Many family-run businesses eventually find they need outside talent.  The challenges that come with this evolution and hiring process is often underestimated, sometimes causing friction for many involved.

In working with family businesses, both big and small, I’ve found there are four issues that come up time and time again. 

ISSUE #1:  LACK OF ALIGNMENT WITHIN THE FAMILY BEFORE HIRING OUT 

A continuing dialogue with family members involved in the business is vital. Don’t assume you are all on the same page. Sit down and discuss the values of the business and what values you seek from outside hires. There must be synchronicity between the two. 

Here are a few questions to help spark this conversation with your family

• Based on your values, what are you looking for in a new hire?  
• What possible values do not align with yours?
• What traits, value system and moral code does a new hire need to have?
• What kind of company culture would they have come from?

ISSUE #2:  SO-CALLED “FAVORITISM”

Ask yourself, does a non-family worker get the same compensation for good work and added value as a family member does? 

When a business takes on non-family employees in positions equal to family employees, outside employees may sense they are not equally compensated and that the offspring is benefiting more. They might even believe they do a better job and still get the short end of the stick. 

Out comes the Family Participation Plan! What is that? Well, this is the plan that clearly outlines terms and expectations including compensation for EVERYONE. It also underlines that advancement is based on meritocracy and not inheritance. 

This plan will help in establishing proper guidelines for non-family workers should they ever find themselves having to assume family members under their supervision. It guarantees their job when faced with difficult situations such as holding a family member accountable for his or her actions.

This plan outlines what happens if and when a family-member employee makes a mistake, how they will be corrected and sets the tone for them to learn from it. It also clearly states that they are not immune to being fired for negligence or misconduct.  If they continue to make mistakes, as outlined in the Family Participation Plan, they’ll be fired. This shows all employees there is no favoritism.  It is of the utmost importance that a business owner communicates this to key employees demonstrating commitment to professionalism. 

ISSUE #3: UNCLEAR MANDATES 

Undefined roles and responsibilities in a family business is a death sentence for everyone involved.

We all know that entrepreneurs have the greatest difficulty in establishing roles and responsibilities for team members, struggling to delegate to new employees and even to seasoned ones.

Before hiring non-family members start by formalizing the business relationship with current family members. Then, establish clear mandates for the new hires. This is beneficial in many scenarios, especially when they are asked to train or coach a next generation leader.

A non-family employee who is asked to train and develop a next generation family member might not give the proper feedback or support, fearing that if they correct the family member, they may be jeopardizing their position in the company. The next generation then doesn’t develop as much as they should under the guidance of this non-family employee.

Give everyone peace of mind. Establish a clear agreement with non-family employees guaranteeing they will not be penalized or fired for fulfilling their role and responsibilities. 

ISSUE #4: NOT BEING BUSINESS-LIKE IN BUSINESS

Personal family arguments in a business environment is a big no-no. The last thing a non-family employee wants is to be pulled into a personal argument that they neither know about or care about. 

Be sure your team understands that business is business, and family is family. Again, that’s where the Family Participation Plan comes into play. Your Family Participation Plan outlines how family conflicts are to be handled in the workplace. This plan establishes a policy for dealing with conflicts within the family and the business, including having discussions as opposed to fights, while maintaining a role-model status for other employees.

If you don’t have a Family Participation Plan in place, book a one-on-one with me and let’s get your family business in order. Sign up for a free consultation now!