Seek external advice from someone able to see the bigger picture

●       Try to separate business and personal life as much as you can, especially if you have members of your team who are not family members. This removes the perception of favouritism, or preferential treatment

●       Go into it with your eyes open and be willing to admit if things need to change, or are not working. An awkward conversation is better than jeopardising your whole business

If you need some advice on employing family members, dealing with one already in your employment, or if you need assistance with your family business, then don’t hesitate to get in touch. At In2HR, we work with a number of family businesses and therefore we are able to give you that outsider perspective that is so vital in the success of a business involving family. Get in touch with one of our friendly HR Consultants today!