Skip to content
Market Insights Workforce insights HR in family business: How to manage employees who are family members
HR in family business: How to manage employees who are family members

HR in family business: How to manage employees who are family members

For the HR professional, working with family members brings about an entire series of family conflicts and potential ethical dilemmas.

It may sound great in the beginning; you, hitting it off with your loved ones and sharing the same workplace. In any family business, hiring a family member could grant the business access to a pool of already qualified candidates who are a good fit for the organization.

However, working with family members do have their ups and downs which brings us to the question, do the pros of working with family outweigh the cons? Also for the HR professional, working with family members brings about an entire series of family conflicts and potential ethical dilemmas.

Thus, for the aspiring business owner or HR professional, here are the top four tips on how to manage employees who are also family members in a family-run business.


1. Build up strong lines of communication

Maintaining clear and concise lines of communication is a great way to improve workplace efficiency while also improving employee engagement. This is even more important when working with family.

It is important to keep in mind that in a family run business, goals and levels of engagement between employer and employee differ vastly from that of a more conventional business. In some situations, this can lead to both employer and employee having vastly different levels of expectations which can result in both personal and professional relationships being ruined.

Hence, when taking on a family member as an employee, it is crucial that expectations, objectives and goals are communicated clearly. This ensures that the said family member is given a clear understanding of what is to be expected and their goals are aligned with that of the organization's.


2. Fairness above all

Sometimes, family members may expect special privileges such as showing up late for work without any consequences or perhaps misappropriating company assets i.e. cars for personal use. Some may even expect a higher salary or receive some form of special treatment due to their "connections".

Although it may be tempting to favour family members in the name of succession or some other reason, this is a sure way of disenfranchising current employees and sets a bad precedent for anyone else in the family.

Instead, both family members and employees need to understand that no distinction is made between blood relations and employees. Not only does this encourage fair competition and improve morale, but it eliminates any prospect of being accused of nepotism or favouritism.


3. Be clear on setting boundaries

Separating one’s professional and personal life is an already challenging prospect for any normal employee and this is further complicated when working in a family business. When family relationship dynamics and other factors come into play, it is especially important that clearly defined boundaries are set when employing or working with family members.

For many business owners, it is difficult to resist the temptation to catch up on professional affairs during a family gathering or to even nag family members cum employees about work related matters in the name of efficiency. However, as a HR professional, it is crucial to remember that professional and personal boundaries between family members need to be set up in the workplace.

Thus, consider scheduling a “end of the week” meeting in which pertinent matters and work issue are followed up upon and discussed thoroughly. A representative from the HR department should be present in order to keep things moving and focused.

This meeting allows for senior leaders (or family members) to address any concerns that they may have immediately and encourages members of the organization to leave all work concerns where it belongs: at the workplace.


4. Never overlook documentation

A common mistake made by many business owners is the failing to complete proper legal documentation when working with family members.

As any HR professional can attest to; failing to take in account proper workplace documentation can lead to severe complications in the long term. Hence, it is crucial that all relevant legal documentation is taken care of when employing a family member in the workplace. This goes a long way in protecting the organization and its owners from any legal ramifications related to employment laws or taxation.

When taking on a family member as a partner, the HR department should be responsible for drafting the appropriate policies and contracts to ensure that everything is above board and that all parties are on the same page. Along with this, a partnership contract ratified by a legal professional is also crucial to reduce the chances of any disagreements and conflicts from arising.

Working in a family managed business is a tricky affair fraught with complications and challenges. However, when properly managed and motivated, family members can achieve a much greater sense of synergy when compared to more conventional businesses.


This article is either written or edited by JobsDB HK. If you would like to publish it on other website or publication, please contact us by email: [email protected]. JobsDB reserves the right to take legal action against any person that infringes the copyright.

Subscribe to Market Insights

You can unsubscribe from emails at any time. By clicking ‘subscribe’ you agree to our privacy policy