What’s Wrong With Nepotism?

The toughest and most important part of building a business is finding great employees. When you take the regular paths — help-wanted ads and interviews — you end up hiring a lot of disappointing people. I recently spent weeks trying to find someone to fill a part-time position. After a lot of time and money invested, we hired someone who was thrilled to work for us, came on board, and did a crackerjack job … for a week … and then quit to take another, better job.

Despite the fact that of the half-dozen people I’ve hired in the past two years, only two of them are still working for me, I’d like to think my record is better than average. Though I may not be the world’s best hirer, there is one thing I’ve done over the years that has had nearly perfect success. And that is hiring family members and friends. Although it runs contrary to the advice given in most business textbooks, this has worked wonders for me.

The idea is not so much to hire your friends and relatives, but to get your best employees to get their friends and family members to work for you too. Birds of a feather tend to flock together — and nowhere is this more true than in work habits. In the very building I’m writing this from, more than half of the employees (which total fewer than 30 people) are friends, relatives, and/or friends and relatives of them. All are reliable and productive. Some are standout performers … superstars.

When you hire a friend or relative, you know (or someone else you trust knows) the person, so you have a much better chance of knowing whether he/she will be suited for the job. Likewise, when you are recruited by a friend or relative to work for a business he/she works for, you can expect that your compatibility with the business and the job will have been thought about before you were made the offer.

Whenever I am looking for a new employee, the first thing I do is let everyone in the office know about the opening and make a specific request for help in filling it. I’ve found that I get a good deal of cooperation with a request of this sort — perhaps because employees are flattered to be consulted on such critical decisions — and that the person who makes the successful recommendation works overtime to make sure it works. There are, admittedly, dangers involved in hiring a friend or relative. A good relationship might sour.

To avoid that, I recommend the following:

a. Don’t let a friend or relative work directly for you. Have him/her report to someone else.

b. Let your friend/relative know beforehand that he will be treated as an employee during work, not as a friend. If he objects to that, don’t make the hire.

c. Keep your priorities straight. Friendship and family is more important than business. To have the advantage of a friend or relative working for you, be prepared to pay a hefty buyout price (to save the friendship) if things don’t work out. That said, I’m very much in favor of looking for good employees close to home.